Fool Portfolio Report
Tuesday, December 19, 1995
Down 5.55%. . . up 3.93%. . . what next?
The Fed lightened short-term interest rates by a quarter percentage point today, with inflationary concerns waning, and the markets took off. The Dow took back nearly 35 points of yesterday's 100 point decline, the Nasdaq jumped 2.38%, and the S&P 500 moved ahead 0.84%.
You name the stock, if it was financially strong and into technology, it rose today. Our semiconductor holdings, Applied Materials and KLA Instruments, each rose more than 10% today. No news.
America Online and Iomega, our two largest holdings, both leapt ahead more than 7.5% today. That's right. . . no news.
And then our heavies posted a fairly mediocre day as a group. Sears was up $3/4, Chevron climbed $1/4, General Electric fell $3/4, and The Gap dropped $7/8.
The Fool Portfolio now sits up 66.86% for fiscal 1995, which stacks up favorably against just about every other investment vehicle---including Fidelity Select Electronics, which had us on the ropes earlier in the year.
We often make comparisons like the one above because our entire aim is to outperform the market averages that 87% of all mutual funds with ten-year records have underperformed. That has us comparing our performance daily, weekly (in The Fool Weekly, available in Foolmart), monthly, annually and historically to the returns of the S&P 500.
That's an important reminder when over the past few market days our portfolio has gone through its own little bust-boom phase. Between December 13th and December 18th, The Fool Portfolio fell a whopping 8.2%. . . meaning we lost around $8,000 in three days. No wonder we got a few emails into Fool HQ from the tiny pack of naysayers calling for smashing market declines, an all-out assault on our holdings, perhaps even the end of Folly as we know it.
But what is 8% when you're holding a stable of great companies: America Online, General Electric, The Gap, Sears, Applied Materials, Iomega et al? It's painful over a few days. And the market can sting little Fools over periods of a week, or a month, a year, even longer. But we dare the U.S stock market not to throw us out profit margins in excess of 10% annually over the next six decades. We dare the markets!
And if only, oh if only the vast majority of the millions of individual investors in this nation KNEW that stocks have churned out 10% yearly growth for decades, and should continue to do the same in the decades ahead. They could name themselves all "Fool" and find the process of learning more about business and finance actually *enjoyable*, *enlightening*, *engaging.* If only. . .
So, when we hear: Volatility, Fool!
We respond: Where?
The market is up 33% this year, and we're up 66%. Stocks have climbed 33.5% since we came online in August, 1994, and Fools are up 85%, less commissions and spreads. Our eyes are looking down through the generations ahead, rather than out at what seems like hysteria, and we're pretty content trying to mash the market over a period of decades.
Yep, we've said this all before, but it does bear frequent repetition. With our Dow stocks having doubled the market annually over the past 25 years, with Investing for Growth edging up toward tripling it annually over the last 15 years, with the PEG, cash-flow and consumer-curiosity on our side, we'll leave all the anxiety and high-commission trading up for Wise consumption. Stay Foolish, and get ready for a wonderful holiday season.
Tom Gardner, December 19, 1995
AMER +2 1/2 AMAT +4 1/8 CHV + 1/4 GE - 3/4 GPS - 7/8 IOMG +3 1/4 KLAC +2 3/4 S + 3/4
Day Month Year History FOOL +3.93% -3.13% 66.86% 85.27% S&P 500 +0.84% 1.08% 33.24% 33.49% NASDAQ +2.38% -3.10% 36.50% 42.52% Rec'd # Security In At Now Change 8/5/94 680 AmOnline 7.27 36.13 396.71% 5/17/95 335 Iomega Corp 15.11 44.88 196.91% 8/5/94 165 Sears 28.93 39.63 36.99% 4/20/95 155 The Gap 32.55 44.13 35.56% 8/11/95 95 GenElec 57.91 72.00 24.32% 8/11/95 110 Chevron 49.00 50.75 3.57% 8/24/95 100 AppldMatl 57.52 42.88 -25.47% 8/24/95 130 KLA Instrm 44.71 30.50 -31.78% Rec'd # Security Cost Value Change 8/5/94 680 AmOnline 4945.56 24565.00 $19619.44 5/17/95 335 Iomega Corp 5063.13 15033.13 $9970.00 4/20/95 155 The Gap 5045.25 6839.38 $1794.13 8/5/94 165 Sears 4772.65 6538.13 $1765.48 8/11/95 95 GenElec 5501.87 6840.00 $1338.13 8/11/95 110 Chevron 5389.99 5582.50 $192.51 8/24/95 100 AppldMatl 5752.49 4287.50 -$1464.99 8/24/95130 KLA Instrm 5812.49 3965.00 -$1847.49 CASH $18981.96 TOTAL $92632.59