Fool Portfolio Report
Monday, July 29, 1996

by David Gardner

ALEXANDRIA, VA, July 29, 1996 -- Another bad day for technology stocks made for a worse day for the Fool Portfolio. In keeping with this real fun July for us, we scored another RED 4... no, this isn't roulette (are fours red in roulette?) (fortunately, I don't know), this was a 4-percentage-point drop. Which is unfortunate. And all too common, as well, if we're talking about the last 45-60 days.

Our two largest holdings, America Online and Iomega, each surrendered $1 3/4. Back when these stocks were $70 and $55 respectively just a few months ago, $1 3/4 didn't mean much. "One and three-quarters?" you'd have heard us said, blithely, in between sips of expensive after-dinner drinks, lowering our pricey shades briefly to look you in the eye. "Hey, whatever, babe... we're way, way up, and those are volatile stocks."

With America Online and Iomega now under $30 and $20 respectively, $1 3/4 matters a bit more. It hasn't changed our basic tune about buying good companies in growing industries, but you may notice a difference in the scene at Fool HQ:

"One and three-quarters?" you hear us say, dolefully, staring hollow-eyed at the water fountain. (No shades, of course -- long ago pawned.) "Jeepers... again? Well, um, gosh... we're still showing a profit, anyway. Right, Tom? We do still have a profit, don't we?"

I'll be honest... I'm sick of watching these two stocks get fried. But you know what? That's a feeling that is always going to strike growth-stock investors from time to time... I've felt it at various points for years, and it's part of the territory. In fact, it's probably not terribly different from the feeling that skydivers get just prior to jumping out of the plane. Goes like this:

"Zounds... not again. I'm up here? Again? Why do I do this?" AAAAAAAAAAHHHHHHHHHHH! (As skydiver jumps from plane.)

But once you're in the air with your chute up and the most beautiful view you've ever felt, you realize exactly why you jumped... exactly why you buy growth stocks. And you recognize, as I have for years, that you have to hold through some pretty ugly (and unpredictable!) short-term periods prior to enjoying the fruits of your investing.

I have jumped out of a plane (an experience I would highly recommend), and I know Tom has too. And we've both watched various growth-stock investments get cut in half from time to time, so we know of what we speak. And here are two of my rules about stocks:


1. They always drop faster than they rise.

(Not good. A bummer, actually.)

2. They always rise more than they fall.

(Very good.)

Put differently, (1) it takes a lot less time to jump 3500 feet than to ascend it. But (2) the anxiety you feel at the outset generally turns to elation by the conclusion. And that's today's Foolish message, in this case about growth-stock investing and skydiving.

There was no real news on any of our stocks today, other than the grand announcement by Chevron that its Chevron Chemical subsidiary had reached a land-use agreement with the Chinese city of Zhangjiagang for a new polystyrene plant, to employ 100 workers. (FYI: that press release rocked CHV stock for a loss of $1/8 today.)

Thus, I'll close tonight by answering one of our more frequent reader requests. It goes like this: "Hey, Fools, I enjoy Fooldom but I can't go all over the friggin' place trying to find the best stuff in your area. It's too big, and too spread out -- and designed by complete idiots who have no sense of organization or navigation." (That part hurts. Anyway....)

We hear you. Thus, I make a point of letting you know some of the most useful stuff in Fooldom, from time to time. With the daily increase in our readership, and the concomitant daily increase in our offerings and services, it's quite frequent that the former never hears about the latter. And thanks to the beauty of AOL's new hyperlink ability, I can point version 3.0 Windows users right there with magical blue text (note to Mac users: you don't have much more time to wait, because AOL's new Mac version is in beta!). Thus:

Industry Updates

Right off the top, you gotta love the work done by our Industry Fools. Our Fool staffers provide weekly recaps of the big news in a dozen industry sectors, stuff like Desktop Video, Food and Restaurants, Networking, Paper, and Airlines. If you're interested in a particular company and want to put it in its industry context, or if you're just a fan of a given industry who enjoys good writing and Foolish analysis, you can access the new reports every weekend using this clickstream: Keyword FOOL >>> Stock Research button >>> Weekly Industry Reports button

Foolishly Answered Questions

See that little question-mark button in the bottom left of the Fool main screen? The Fool FAQ has answers to dozens of the most frequently asked questions in Fooldom. There you'll find Foolish answers to questions ranging from the Fool Ratio to Instinet trading, from how does the Motley Fool make its money to "Where can I get some help with Quicken?" Maintained by MF Swagman, this ever-growing resource is the first place to check before asking a Foolish (or, in some cases, foolish) question!

Foolish Stock Valuation

Wanna read about the 1001 Foolish ways to value stocks? ("It ain't just your mama's PEG ratio anymore, Ernie.") Interactively teaching you many different ways of valuing stocks, this area also features a special section dedicated to explaining how to read a balance sheet.


OK, if you're starting to see TV advertisements featuring Dallas Cowboys (I've seen a few of these during the Olympics), it must be getting near the NFL regular season. And if it's getting anywhere near the NFL regular season, it must be time for FOOLBALL! (Hit it, Seymour...)

Are you ready for some FoolBall?!

Strap on the helmet (you know, your grandad's old leather one, kicking around the closet) and lace up yer cleats, because the most Foolish football game you've ever played is back. The preseason begins this Wednesday. Hit our Games button from the main screen for some pregame preparation.

And as a final FYI, our Today's Pitch game relaunches with a new season and new prizes, this Saturday! MF Gameboy has very kindly asked me to toss out the first pitch, which I shall do with relish. Dig your spikes in this weekend.

Until then, let's stay Foolish.

--- David Gardner, July 29, 1996

(c) Copyright 1996, The Motley Fool. All rights reserved. This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool.

Transmitted: 7/29/96

Today's Numbers

Day Month Year History

FOOL -4.06% -25.86% 19.17% 122.52%

S&P 500 -0.79% -5.93% 2.43% 37.63%

NASDAQ -1.21% -10.01% 1.36% 48.07%

Rec'd # Security In At Now Change

5/17/95 2010 Iomega Cor 2.52 15.88 530.22%

8/5/94 680 AmOnline 7.27 28.13 286.71%

4/20/95 310 The Gap 16.28 28.63 75.88%

1/29/96 250 Medicis Ph 27.86 45.50 63.32%

8/5/94 165 Sears 28.93 42.00 45.20%

8/11/95 95 GenElec 57.91 80.00 38.13%

8/11/95 110 Chevron 49.00 57.63 17.60%

8/24/95 130 KLA Instrm 44.71 18.13 -59.46%

Rec'd # Security Cost Value Change

5/17/95 2010 Iomega Cor 5063.13 31908.75 $26845.62

8/5/94 680 AmOnline 4945.56 19125.00 $14179.44

1/29/96 250 Medicis Ph 6964.99 11375.00 $4410.01

4/20/95 310 The Gap 5045.25 8873.75 $3828.50

8/5/94 165 Sears 4772.65 6930.00 $2157.35

8/11/95 95 GenElec 5501.87 7600.00 $2098.13

8/11/95 110 Chevron 5389.99 6338.75 $948.76

8/24/95 130 KLA Instrm 5812.49 2356.25 -$3456.24

CASH $16754.13

TOTAL $111261.63

Transmitted: 7/29/96