Fool Portfolio Report - Wednesday, October 09, 1996

Fool Portfolio Report
Wednesday, October 9, 1996


By David Gardner (MotleyFool)

ALEXANDRIA, VA, October 9, 1996 -- One of the nice things about writing for The Motley Fool is that we're not an organization that believes in creating news. On a dull day for news internationally, what can you typically expect from television? You know the answer as well as I do: TV stations will inevitably broadcast teasing looks at the latest grisly local murders, or some such, or maybe it's time to scare up the latest latest latest on OJ (yes, sad but true, even two years later). For most of the people watching, these images ultimately have little meaning or import, of course. But hey, it's a story, and that's what the people tuning in want, TV producers believe. So give it to 'em.

Likewise, newspapers have pretty much the same number of pages every day, even when there's sometimes only half the news. It's about advertising, my friends.

To my way of thinking, we're able to strike a pleasing contrast, made possible by the flexibility of this amazing medium. Because on a dull day when nothing really happens, that's just what you're going to hear from us. We're not here to waste your time. Today was a very dull day.

Oh sure, Lucent Technologies landed a $5.2 million contract to supply its signaling transfer point products to the Chinese province of Hubei. But who really knows what signaling transfer point products are? Count me out of the illuminati. So yeah, I could look it up and write three deadly dull paragraphs on the subject, but in the end the info would be irrelevant to most of us. Foolish Four investors that we are, when we're handed shares of a spinoff, we tend not to follow them so carefully.

The whole point of the Dow Dividend Approach is that it's eminently mechanical and terribly thoughtless... just the way I like it. And what's a $5.2 million contract for a company with $21 billion in sales, anyway?

(Maybe something: Lucent bounced back $1 3/4 today, to $47 3/8 at the close.)

Anyway, the Fool Portfolio depreciated half a percent today, largely due to drops in Iomega and the until-just-recently-unstoppable Chevron.

Ah, but KLA Instruments continued to roar back. Boosted by a decent book-to-bill ratio (announced last night, at 0.99 -- if you're an active investor, this may be the tenth or twelfth time you've heard the latest figure quoted), and a press release announcing a sales alliance with a division of DuPont, KLAC gained $1 3/4 to close at $23 3/8.

After reading a post in our KLAC folder yesterday that read, simply and entirely, "This stock sucks," I went back to check the long-term performance of the company for its shareholders. Interestingly, it's extremely good. That's even including the dismal lackluster performance over the past year, dropping our investment 48%. Check this out. Over the past three years, KLA Instruments has returned 29% annualized, rising from an October '93 midpoint price of $11 to today's close over $23. That's actually quite good. True, your Foolish Portfolio managers picked the exact top, the exact worst time to buy, but that suggests that we suck, not the stock.

Quarterdeck announced the late October debut of a new product, Partition-It. For $49.95, this one will help you save up to 40% of your hard drive space. Our techies here at Fool HQ inform me that 40% is only in the most extreme case --- say, a computer with 10,000 tiny files on its hard drive. If your hard drive doesn't look like that, you can probably expect hard-drive savings of roughly half that. Then again, doesn't a new one-gigabyte hard drive cost less than $250. Or what about a Zip disk? Anyway, Quarterdeck rose $1/8 to ask $6 5/8.

As for the rest, yawn. I'm going to sign offline and go back to the book I'm reading: A World Lit Only By Fire, by William Manchester... one of the more readable, enjoyable historical works I've come across. Should make for some cozy hours in front of the flame-filled hearth this autumn.

The Middle Ages and the Renaissance should hold at least as much interest for us as the latest Iomega uptick.

--- David Gardner, October 9, 1996

Today's Numbers

                   Day   Month    Year  History
        FOOL     -0.54%  -3.10%  47.91% 176.18%
        S&P 500  -0.53%   1.40%  13.15%  52.03%
        NASDAQ   -0.17%   0.90%  17.66%  71.90%


    Rec'd   #  Security     In At       Now    Change

  5/17/95 2010 Iomega Cor     2.52     23.13   818.03%
   8/5/94  680 AmOnline       7.27     26.75   267.80%
  8/13/96  250 3Com Corp.    46.86     66.38    41.65%
  8/11/95  125 Chevron       50.28     65.38    30.01%
  8/12/96  110 Minn M&M      65.68     70.13     6.77%
  9/27/96 -890 Quarterdec     7.08      6.63     6.48%
  10/1/96   42 LucentTech    47.62     47.38    -0.51%
  8/12/96  130 AT&T          39.58     39.25    -0.83%
  8/12/96  280 Gen'l Moto    51.97     50.50    -2.83%
  8/24/95  130 KLA Instrm    44.71     23.38   -47.72%

    Rec'd   #  Security     In At     Value    Change

  5/17/95 2010 Iomega Cor  5063.13  46481.25 $41418.12
   8/5/94  680 AmOnline    4945.56  18190.00 $13244.44
  8/13/96  250 3Com Corp. 11714.99  16593.75  $4878.76
  8/11/95  125 Chevron     6285.61   8171.88  $1886.27
  8/12/96  110 Minn M&M    7224.44   7713.75   $489.31
  9/27/96 -890 Quarterdec -6304.75  -5896.25   $408.50
  10/1/96   42 LucentTech  1999.88   1989.75   -$10.13
  8/12/96  130 AT&T        5145.11   5102.50   -$42.61
  8/12/96  280 Gen'l Moto 14552.49  14140.00  -$412.49
  8/24/95  130 KLA Instrm  5812.49   3038.75 -$2773.74


                             CASH  $22563.12
                            TOTAL $138088.50



Transmitted: 10/9/96