Fool Portfolio Report
Wednesday, January 17, 1996

by David Gardner

--(Alexandria, VA)-- Well, market sentiment had been so fiercely against our darling technology stocks all January long that it was with no small relief today that we watched our Fool Portfolio crest over the 80% historical return mark. Borne on the wings of a once and future AMER (up $1 3/4 today), the Fool swooped to a Wednesday gain of .33%, settling down once again in our familiar octogenarian aerie. As we preen ourselves and ruffle our greasy feathers, our bird brains are hit with the certain realization that we've flown by these lonesome digs before.

We're looking around at this point trying to figure out whether some planets are lining up or something, because we look over the Port's moves to the right and we see the first four alphabetical stocks up up up and the next four down down down. Weird, I know. But even though we only had one stock rise a point or more, and three stocks drop a point or more, we still managed to show the market-beating numbers that were so sadly absent from these pages for the better part of a week.

So I'm here to tell you that YES, my fellow Fools, this train was bound for One-Third-of-a-Percentage-Point glory today. This train.

America Online got a sweetheart BUY rating reiteration from the house of Merrill today, with Los Lyncheros stating a target price of $47. We ain't complainin'. Just a short time away from its second quarter earnings report, the stock has remained pretty strong in the face of other technology stocks getting cut in half. America Online's constant stream of business, burgeoning subscribership valued off of the expected "lifetime hours" they'll spend on AOL, and strong success in fighting off competitors would all have to be prominent reasons for AMER's outstanding sustained performance. It is our favorite stock, and we own a lot of it. . . about 22% of our portfolio (due largely to the runup from appreciation). And we still like it just as much today.

In fact, we're not alone: one of our readers reported in the America Online folder that Morgan Stanley analyst Mary Meeker picked the stock as her best bet in 1996 in this month's "Financial World."

Leading the retail sector lower, Wal-Mart previewed its fourth-quarter earnings and suggested numbers 15% below analysts' expectations. Today, this stock played the role of anti-Santa, the cackling fat man who plunges his reindeer over the edge into the dark abyss. "On Sears, on Gapper, on. . ." Aaaaaaaaaaaaaaa!

In a word, yow. Da Searssss off $2 1/4 to close below $40 for the first time in a while, Gap giving up a similarly shaped ghost and sinking $1 7/8 to $43 7/8. Chevron did help balance out some of these New York Stock Exchange losers, as our oil concern appreciated $7/8 to $53 3/4.

The day was really not terribly notable, though, frankly. As you probably know by now, Intel reported earnings below estimates at market close yesterday, and sank $5 today. Many speculators thought that would be the straw that broke the moth's back (let's face it, straws are far more likely to break moths' backs than those of camels). Instead, the market indices mostly rose today, and our semiconductors were mixed. KLA gave back a point of its recent gains, but Applied Materials (which currently owns the distinction of being the worst stock in our portfolio) managed to gain $1/2.

Suffice to say that today could be remembered for its toughness in the face of strongly negative market sentiment. In our chat room last night, I was constantly queried as to how badly the market would be killed today. Well, gee, um, the NASDAQ went up today. Just goes to show this Fool once again that trying to "time" the market (predicting short-term moves) is a big waste of time. And that's a comforting and important message to close on tonight, for those many of us whose investment returns and strategies are NOT predicated on predicting where Intel will be tomorrow, or whether the Dow will break 5100 by the end of the week. Buy. Hold. Buy more. Hold more. And so on.

Hope ALL (and I mean every one of you---EVERY ONE) of our New York City readers will be able to join us from 1 to 2 PM in the Waldenbooks at 57 Broadway for our booksigning this coming Monday. Mark it down! Be there! No excuses! Questions? Call 212-269-1139!

Fool on!

Today's Moves

AMER +1 3/4
AMAT + 1/2
CHV + 7/8
GE + 1/2
GPS -1 7/8
IOMG - 7/8
S -2 1/4

Today's Numbers

Day Month Year History FOOL +0.33% -3.42% -3.42% 80.33% S&P 500 -0.25% -1.47% -1.47% 32.39% NASDAQ +0.23% -5.13% -5.13% 38.60% Rec'd # Security In At Now Change 8/5/94 680 AmOnline 7.27 37.75 419.05% 5/17/95 335 Iomega Corp 15.11 37.88 150.60% 8/5/94 165 Sears 28.93 39.88 37.86% 4/20/95 155 The Gap 32.55 43.88 34.79% 8/11/95 95 GenElec 57.91 71.25 23.03% 8/11/95 110 Chevron 49.00 53.75 9.69% 8/24/95 130 KLA Instrm 44.71 26.75 -40.17% 8/24/95 100 AppldMatl 57.52 32.88 -42.85% Rec'd # Security Cost Value Change 8/5/94 680 AmOnline 4945.56 25670.00 $20724.44 5/17/95 335 Iomega Corp 5063.13 12688.13 $7625.00 8/5/94 165 Sears 4772.65 6579.38 $1806.73 4/20/95 155 The Gap 5045.25 6800.63 $1755.38 8/11/95 95 GenElec 5501.87 6768.75 $1266.88 8/11/95 110 Chevron 5389.99 5912.50 $522.51 8/24/95130 KLA Instrm 5812.49 3477.50 -$2334.99 8/24/95 100 AppldMatl 5752.49 3287.50 -$2464.99 CASH $18981.96 TOTAL $90166.34