Fool Portfolio Report
Thursday, February 22, 1996

By TomGardner (Tom Gardner)

SOHO, NY., Feb. 22 -- Oh my.

It ranks right up there as one of the strongest days for The Fool Portfolio since we launched our forum in early August of 1994. Our 4.98% climb exactly tripled that of the S&P 500, up 1.66% today. And that has us up 120.30% versus market average growth of 43.73% over the past eighteen months.

This past week, Barron's---in the same issue it favorably reviewed The Motley Fool Investment Guide (purchasable in any Borders or Barnes & Noble in the nation)---reported that less than 1% of all equity funds are outperforming the Dow Jones Industrial Average in 1996. The Fool Portfolio is leading the Dow by more than 70% in 1996, and Fools beat the DJIA by more than 50% in 1995.

We think those returns say more about our status as individual investors than they do about Foolishness in general but still. . . when do we few hundred thousand Fools throw on golden slippers and dance the jig down Wall Street?

Let's check in on our stocks.

America Online (NASDAQ:AMER), the same company that the Web was supposedly going to breakfast on, rose another $4 today on the bid, closing at $55 1/4---up 7.8% on the day. That totes up 659% total Foolish growth, and our once $5000 has swollen into over $37,000.

You look at where the world is going, picking your industries accordingly; you learn how to fundamentally value the greatest of US growth companies; you watch the quarterly numbers come flowing in; and you hold-on tight until the business fundamentals change for the worse or until you find a better investment opportunity. Did it take a genius to follow and value AOL's rapid subscriber growth, month over month, quarter after quarter? To hold-on for a seven-bagger in eighteen months? Genius. . . ? We don't think so.

Iomega Corporation (NASDAQ:IOMG) jumped up another $1 1/8 to $16 this day. We reiterate that we have no real concerns about the Company's financial standing and that we regret that non-digital investors have missed out on one of the truly great business developments over the past fourteen months.

The offline investor hears that Iomega is puffing up their performance, is in serious financial trouble, and is about to get steamrolled by---uhh---"today's technology." The Fool sees a Company that has been consistently and aggressively conservative in posture, that has a wide variety of financing options, and that's done a remarkable job of creating an experience with their products. We don't think consumers that paid a few hundred bucks for the world's greatest storage product out there are going to anytime soon abandon that standard. Yep. . . standard.

Iomega is now a Foolish three-bagger since last May.

It seems only fitting to follow-up with General Electric (NYSE:GE), from whence came Iomega's CEO Kim Edwards. GE grew another $1 3/4 to $79 1/2---a half point away from its highest valuation ever. The stock is now up 37.27% since August. During the first leg of our book tour, General Electric probably brought bigger smiles to Foolish faces than any other stock mentioned. And why not? Be #1 or #2 in every market you compete in; numerically evaluate performance at every level; create internal competition; make your customers and your employees your shareholders, and then aggressively serve your shareholders. Jack Welch for President.

Sears (NYSE:S), the Dow stock we were unwilling to cover two days back, shot up $2 to $45 1/4. We took in over 25% in profit from Sears in our first year, and this Dow rotation has brought us over 56% growth. The market appears to like that our retailer is actively trying to shed Prodigy in its ongoing and ferocious effort to concentrate on its core strengths. If Mr. Welch won't run for President. . . what about Arthur Martinez?

Let's talk about our other retailing stock, The Gap (NYSE:GPS), which edged up $1 3/8 to $49 3/4 today. Gap everywhere. Gap hats, Gap sweatshirts, Gap-sold jeans and khakis, kid Gappers, adults Gapping, even those supposedly disenchanted teens. . . Gapped. With the strongest cashflows in the industry, our fine filly has really smashed its competitors of late. Both Sears and GPS are up more than 50% during a six-month period that their industry has fallen on hard times.

It just doesn't seem fair that Chevron (NYSE:CHV) also pitched in today. CHV rose $1 7/8 and now stands up 18.62% for us. That still ain't beating the Dow, which is up 22% during that period. But man, we're getting close. Would that we could say something intelligent about Eastern European oil prospects. . . but we're just in this one for the dividend!

Medicis Pharmaceuticals (NASDAQ:MDRX), the most recent addition to the Foolish Float, rose $1 to $28 3/4. Applied Materials was up $2 1/8 to $42 3/8, and KLA Instruments didn't budge today, closing at $29 1/4.

And I close today again with a mention of The Motley Fool Investment Guide. It's pretty much all there, our entire investment approach laid out, step-by-step. And even though sales have been just outstanding, we're still looking at 99.99% of the nation not yet having held this Foolish tome in their hands. We have built our entire business and fashioned the entire investment book around the basic concepts of service: giving advantages to customers, laying it all out on the line, educating, informing, and amusing.

With debts closing and opening our government, with consumer debt levels---penalized at double-digit rates---still on the rise, with market underperformance gaining even greater rewards, and with the vast majority of our nation still believing they know little or nothing about the management of personal savings and long-term equities investing, you can bet that Fools are going to continue racing from one edge of America back to the other trying to get this $24 book in as many hands as possible.

99.99% of the nation doesn't have the book and hasn't yet heard of The Fool. And we're running ourselves into the ground trying to spread da word. Getting it to them is in the best interest of our business, in the best interest of our employees, of our shareholders. . . but most importantly, is in the best interest of our customers. Service.

Fool on,

Today's Moves

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

Today's Numbers

Day Month Year History FOOL +4.98% 11.26% 17.98% 120.30% S&P 500 +1.66% 3.59% 6.97% 43.73% NASDAQ +1.84% 5.41% 6.18% 55.12% Rec'd # Security In At Now Change 8/5/94 680 AmOnline 7.27 55.25 659.67% 5/17/95 1005 Iomega Cor 5.04 16.00 217.59% 8/5/94 165 Sears 28.93 45.25 56.44% 4/20/95 155 The Gap 32.55 49.75 52.84% 8/11/95 95 GenElec 57.91 79.50 37.27% 8/11/95 110 Chevron 49.00 58.13 18.62% 1/29/96 250 Medicis Ph 27.86 28.75 3.20% 8/24/95 100 AppldMatl 57.52 42.38 -26.34% 8/24/95 130 KLA Instrm 44.71 29.25 -34.58% Rec'd # Security Cost Value Change 8/5/94 680 AmOnline 4945.56 37570.00 $32624.44 8/24/95 100 AppldMatl 5752.49 4237.50 -$1514.99 5/17/95 1005 Iomega Cor 5063.13 16080.00 $11016.87 8/5/94 165 Sears 4772.65 7466.25 $2693.60 4/20/95 155 The Gap 5045.25 7711.25 $2666.00 8/11/95 95 GenElec 5501.87 7552.50 $2050.63 8/11/95 110 Chevron 5389.99 6393.75 $1003.76 1/29/96 250 Medicis Ph 6964.99 7187.50 $222.51 8/24/95 130 KLA Instrm 5812.49 3802.50 -$2009.99 CASH $12147.13 TOTAL $110148.38