Fool Portfolio Report
Friday, March 1, 1996
(FOOL GLOBAL
WIRE)
by David Gardner (MotleyFool)
ALEXANDRIA, Va, Mar. 1 -- Yuck. Ick. Not pretty.
The Fool Portfolio had another volatile day, with three of our stocks down $1 or more and three of them up $1 or more. We did that on Wednesday, too. But on Wednesday, we rose .69%; today, the Fool Portfolio was hammered, down 3.18% to start March.
February was a great month. The Portfolio put up a 7.93% gain, vs. .69% for the S&P 500 and 3.80% for the NASDAQ. We start March substantially down to both, ESPECIALLY the S&P 500, which logged a gain today. Geez.
But hey, are we going to win every month? I don't think so. Here is a look at our monthly returns over the past 12 months, to give some sort of context:
FOOL S&P 500Mar 1.74% 2.74%
Apr 7.17% 5.61%
May -1.62% 3.63%
Jun 11.75% 2.13%
Jul 15.44% 3.18%
Aug -0.93% -0.03%
Sep 5.05% 4.01%
Oct 6.01% -0.50%
Nov 6.80% 4.10%
Dec -2.37% - 0.67%
Jan 6.03% 3.26%
Feb 7.93% 0.69%
What you see there is 4 months out of 12 in which we lost to the market, a full 1/3 of the time. It happens.
The big news Friday was outside the Fool Portfolio. You can read all about it in our mainscreen listbox, where we now produce at least one special news section every day the market is open. Today's focused on Compaq, which announced that it would miss its February sales targets due to lower than expected sales of its high margin (i.e. profitable) business desktop computers and servers. Despite the company's protests to the contrary, the market took this as another signal of slowing demand in the personal computer market leading to a bad day for computer and semiconductor stocks. Compaq lost $9 1/8 to $41 1/2.
More to OUR point, Iomega dropped $1 3/4, Applied Materials lost $1 1/8, and America Online (also hurt by a Wall Street Journal article about AT&T's Internet entry hurting competitors) lost $3 3/8. That's pretty much the high-tech component of our portfolio, and those stocks floored us today.
Then, on the other hand, you have Sears leaping $2 7/8 on no news I could see, GE (another Dow Dividend Approach winner) kicking in $1 1/4, and little Medicis appreciating a buck. The Dow stocks, you expect profits. But (trumpets sound) Medicis just returned to Foolish profitability for us. Ever since we bought it January 29th, Medicis is up 2.30%, over which time the NASDAQ has appreciated 4.33%. . . we always like to furnish you the context for our performance. So this volatile small cap underperformed during its first month of Foolishness.
Medicis would appear to offer us some downside protection on technology-death days like today. . . refreshing to see SOME growth stocks jump.
Looking back over the week, we see a Fool Portfolio with mud in its eye. The dang thing dropped 6.52%, vs. a NASDAQ loss of 2.83% and the S&P 500 drop of 2.23%. AT&T's entry into the Internet access field remains the top story, and toppled us. Without trying to make the move sound insignificant, we nevertheless consider it a bad reason to drop AMER stock $10 1/8, which is exactly what happened.
We had a great year last year. We're having a great year this year, but every year will not end up great. Maybe not even this one. It's important for all of us as long-term investors (a) to know and recognize that, and (b) not to worry about it. Enjoy the good times, and stay invested through the bad (whether days, weeks, or months) because you should NEVER try to time the market. Nobody can. Nobody has ever demonstrated consistent accuracy at doing so. Market timers have enjoyed an amazing history of being out at some bad times, and a LOT of good times. . . that's why their records are horrible. But they have this weird gravitational ability to attract journalists looking for copy regarding market direction. It's fascinating, and maybe we'll figure that out one day. We've put our crack staff on the matter.
And that's the Foolish note to close on this Friday.
---David Gardner, March 1, 1996
Today's Moves
AMER -3 3/8 AMAT -1 1/8 CHV + 5/8 GE +1 1/4 GPS - 3/4 IOMG -1 3/4 KLAC - 1/4 MDRX +1 S +2 7/8
Today's Numbers
Day Month Year History FOOL -3.18% -3.18% 10.80% 106.89% S&P 500 +0.62% 0.62% 4.62% 40.57% NASDAQ -1.27% -1.27% 3.22% 50.80% Rec'd # Security In At Now Change 8/5/94 680 AmOnline 7.27 45.75 529.05% 5/17/95 1005 Iomega Cor 5.04 16.88 234.96% 8/5/94 165 Sears 28.93 48.13 66.38% 4/20/95 155 The Gap 32.55 52.75 62.06% 8/11/95 95 GenElec 57.91 76.75 32.52% 8/11/95 110 Chevron 49.00 56.00 14.29% 1/29/96 250 Medicis Ph 27.86 28.50 2.30% 8/24/95 100 AppldMatl 57.52 34.50 -40.03% 8/24/95 130 KLA Instrm 44.71 23.75 -46.88% Rec'd # Security Cost Value Change 8/5/94 680 AmOnline 4945.56 31110.00 $26164.44 8/24/95 100 AppldMatl 5752.49 3450.00 -$2302.49 5/17/95 1005 Iomega Cor 5063.13 16959.38 $11896.25 8/5/94 165 Sears 4772.65 7940.63 $3167.98 4/20/95 155 The Gap 5045.25 8176.25 $3131.00 8/11/95 95 GenElec 5501.87 7291.25 $1789.38 8/11/95 110 Chevron 5389.99 6160.00 $770.01 1/29/96 250 Medicis Ph 6964.99 7125.00 $160.01 8/24/95 130 KLA Instrm 5812.49 3087.50 -$2724.99 CASH $12147.13 TOTAL $103447.13
