Fool Portfolio Report
Wednesday, December 13, 1995
The Motley Fool Portfolio beat the market today, though all three competitors did pretty well. The S&P 500 and the NASDAQ each rose about .45%, while the FOOL rose .58%.
We had more ups than downs, as strength in our NYSE stocks offset some weakness in KLA Instruments (following good semiconductor book-to-bill numbers last night---Applied Materials was actually up today), and weakness in America Online, which dropped below $40.
But our most volatile stock recently, Iomega, caught a very nice $2 1/4 gain, which pretty much picked up and carried the Fool torch today on its own. There was no news to account for this move, but one can pretty dependably call it a bounceback move following a 10-point selloff over the past week. Two million more shares traded. For those who follow daily dollar volume (the amount of money moving through a stock: daily volume times share price), that's about $100 million in value, a level that has held pretty steadily over the past 7-10 days. One hundred million bucks is a lot of money. About a year ago, Iomega was only about $2 a share and trading less than 100,000 shares a day. . . well less than $1 million in value.
What a difference a year makes.
That's a theme I'd like to play again in reference to another subject, and one about which I'd like to digress for a bit. It was, in fact, the highlight event of my day. I had the pleasure of attending a forum in New York City today sponsored by the Kaiser Family Foundation, examining whether business and stock market profits of healthcare companies were good, bad, or neutral for healthcare consumers. The issue is an important one today, but I won't digress on the subject for now. What was most interesting to me about this event is that the panel included the top healthcare analyst at Smith Barney, the CEO of the wildly successful Oxford Health Plans (NASDAQ:OXHP), former U.S. senator Howard Metzenbaum, and. . . MF Uptrend. That's right, MF Uptrend. . . the Motley Fool's healthcare analyst!
For those who don't know Dr. Mark Weaver, I encourage you to take a look at the fantastic work he's doing in our Industry & Market Analysis section's Healthcare folder. His appearance on the panel today is mostly in recognition of that outstanding work: every day, Mark explains healthcare issues to our Fool readership, posts his own original investment analysis of healthcare companies, and answers your questions. The head of phrenology at a leading St. Louis hospital, and an investor for more than 20 years, Mark brought serious credentials to that panel as both a doctor and a financial analyst. And his matter-of-fact answers, the fruit of his intelligence and work experience, were refreshing, compelling, and on target. I think you'll see more than one of the financial media quoting him this week.
Sitting there watching him, I was reminded of how far the Motley Fool has come, and how much further we will be going in 1996 and beyond. And the work of our MF analysts should be one of the major contributors. I identified at least five advantages that our Fool analysts (and we have more than 15 others in various industries, in addition to Mark) have over the Wisdom of Wall Street crowd, which I think it's important to recognize and understand (especially for novice investors): 1) Our MF analysts are here and now, online to answer your questions and teach you about their industries. They are NOT inaccessible and locked away in 70-story office buildings.
2) Our guys have no conflict of interest, in a Wall Street world that cannot give SELL ratings without losing the potential for financing the companies they're "analyzing." This is the most serious problem about the whole status quo.
3) MFs are accountable. . . you can see exactly which stocks they like, which they don't, and you can go back and check what they said several months ago; nobody really tracks and grades the PERFORMANCE of Wall Street's legions of equity analysts---not even their own firms, in most cases.
4) MF analysts operate in real-time, which means they can get you timely reports in reaction to TODAY's events. . . Wall Street reports are often printed out and mailed only quarterly or monthly.
5) Finally, MF analysts like Dr. Weaver are often employees in the industry they're analyzing, whereas Wall Street tends to hire financial types to analyze non-financial industries.
Today's watershed event, the first time a Motley Fool analyst has been invited to participate in a publicly sponsored media discussion, went extremely well. Our Foolish gratitude goes out to the excellent people at the Kaiser Family Foundation. And you can check Uptrend's folder by tomorrow for his recapitulation of today's fascinating discussion.
On a final Fool Port note, we've gotten a fair number of questions about whether we're planning on investing some of that $19K free cash anytime soon. The answer is yes. I feel confident we'll have at least one new Fool investment in the next week. As always, no promises, but we're narrowing down our list.
---David Gardner, December 13, 1995
AMER - 1/2 AMAT + 7/8 CHV + 1/2 GE --- GPS + 1/4 IOMG +2 1/4 KLAC -1 1/4 S + 3/4
Day Month Year History FOOL +0.58% 1.53% 74.88% 94.18% S&P 500 +0.47% 2.70% 35.36% 35.62% NASDAQ +0.42% -0.25% 40.50% 46.70% Rec'd # Security In At Now Change 8/5/94 680 AmOnline 7.27 39.63 444.83% 5/17/95 335 Iomega Corp 15.11 47.63 215.11% 4/20/95 155 The Gap 32.55 46.50 42.86% 8/5/94 165 Sears 28.93 39.63 36.99% 8/11/95 95 GenElec 57.91 71.88 24.11% 8/11/95 110 Chevron 49.00 53.25 8.67% 8/24/95 100 AppldMatl 57.52 45.50 -20.90% 8/24/95 130 KLA Instrm 44.71 32.50 -27.31% Rec'd # Security Cost Value Change 8/5/94 680 AmOnline 4945.56 26945.00 $21999.44 5/17/95 335 Iomega Corp 5063.13 15954.38 $10891.25 4/20/95 155 The Gap 5045.25 7207.50 $2162.25 8/5/94 165 Sears 4772.65 6538.13 $1765.48 8/11/95 95 GenElec 5501.87 6828.13 $1326.26 8/11/95 110 Chevron 5389.99 5857.50 $467.51 8/24/95 100 AppldMatl 5752.49 4550.00 -$1202.49 8/24/95130 KLA Instrm 5812.49 4225.00 -$1587.49 CASH $18981.96 TOTAL $97087.59