Fool Portfolio Report
Friday, August 2, 1996
by David Gardner
ALEXANDRIA, VA, August 2, 1996 -- Come with me on the rollercoaster ride that is the Stock Market of Summer '96!
No, this is not an Olympic event. (Hey, anyone else not think platform diving makes for prime-time programming? Geez, show me anything but.)
Nope. This is your financial here-and-now. This is volatility. It sometimes seems like madness.
(Up we go...) WHOOOOOOOAAAAAAA!!!!!!
(Up we go some more...) WHEEEEEEE!
(Down we go...) AAAAAAAAAAAAAAA!!!!!!
(Market gooroos forecast bearishly, signaling bottom...) ACKK!
(Everybody but gooroos buys back...) WHOOOAAA!
... and so on.
Rollercoasters and theme parks are for summer, and they always will be. And our financial institutions seem to agree.
Friday, the Fool Portfolio kept on its long-term Space Mountain ride to Proxima Centauri, and the skies were filled with shooting stars, some of them Fool Portfolio holdings. Six of our eight stocks rose $1 or more, including a new all-time high for Medicis, and the Foolfolio posted a gain of 3.45%. That exceeded strong gains for the S&P 500 and NASDAQ of 1.92% and 2.38%, respectively.
Hey, you know about Proxima Centauri, right? It's the answer to a simple trivia question with which you can nail some unsuspecting spouse or acquaintance this weekend:
"Hey, do you happen to know what's the nearest star to our star?"
(You can go on to give some helpful hints like "It's only 25 trillion miles away," and, "Scientists demonstrated last year that it too throws off X-ray solar flares," you know, that sort of thing.)
So anyway, destination Proxima Centauri.
I'm in one of those comeback-trail, sound-the-bullhorn, stargazing moods, can ye tell? Maybe that's because the past two months could not have been worse. I mean, maybe they could've, but not by much. Check it out:
June Month Year FOOL -20.40% 60.73% S&P 500 0.22% 8.88% NASDAQ -4.70% 12.63% July Month Year FOOL -23.59% 22.82% S&P 500 -4.58% 3.90% NASDAQ -8.82% 2.70%
Was anyone else thinkin' we were maybe due in August? Huh? Like Kirby Puckett after going 0-for-45? Huh? Maybe it's just me.
Well, two days are gone in August and we're up 7.53%, a few percentage points ahead of the market averages and I'm already thinking past the weekend waiting for Monday. OK, I'm joking. It's not like that day or any other will make that much of a difference to our long-term averages. But at the same time, runs like these are what pile up the very big numbers that we hope to show over the long term.
The long term, eh? A concept we Americans seem to have some problems with, judging from the nature of our political debates and decisions. Or take a look at our Olympic athletes. When Dan O'Brien, the greatest decathlete in the world, failed to even make the Olympic team in 1992, a lot of people counted him out altogether. The media stuck a fork in him; the short-term conventional wisdom was that he was done. Last night, however, he won it all. Would that we could juxtapose the short-term thinking and scrutiny of the 1992 headlines right over his picture in the newspaper today, just for perspective. We'd all see how inconsequential a day, a month, or even four years can be.
The long term. Lemme see, I get junk e-mails from time to time (at a somewhat disturbingly increasing rate). The only ones that amuse me are the financially oriented ones, and I sometimes wonder if they know who they're sending to (they don't of course, it's all faceless mass-mail), and do they realize I'm going to reprint them? The one I got today seems relevant:Check out our -profitable-, useful IRC [undernet] channel dedicated to Day Traders & Short term US stock market speculators
... Channel hosts about 20 to 40 ppl daily.. We get about 4-8 good picks on any given days (GOOD plays)..
We've got many TRUE Professional players on and a few SOES bandits as well :)
...Thanks to our channel, #DayTraders members never stop making healthy daily gains..
The most realistic way for you or me to make money on the stock market is completely to eschew the idea that we will ever "never stop making healthy daily gains." Would you rather sit on the rollercoaster and enjoy the ride, or jump off and on at every point along the way, thinking it might be more fun... or profiable? (We needn't even get into whether you'd wanna ride with a "SOES bandit" or not!)
Proxima Centauri or bust. Twenty-five trillion miles. But one mile at a time, and not every one will always be in the right direction.
Do something Foolish this weekend.
--- David Gardner, August 2, 1996
Day Month Year History FOOL +3.45% 7.53% 32.06% 146.59% S&P 500 +1.92% 3.52% 7.56% 44.52% NASDAQ +2.38% 4.11% 6.92% 56.20% Rec'd # Security In At Now Change 5/17/95 2010 Iomega Cor 2.52 18.00 614.58% 8/5/94 680 AmOnline 7.27 34.63 376.08% 4/20/95 310 The Gap 16.28 32.50 99.69% 1/29/96 250 Medicis Ph 27.86 49.50 77.67% 8/5/94 165 Sears 28.93 43.13 49.09% 8/11/95 95 GenElec 57.91 86.13 48.71% 8/11/95 110 Chevron 49.00 59.25 20.92% 8/24/95 130 KLA Instrm 44.71 19.63 -56.11% Rec'd # Security Cost Value Change 5/17/95 2010 Iomega Cor 5063.13 36180.00 $31116.87 8/5/94 680 AmOnline 4945.56 23545.00 $18599.44 1/29/96 250 Medicis Ph 6964.99 12375.00 $5410.01 4/20/95 310 The Gap 5045.25 10075.00 $5029.75 8/11/95 95 GenElec 5501.87 8181.88 $2680.01 8/5/94 165 Sears 4772.65 7115.63 $2342.98 8/11/95 110 Chevron 5389.99 6517.50 $1127.51 8/24/95 130 KLA Instrm 5812.49 2551.25 -$3261.24 CASH $16754.13 TOTAL $123295.38 Transmitted: 8/2/96