Fool Portfolio Report
Wednesday, August 13, 1997
by David Gardner ([email protected])

ALEXANDRIA, VA, August 13, 1997 -- Treading water with more ability than the less buoyant S&P, today the Fool sunk only 0.15% while the S&P lost 0.49%. We'll take it! Unfortunately, the Nasdaq rose 0.45%, but let's be Wise and focus just on the S&P. Ready? Smile. We're being Wise for a moment.

Instrumental in that memorable defeat of the S&P 500 today was the catapult rise of KLA-TENCOR (Nasdaq:KLAC) to a new all-time high. The stock hit $66 7/8 before dropping to close bidding $65 5/8... up $3 3/4 on the day. The stock was certainly reacting to the strong earnings report of industry neighbor Applied Materials, which rose $9 today to $99.

KLAC... you remember this story? We paid $44 for then "KLA Instruments" two Augusts ago. It rose to $48 within a couple of weeks and then got absolutely decimated by the market. The stock lost almost two-thirds of its value in a matter of months, despite being a premiere enterprise in the outstanding semiconductor equipment industry.

KLA hit a low of $17 1/2 on September 10th of last year. At that point, it was off 61% for us; the S&P 500 over that time rose 19%. At today's close, however, KLA now shows a 47% total gain. The S&P 500 since the day we bought it? Up 66%... still winning. But we're officially going to begin the "KLA Watch" today, because we do expect this investment eventually to pass the market's performance and become a long-term winner for us. It's quite amazing to contemplate that, given that it was once so far down. But today more than ever, it looks like we have a winner.

Let the KLA Watch begin!

I want to make a particular point of mentioning Randy Befumo's "Fool on the Hill" tonight, accessible from our Evening News.

From day one, a prominent aspect of our total mission at Fool HQ has been to reform the financial industry wherever and whenever Foolishly possible. Wherever we see bunk or slanted numbers, misleading advertisements or empty promises, we blow our Foolish trumpets and call readers to arms. Industry-wide examples include, of course, "full-service" brokerage firm account-churning and chronic mutual-fund underperformance. On a more specific level, consider also our campaigns against Dan Dorfman's work on CNBC and Elaine Garzarelli's newsletter. Elaine's newsletter is still going, though The Wall Street Journal recently reported that her publisher is considering discontinuing it due to the falloff in subscriptions. (Any surprise there?) Dorfman is no longer employed by CNBC, and the network has not renewed his hype hype hype feature (much to the dismay, perhaps, of many daytraders). Indeed, flip through a copy of The Motley Fool Investment Guide and look at page 20 and you'll see that it now reads like ancient history, just two years after it was written. That's because everything we criticized CNBC for, on that page, has been discontinued... including, prominently, their "Buy Sell Hold" segments. It's a better network today, serving individual investors far better than even a year ago.

Randy tonight writes about a fellow named Wade Cook. You may or may not have heard of him. One of the scariest experiences I have had at Fool HQ is occasionally receiving mail from people who say, "There's this guy Wade Cook who conducts Wall Street seminars and I'm thinking of going. What do you think?" It's rather like writing, "There's this boat called the Titanic and I'm thinking of a sleeper cabin. What do you think?" Cook is the fellow who now has two self-published bestselling books on stocks. He asserts that people can double their money on the stock market every 2 1/2 to 4 months, using the market as "a money machine." Take the time to compound out those returns as Randy did a year ago July (Lunchtime News of 7/16/96) and you'll see that anyone who starts with even just a couple of hundred bucks would become the richest human being of all-time within a couple of decades.

This is perhaps the emptiest promise I've ever seen in financial publishing; apparently, America is still not well enough educated to be ignoring it.

Listen, we firmly believe that if you've read Cook or subscribed to any of his notions (or paid the entrance fees to his "seminars" -- sorry to cheapen the word), you need a serious amount of re-education and reconsideration about your investments and your financial future. What happens when you cross a charlatan with a mountebank? I'll let you answer that riddle, dear reader. Meantime, the company that Cook runs actually invests its own excess cash in real estate. Given that you can double your money in the stock market every few months, why would you do anything but? Right?

Stay Foolish out there.

--- David Gardner, August 13, 1997

Drip Portfolio -- Criteria for long-term buys, part 2.
Fool Message Boards -- Speak your mind!
Boring Portfolio -- TMF Boring returns!
Fool Four Portfolio -- 23% annually, historically.
Evening News -- What Goes Down A Little
Port Tracker -- Update your portfolio daily.
Daily Double -- Excite
Daily Trouble -- Dataworks, Corp.
Fribble -- A fun short lesson from readers.

TODAY'S NUMBERS
Stock  Change    Bid
----------------
AOL   +  3/8   67.63
T     -  3/4   39.69
ATCT  -  3/16  4.63
CHV   -113/16  79.00
DJT   -  1/16  9.81
GM    +  1/8   61.00
INVX  -  7/8   32.88
IOM   -  1/16  23.50
KLAC  +3 3/4   65.63
LU    - 15/16  82.56
MMM   -  5/8   93.88
COMS  -  5/16  54.13



      
    
    
                Day   Month    Year  History
        FOOL     -0.15%   2.20%  18.11% 215.22%
        S&P:     -0.49%  -3.38%  24.47% 101.14%
        NASDAQ:  +0.45%  -0.65%  22.65% 119.86%


    Rec'd    #  Security     In At       Now    Change
  5/17/95   980 Iomega Cor     2.52     23.50   832.54%
   8/5/94   355 AmOnline       7.27     67.63   830.19%
  10/1/96    42 LucentTech    47.62     82.56    73.39%
  8/11/95   125 Chevron       50.28     79.00    57.10%
  8/24/95   130 KLA-Tencor    44.71     65.63    46.77%
  8/12/96   110 Minn M&M      65.68     93.88    42.93%
  6/26/97   325 Innovex       27.71     32.88    18.64%
  8/12/96   280 Gen'l Moto    51.97     61.00    17.37%
  8/13/96   250 3Com Corp.    46.86     54.13    15.50%
  8/12/96   130 AT&T          39.58     39.69     0.28%
  4/30/97 -1170 *Trump*        8.47      9.81   -15.87%
 10/22/96   600 ATC Comm.     22.94      4.63   -79.84%

    Rec'd    #  Security     In At     Value    Change
   8/5/94   355 AmOnline    2581.87  24006.88 $21425.01
  5/17/95   980 Iomega Cor  2594.53  23030.00 $20435.47
  8/11/95   125 Chevron     6285.61   9875.00  $3589.39
  8/12/96   110 Minn M&M    7224.44  10326.25  $3101.81
  8/24/95   130 KLA-Tencor  5812.49   8531.25  $2718.76
  8/12/96   280 Gen'l Moto 14552.49  17080.00  $2527.51
  8/13/96   250 3Com Corp. 11714.99  13531.25  $1816.26
  6/26/97   325 Innovex     9005.62  10684.38  $1678.76
  10/1/96    42 LucentTech  1999.88   3467.63  $1467.75
  8/12/96   130 AT&T        5145.11   5159.38    $14.27
  4/30/97 -1170*Trump*     -9908.50 -11480.63 -$1572.13
 10/22/96   600 ATC Comm.  13761.50   2775.00-$10986.50


                              CASH  $40625.59
                             TOTAL $157611.97