Fool Portfolio Report
Tuesday, March 19, 1996
**ATTENTION ATLANTA FOOLS** The Fool Book Caravan will be wrapping up their Georgia booksigning extravaganza on Wednesday with not one, but two appearances. The first will be at E.Land from noon - 2:00 p.m., and the second stop will be Oxford Books from 6:30 -- 7:30 p.m. Grab your family and friends, pile in your official Olympic minivan, and come meet David and Tom. You'll be glad you did.
by Tom Gardner (Motley Fool)
After a bewildering 6.7% up-jump yesterday, which set The Wisdom Movement back another couple years, The Fool Portfolio gave a bit of the growth back today, falling 0.77% versus broader market declines of 0.15%.
America Online returned $5/8 of recent gains, closing at $56 1/2. The stock, which a quite prominent newsletter shorted nearly the day we launched our site, is now up 676.86% since then. Unless someone has heard differently, I don't believe the 'letter has closed out its short position in its "model" portfolio. And that means that investors who followed along blindly by shorting $10,000 worth of AOL stock back then, are now sitting on losses of $68,000---when you factor in commissions and spreads. Accountability is a terrifying thing for the Wise.
Iomega (NASDAQ:IOMG) couldn't hold its all-time highs of yesterday, falling $3/8 to $23 1/4. In the days ahead, we'll be walking step-by-step through Iomega's financing deal with Hambrecht & Quist, and H&Q's recent buy recommendation on the stock.
The latest surge in IOMG in the wake of institutional coverage confirms what so many veteran Fools know to be true: If you can find great growth companies to invest in before the institutions arrive on the scene, you can certainly improve your chances of outperforming your Dow holdings---the Dow holdings which have traditionally doubled the market's average annual return.
In his recent letter to shareholders, Warren Buffett mentioned how difficult it is for him to take positions in the smaller growth companies he love to invest in now that Berkshire is a behemoth. There, Fool, is one of your clear advantages as an individual investor. Capitalize on it en route to your first billion by solidifying your portfolio with large-cap turnarounds, then searching for rapid and profitable growth in the universe of mid- and small-cap companies. And if you can't beat Beating the Dow's 20%+ annual returns for decades running, just return to it!
Of note today, The Gap (NYSE:GPS) pushed forward another $1/2 to a bid of $57. The Gap is just another one of those consumer growth stories that we Fools love to uncover. The consumer businesses that move aggressively to establish products and services at various price points aimed at serving *everyone* in America oftentimes make for the very best investments in our lives. The Gap is about as non-exclusive as they get, meaning they open the doors on service across the planet.
He profits most who serves the best.
Applied Materials (NASDAQ:AMAT) and KLA Instruments (NASDAQ:KLAC) have caught as little consumer and Wall Street interest since we bought into these companies as we think humanly possible. Companies at the fore of the digital medium should not let themselves go unnoticed.
Even though both stocks fell today, hopefully yesterday's move up in the wake of talk that chip prices had slowed their slide will present a few opportunities for AMAT and KLAC to do a bit of preaching their message to investors. There's always hope! We'll continue to watch the quarterly reports closely as they flow in. For now, mark these down as big disappointments for us. Anyone want to take a stab at valuing them now in their respective stock folders in Fooldom?
Let me conclude tonight's report by emphasizing again that our online forum is not about short-term portfolio returns. We want to make it very clear here that Foolish Investing is about long-term high-profit growth on savings, the elimination of debt, a comprehensive education that reaches beyond the financial markets, and a damned lot of fun in the process.
We recommend running your portfolio just like the greatest businesses in our nation: debt-free, with increasingly minimal effort and maximal returns. And spread what you've learned in Fooldom wherever you can. As with the Internet, the competition isn't figuring how best to compete. . . but how best to cooperate. Contrarian yes. . . and Foolish.
AMER - 5/8 AMAT - 7/8 CHV --- GE - 3/4 GPS + 1/2 IOMG - 3/8 KLAC - 1/8 MDRX - 1/4 S + 1/4
Day Month Year History FOOL -0.77% 10.67% 26.66% 136.50% S&P 500 -0.15% 1.76% 5.81% 42.17% NASDAQ -0.17% 1.13% 5.74% 54.48% Rec'd # Security In At Now Change 8/5/94 680 AmOnline 7.27 56.50 676.86% 5/17/95 1005 Iomega Cor 5.04 23.25 361.50% 8/5/94 165 Sears 28.93 51.00 76.32% 4/20/95 155 The Gap 32.55 57.00 75.12% 8/11/95 95 GenElec 57.91 77.13 33.17% 8/11/95 110 Chevron 49.00 57.00 16.33% 1/29/96 250 Medicis Ph 27.86 26.00 -6.67% 8/24/95 100 AppldMatl 57.52 36.38 -36.77% 8/24/95 130 KLA Instrm 44.71 25.63 -42.69% Rec'd # Security Cost Value Change 8/5/94 680 AmOnline 4945.56 38420.00 $33474.44 8/24/95 100 AppldMatl 5752.49 3637.50 -$2114.99 5/17/95 1005 Iomega Cor 5063.13 23366.25 $18303.12 4/20/95 155 The Gap 5045.25 8835.00 $3789.75 8/5/94 165 Sears 4772.65 8415.00 $3642.35 8/11/95 95 GenElec 5501.87 7326.88 $1825.01 8/11/95 110 Chevron 5389.99 6270.00 $880.01 1/29/96 250 Medicis Ph 6964.99 6500.00 -$464.99 8/24/95 130 KLA Instrm 5812.49 3331.25 -$2481.24 CASH $12147.13 TOTAL $118249.01