Fool Portfolio Report
Friday, February 9, 1996

David Gardner

The following Fool stocks hit new 52-week highs today: America Online, Gap, General Electric (despite finishing off $1/8 today), Medicis Pharmaceutical, and Sears (despite finishing off $1/8, as well). Dean Witter gave a BUY rating (upgraded from NEUTRAL) to Chevron, sending that Dow stock up $1 3/4 for us. So not a bad day. And for the week, The Fool rose 7.59%! That was well above the strong showing from our competing indices, still decent rises for the NASDAQ (up 2.09%) and the S&P 500 (up 3.23%). And that's the way it was, Friday, February 9th.

OK, now throw out all this Foolishness. Forget you ever heard of The Motley Fool Online, or these drips the Gardners, or your friendly MF staff member. Pretend you've never even signed online, in fact. The online world is completely foreign to you, you don't own a computer let alone a modem, and all this Internet gab just confuses you. The "information superhighway" is the last thing you need.

But you like the markets.

You faithfully read The Wall Street Journal with breakfast every day, even though half the time you consume your breakfast (and your Journal) on the commute to work. And you will admit to having watched CNBC on occasion, just to see those drab blue-and-white ticker symbols scroll along the bottom of the screen. (You've never, on the other hand, paid attention to Dorfman. . . except of course when your stock got Dorfed.) You have an abiding faith in the U.S. stock markets because your parents taught you that stocks were where it's at, and they were right. And though you're not a snob by nature, you can't help looking down your nose at those who spend inordinate amounts of time researching and picking mutual funds, putting together "a diversified mutual-fund portfolio," when we all know that 3 out of 4 funds lose to the market.

You are a stock market investor, living in the pre-1990's world, and your life is good.

Why are we spending some time today playing make-believe? Well, because this was the position that many of us were in before two-way interactive technology and Foolishness came into being. And you know what? Even though we lacked the online advantages back then, it was still a pretty darn good world. And that was, very simply, due to the abiding presence of common stock. Stocks! You see, the BIGGEST thing that separates two investors is NOT that one's online and one's not, but that one's making her OWN decisions and is invested in stocks, while the other is in mutual funds with no idea what investing or the stock market is all about.

On this fair Friday, we're getting away from your basic Fool Port trash talk and just focusing instead on stock market investing. We write about this in our book, that electric-blue baby just out, "The Motley Fool Investment Guide." (Incidentally, it's not enough to purchase just one copy for yourself---we've made it quite clear now that you must purchase individual copies for yourself AND at least 17-19 of your best friends.)

Our guide starts off by saying that if you're new to investing, you should probably start off with an index mutual fund, one of the tiny percentage of funds that just mechanically mimics the market averages. Because more than 75% of all funds lose to the market averages, you're going to be well ahead of the game already. And with more than 8000 funds now in existence, you'll skip a LOT of wasted time reading things like Worth Magazine looking for which five new funds you should add to your "diversified mutual-fund portfolio." Blech. Keep it simple, and bypass all the mediocrity.

(The rest of our book spends its time showing you how to trounce index mutual funds, but we'll leave that to the Guide itself.)

In the past 18 months, the S&P 500 has risen 43.19%. Holders of index funds are up just about that, holders of good stocks and Foolish approaches are crushing that, and the rest of the world---the vast majority, who are all in mutual funds---is well below 43% in its performance. (Those who elected the "safe" route and stuck with T-bills and savings accounts are up about 6%-7%.) And that is the Foolish note that we're striking for the day. We are indeed living in one of those periods which reminds us all so well of the amazing advantages of stock-market investing.

On a separate final note, a lot of our readers have written us saying, "Hey, I love all this stuff, but I only have so many hours in the day and I can't spend too much time looking all over Fooldom for the latest cool thing." We understand completely. So today we're going to add a new section ("OTHER FOOLISH STUFF") to the end of our Fool Portfolio Recap letting you know of a single other neat new thing you might enjoy right now in one of our four online areas (keywords: Motley Fool, Fool Dome, Follywood, and Rogue). For readers who are not interested in this stuff, we're just putting the paragraph at the bottom of the reports, so you can conveniently skip it whenever you'd like.

Fool on!

Today's Moves

AMER + 1/2
AMAT -1 1/8
CHV +1 3/4
GE - 1/8
GPS + 5/8
IOMG - 1/8
KLAC - 1/2
MDRX + 7/8
S - 1/8

Today's Numbers

Day Month Year History FOOL +0.49% 6.82% 13.27% 111.51% S&P 500 +0.05% 3.20% 6.57% 43.19% NASDAQ +0.13% 3.28% 4.04% 51.99% Rec'd # Security In At Now Change 8/5/94 680 AmOnline 7.27 51.50 608.11% 5/17/95 1005 Iomega Cor 5.04 14.25 182.85% 4/20/95 155 The Gap 32.55 51.38 57.83% 8/5/94 165 Sears 28.93 44.63 54.28% 8/11/95 95 GenElec 57.91 79.38 37.06% 8/11/95 110 Chevron 49.00 54.75 11.73% 1/29/96 250 Medicis Ph 27.86 29.50 5.89% 8/24/95 130 KLA Instrm 44.71 31.25 -30.11% 8/24/95 100 AppldMatl 57.52 39.38 -31.55% Rec'd # Security Cost Value Change 8/5/94 680 AmOnline 4945.56 35020.00 $30074.44 8/24/95 100 AppldMatl 5752.49 3937.50 -$1814.99 5/17/95 1005 Iomega Cor 5063.13 14321.25 $9258.12 4/20/95 155 The Gap 5045.25 7963.13 $2917.88 8/5/94 165 Sears 4772.65 7363.13 $2590.48 8/11/95 95 GenElec 5501.87 7540.63 $2038.76 8/11/95 110 Chevron 5389.99 6022.50 $632.51 1/29/96 250 Medicis Ph 6964.99 7375.00 $410.01 8/24/95 130 KLA Instrm 5812.49 4062.50 -$1749.99 CASH $12147.13 TOTAL $105752.76