Fool Portfolio Report
Monday, July 15, 1996

Monday, July 15, 1996 (FOOL GLOBAL WIRE)
by David Gardner

ALEXANDRIA, VA, July 15, 1996 -- Days like today -- I'll be honest with you -- I'm sitting there rooting the market down.

"More!" I cackle like a madman. "More! Mwa-ha-ha-ha-ha-haaaaaaa!"

Long-term investors can have peculiar, almost perverse, reactions to "Sell the Farm" days like this Monday. "How low can it go?" we wonder aloud, titillated, as we watch our favorite stock or the overall market indices go to previously unthinkable lows. The S&P 500 off 2.51%? The NASDAQ off another 3.91%? The FOOL, ever volatile (and fortunately, ever market-beating), off 8.62% more? How low can they go?!

Geez... even Chevron was down.

I really mean it. It is kinda fun to root the market down, and I say that without compunctions, feeling as much pain as anyone else who was fully invested through a day like today. The reason that I can react this way, the reason that we never recommend that readers take stuff like today's action very seriously, is that we are invested for the long term. A day's fluctuations, a month's returns, a year's overall performance don't really mean that much to those of us donning motley garb. They're just tiny pieces of a much, much larger fabric. And the tapestry itself, looked at from head to foot, is beautiful.

Well, everyone's in a different situation, so let me ask you: Are you sitting with net losses or net gains right now on your investments?

You know what? I don't care! And this shouldn't matter; you see, that was a trick question. If you've followed our Foolish maxims, you know that we're only investing hard-core savings... that is, money we don't need for anything else anytime soon. And our whole Foolish focus has to do with the future, not the present or past. Yours should, too. The future is all that matters to your bottom line, and when I say future I'm talking about the next several decades, not this year, or next March. Barring complete catastrophe, your bottom line will almost be certainly way above where it is today if you're fully invested in growth stocks for the next two decades. That's what matters.

To put it differently, we're not about to sell our stocks tomorrow, just as we didn't sell them yesterday or the day before. We're not troubled by bad market periods, whether brief and dramatic (as we've seen the past few weeks) or milder and extended. It's part of investing, and always will be. The market gives, the market takes away... but generally a lot less than it gives. Yep, our overall historic returns eloquently demonstrate that, and that's despite our having lost fully half our gains in the past few months!

OK, today's tally is there for all to see, and it's appropriately ugly. The Gap takes the cake for Fool Invulnerable Stock of the Day: off a bulletproof $5/8. Whether you look at our Dow heavies (the best of which was Chevron, off $1 7/8), our dynamic growth stocks (Iomega got socked for $4+, while America Online kissed another three bucks goodbye), to our tiny small cap Medicis (off $2 3/8), you see red. There's blood in the streets, my fellow Fools, there's blood in the aisles. There's blood in them thar hills! It's red, red, red.

So, sell! Sell, I tell you! Get out of the market now, while you still have something left. Close all brokerage accounts! Go down to the 7-Eleven, stock up on a year's worth of perishables, and run for the hills! Dig a hole and bury yourself there, and bring your shotgun! Anyone who still likes or owns stocks is insane!

(You'll just make entry points cheaper for the rest of us.) (Grin.)

I don't have much else to say about the market today. Everything went down, technology most of all. It's amazing to see Iomega below $22; we look forward to earnings reported at market close Thursday. Then again, it's amazing to see the widespread selling of high-tech issues that has continued for more than a month now. The NASDAQ closes today with a gain on the year of just 0.78%. Since its high on June 6th, it's now dropped 15%; Fool stock Iomega by contrast has lost 42%, down 16 points.

Will the NASDAQ drop another 15% from here over the next month? I have no idea, and you'll never find any true Fool trying to call the market (blech!). But I'll say one thing: it's highly unlikely you'll see Iomega lose another 16 points from here. Technology highflyers have exaggerated the NASDAQ's downturn well in advance, and we're starting to see some pretty good values. (In fact, we're happy to be invested in some of them.)

Certainly, there are some scenarios that could cause our high-tech darlings to drop 20 points more from here, but most of those scenarios are rooted in stuff like nuclear destruction or alien invasion. Needless to say, I haven't heard of any recent entries into the Sol star system from hostile warp-drive-capable unidentifieds.

Moving away from the hysteria that you'll find the media generating after today's events, and that you might encounter from bears or panicked novice investors in our chat rooms, I wanted to make sure Fooldom knows of its latest, greatest new feature. It's The Motley Fool's new Earnings Central, and houses transcripts and Foolish summaries of selected company conference calls the day they take place. Outside of printed financial statements, I consider these quarterly calls to be the best darn informational resource for individual investors. The information you can obtain from a well-run conference call can far exceed most of the contents of a company's financial information packet taken in sum!

Over the past four months, the Motley Fool has successfully broken through old policies blocking individual investors from these calls (if you're familiar with the Xilinx story from last week, you know what I mean). Earnings Central is spearheaded by MF Debit, and brought to you by our news staff. It's a fantastic new addition to our online Foolish offering. (Earnings Central is available 24 hours a day in our Foolwire section, available in Fool News -- use the Index button at the bottom of any Fool screen to locate it.)

Fool on. For the long term.

--- David Gardner, July 15, 1996

Today's Numbers

Day Month Year History

FOOL -8.62% -14.94% 36.72% 155.29%

S&P 500 -2.51% -6.09% 2.25% 37.39%

NASDAQ -3.91% -10.52% 0.78% 47.23%

*Scroll down or expand screen for full portfolio accounting

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

Rec'd # Security In At Now Change

5/17/95 2010 Iomega Cor 2.52 21.88 768.41%

8/5/94 680 AmOnline 7.27 35.25 384.68%

4/20/95 310 The Gap 16.28 29.38 80.49%

1/29/96 250 Medicis Ph 27.86 41.63 49.41%

8/5/94 165 Sears 28.93 42.88 48.23%

8/11/95 95 GenElec 57.91 81.38 40.51%

8/11/95 110 Chevron 49.00 59.25 20.92%

8/24/95 130 KLA Instrm 44.71 18.75 -58.06%

Rec'd # Security Cost Value Change

5/17/95 2010 Iomega Cor 5063.13 43968.75 $38905.62

8/5/94 680 AmOnline 4945.56 23970.00 $19024.44

4/20/95 310 The Gap 5045.25 9106.25 $4061.00

1/29/96 250 Medicis Ph 6964.99 10406.25 $3441.26

8/5/94 165 Sears 4772.65 7074.38 $2301.73

8/11/95 95 GenElec 5501.87 7730.63 $2228.76

8/11/95 110 Chevron 5389.99 6517.50 $1127.51

8/24/95 130 KLA Instrm 5812.49 2437.50 -$3374.99

CASH $16434.53

TOTAL $127645.78