Fool Portfolio Report
Wednesday, September 11, 1996

by Jeff Fischer (MF BudFox)

CHICAGO, IL, September 11, 1996 -- On a bright, clear morning, the ships sailed out to sea one by one, slowly. People stood ashore, several waving, some crying. They watched. Most folks were certain the ships were destined to fall off the edge of the Earth, because the Wise still believed the world was flat in 1492. But Columbus and his entourage dared venture out, in search of better.

By noon the ships were sun-flashed images on the horizon. And then they did disappear. They moved over the horizon and out of sight.

No, this isn't the "Columbus Day Foolish Recap" several weeks early. But it is, hopefully, a Foolish column that will touch briefly on insight, foresight, the strength of thinking large and long-term, and seeing the whole picture. And even the ship-sailing symbolism may make sense to you by the end. First, though, Fool stock Medicis Pharmaceutical (MDRX) was not sold today. The stock gapped down at the open and sold lower, artificially deflating, quite possibly, on the Fool's sell report last night. The Fool will aim to sell the stock this week, but at a better price. So, anyway, slow down, relax, the day is winding down on this Wednesday evening, take a deep breath, relax some more, and enjoy. We'll discuss today in a moment...if it matters much to you after a few minutes of reading...


...We all know that great results and important accomplishments come from work that takes a lifetime. Of course, certainly, great things can come day-by-day, but those small pleasures are rarely -- if ever -- based on foundations strong enough to keep them true and keep success coming to you year-after-year, or even day-after-day. True "success" is built on strong foundations, philosophies, and simple dedication and patience. Which is what Foolish investing is all about: Strength. Clear and valid foundations. Discipline and patience. And the humor to keep the package all together when seas inevitably get rough. There will be down days, losing days (as was today), but with a solid investment philosophy and foundation underneath you, you don't fret.

The Foolish investing strategy is as elegant and strong as any Spanish Galleon that ever took to the seas. The past two years has proven that, and I believe time will continue to prove it. But what makes it work? Aside from the simple beauty of the nut-and-bolts strategies behind the portfolio, the actual Foolish Philosophy carries it very strongly, as well. You could say the philosophies behind the Fool are the wind in the port's sails. (And I'll try to cut back on the cheesy boat analogies now...). What I mean is the long-term mind-frame great investing requires, the big all-important picture, and the "always a new horizon" way of thinking. You don't fall off the earth. There are always new horizons ahead and that is what enlightened Fools plan for and think of when they invest. What awaits you all the years ahead -- and how do you want to get there? What are you hoping for five or ten years from now? Twenty years? And how will you get there?

The best definition of success is "following a proven process over time." If a process if proven, you are a "success" the moment you begin the process, no matter how many years it takes to unfold. If a process has proved successful, and you know the process, it's very difficult to fail. You take the right steps and the process unfolds over time and you get where you want to be, and often with only minimal, natural effort from yourself. You may notice the most successful people are often the ones who look most well-rested, peaceful, and are getting where they want to go with the least resistance. They have found the right process and they are letting it ride. Their horizons are far out, but they're getting to them -- and they know they are getting to them. They can relax. They have found the right process.

The Fool portfolio, in its simple elegance, has the process of successful investing down cold. It takes lumps now and then, but it performs over the long haul, and it performs superbly. Its a process we've all been able to watch in action the past two years and one month online (and the Foolish Four market-beating performance is documented over many, many years). Online, in a mere twenty-five months, the Fool portfolio has blazed a brutal trail of success, scoring gains that make the moves of the Market Averages appear truly boring (no offense to MF Boring). The Fool is up 126% since August 5, 1994, while the S&P 500 has gained 45% to this day. Since August of 1994 the Fool port has turned $50,000 into over $113,000. Now that's putting your money to work for you. And this is just the beginning. This ship has just left the port and has a long way to go. But the true beauty of these spectualar returns is, well -- come on -- we've all seen how much Tom and David sweat out this portfolio! They really don't. Not on an overly active basis.

Success is a process. If you find the right process your chances of succeding over time are so much better than if you're blindly trying to reach some nebulous goal in your head. Find the process and stick to it. Find the process, then forget the day-to-day doubts and fears. They waste energy and time. I think Tom and David Gardner found a process they believe in, and that greatly succeeds, and now, Foolishly, they share it. That's it. So learn the Foolish Four method if you haven't -- or if you're a new Fool. And then go from there, for the future. All Fools have the solid foundation in the Foolish Four, and in the long-term Foolish Philosophy. We all have the Foolish Community here to continuously learn from as often as we want -- to chat in the dozens of chats, to read the twice-daily news, to scour and contribute to the always lively message boards, and to read these nightly recaps as well. (No ship captain doesn't check the stars at night.) And we can't forget the many other great areas here in Motley Fool that all Fools work hard on, too numerous to mention here... and the new areas surely to come.

But the main point is: Do you know how to get where you want to go? Do you know the Process to get you there? In the area of investing, I say all Fools do.

Now, as for today...

The markets had more buying and rose, while Fool stocks sold off more than were bought, and dropped, losing badly to the market. A main culprit in today's overall drop for the Fool was Medicis Pharmaceutical (write that word five times fast). MDRX dropped a whole $4 today, after gapping down about $2.75 at the open. Last night David and Tom informed the Foolish Community the Fool port was selling the stock this week (read David's sell report for details). MDRX has risen an astounding 109% for the Fool since January 29th of this year, handily surviving the drubbing stocks were dealt over the summer, and making it another great Foolish pick. You missed it? The point is to learn the process. Learn how the Fools found Medicis, so maybe you can find the next such great stock. Success is about learning the process of success.

First came America, then came America Online (AMER). AMER the stock suffered a defeat today, again, dropping one dollar despite the usual daily outflow of "progressive" press releases from the company. At least two of today's releases announce more content sites, including a Snowboarding Online service which will feature global snowboarding events, tips, news, equipment reviews and more. They also announced the launching of National Education Initiative sites, to coincide with the new year of school beginning. Next week, on September 16th, the stock moves to the New York Stock Exchange and will trade under the symbol AOL. As for the drop today, there was no fundamental reason. The momentum is to the downside. That won't last forever. It's been going on quite a while already.

Giant AT&T (T) gained $1 3/8 today, to $55. They announced, among other things, that they are entering the mobile workforce communications market with a private network service which will allow workers to communicate and use their company's data networks from remote locations. And no, I didn't copy that verbatim from the news wire -- I changed a few words.

Iomega (IOMG) gave back $7/8 today, after yesterday's big jump. As everyone knows, the media got hold of that stock early this year, the shorts were all over it, (and many shorts were impaled by the sharp rise this spring), and then the stock deflated. Emotions ran high and energy has been wasted watching the stock move all over the place, when it is the story beneath the stock that matters in the long run. Either way, the stock has outperformed, on a strength basis, 94% of all stocks on the markets in the last 12 months. Fools, like me, will have plenty to say about this on-going story in the coming months....

Chevron (CHV) climbed $1 1/8 as the antics of Saddam Hussein caused concern of further troubles in the region, and caused crude oil prices to rise. KLA Instruments (KLAC) climbed 75 cents, and the other Fool stocks moved moderately.

Well, if days are islands on a calendar, we've drifted past this one, and will continue to drift past islands -- an island a day, of course -- but it's the horizon that matters. And the horizon is always moving out. Get your boarding passes for the ship, ya Fool! This ship moves of its own weight, over time....month by month...or even year by opposed to day by day....



Transmitted: 9/11/96

Today's Numbers

Day Month Year History FOOL -3.06% -4.25% 21.11% 126.14% S&P 500 +0.52% 2.35% 8.34% 45.57% NASDAQ +0.40% 1.09% 9.68% 60.23% Rec'd # Security In At Now Change 5/17/95 2010 Iomega Cor 2.52 14.50 475.63% 8/5/94 680 AmOnline 7.27 25.88 255.77% 1/29/96 375 Medicis Ph 18.57 39.00 109.98% 8/11/95 125 Chevron 50.28 61.50 22.30% 8/13/96 250 3Com Corp. 46.86 48.75 4.03% 8/12/96 110 Minn M&M 65.68 68.13 3.73% 8/12/96 130 AT&T 54.96 55.00 0.07% 8/12/96 280 Gen'l Moto 51.97 47.75 -8.13% 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 29145.00 $24081.87 8/5/94 680 AmOnline 4945.56 17595.00 $12649.44 1/29/96 375 Medicis Ph 6964.99 14625.00 $7660.01 8/11/95 125 Chevron 6285.61 7687.50 $1401.89 8/13/96 250 3Com Corp. 11714.99 12187.50 $472.51 8/12/96 110 Minn M&M 7224.44 7493.75 $269.31 8/12/96 130 AT&T 7144.99 7150.00 $5.01 8/11/95 280 Gen'l Moto 14552.49 13370.00 -$1182.49 8/24/95 130 KLA Instrm 5812.49 2437.50 -$3374.99 CASH $1379.61 TOTAL $113070.86 Transmitted: 9/11/96