Fool Portfolio Report
Monday, September 8, 1997
by David Gardner ([email protected])

ALEXANDRIA, VA (Sept. 8, 1997) -- Benefiting from a strong rise in our shares of America Online, the Fool Portfolio rose in excess of 1 percentage point Monday, continuing its relentless quest to bypass the market averages. As of market close, the Fool Port (up 1.25% today) showed a 1997 annual return of 22.77%, now within three percentage points of the S&P 500's rise of 25.71%. The surging Nasdaq will be slightly more difficult to catch, though its 27.44% gain this year is certainly not unreachable.

We'll hope that our portfolio's new buy of AMAZON.COM (Nasdaq:AMZN) this week will help further the cause, as we work to get all our dollars into the market. As we were hard at work writing both this recap and that new purchase report, tonight's Fool Portfolio recap is an abbreviated one.

AMERICA ONLINE (NYSE: AOL) worked a deal over the weekend with WORLDCOM (Nasdaq:WCOM) to acquire CompuServe's content and subscribers, while selling back to WorldCom AOL's Advanced Networks and Services (ANS) subsidiary. That latter transaction is worth $175 million in cash to AOL, which strengthens its balance sheet at the same time that it exits AOL from the Internet infrastructure business, one in which it probably didn't ever need to be. A nice double-whammy that had investors very happy this morning, as the stock opened up $10. Over the course of the day, the euphoria somewhat subsided... but not that much. After all, you see here a new all-time high for America Online shares on a big jump riding huge volume. A very nice result.

AOL also entered into a long-term strategic relationship with WCOM providing our company with significantly expanded network capacity at favorable prices. That should help margins, as telecommunications costs make up a signfcant portion of AOL's cost structure.

It's pretty much bullish every which way you look on this story, and once again reconfirms the reasons we have bought and held this stock over the long term. AOL continues to eliminate its competition and build shareholder value. For more on this story, please check out our FoolWire conference call report and our Evening News.

On the downside, KLA-TENCOR (Nasdaq: KLAC) followed the rest of the semiconductor industry down, dropping $4 in the afternoon. As we can't find any reason for this quick drop at market close, we'll scan the message boards tonight to see if we've missed anything. No news, but this decline combined with 3Com shedding $1 15/16 did undercut what would otherwise have been a monster day.

In closing tonight, we encourage you to check out our new purchase report on Amazon.com, while at the same time urging everyone to make his or her own decision, and never too quickly. If you're interested, call up the company and get the financials, and while you're waiting, read our message boards (where you can read about how "overvalued" this stock is!) and check out the company's Web site. Fools invest for the long term, particularly important given the volatile and hard to understand valuations afforded Internet companies at present. If we're right about this investment, our purchase price today will be virtually irrelevant within a year or two en route to a maturation of the business, and long-term outperformance.

We'll look forward to entering our new position in Amazon.com tomorrow or later this week.

Fool on!

-- David Gardner, September 8, 1997

TODAY'S NUMBERS
Stock  Change    Bid
----------------
AOL   +6 1/8   76.06
T     +  1/4   40.19
ATCT  +  3/16  4.69
CHV   +2 5/16  80.69
DJT   -  1/8   11.25
GM    -  5/16  65.69
INVX  +1       32.88
IOM   ---      28.31
KLAC  -4       67.88
LU    +  3/16  82.63
MMM   +  3/16  92.06
COMS  -115/16  48.00



                   Day   Month    Year  History
        FOOL     +1.25%   5.20%  22.77% 227.66%
        S&P:     +0.23%   3.53%  25.71% 103.14%
        NASDAQ:  +0.59%   3.66%  27.44% 128.46%


    Rec'd    #  Security     In At       Now    Change
  5/17/95   980 Iomega Cor     2.52     28.31  1023.51%
   8/5/94   355 AmOnline       7.27     76.06   946.25%
  10/1/96    42 LucentTech    47.62     82.63    73.52%
  8/11/95   125 Chevron       50.28     80.69    60.46%
  8/24/95   130 KLA-Tencor    44.71     67.88    51.81%
  8/12/96   110 Minn M&M      65.68     92.06    40.18%
  8/12/96   280 Gen'l Moto    51.97     65.69    26.39%
  6/26/97   325 Innovex       27.71     32.88    18.64%
  8/13/96   250 3Com Corp.    46.86     48.00     2.43%
  8/12/96   130 AT&T          39.58     40.19     1.54%
  4/30/97 -1170 *Trump*        8.47     11.25   -32.84%
 10/22/96   600 ATC Comm.     22.94      4.69   -79.56%

    Rec'd    #  Security     In At     Value    Change
  5/17/95   980 Iomega Cor  2594.53  27746.25 $25151.72
   8/5/94   355 AmOnline    2581.87  27002.19 $24420.32
  8/12/96   280 Gen'l Moto 14552.49  18392.50  $3840.01
  8/11/95   125 Chevron     6285.61  10085.94  $3800.33
  8/24/95   130 KLA-Tencor  5812.49   8823.75  $3011.26
  8/12/96   110 Minn M&M    7224.44  10126.88  $2902.44
  6/26/97   325 Innovex     9005.62  10684.38  $1678.76
  10/1/96    42 LucentTech  1999.88   3470.25  $1470.37
  8/13/96   250 3Com Corp. 11714.99  12000.00   $285.01
  8/12/96   130 AT&T        5145.11   5224.38    $79.27
  4/30/97 -1170*Trump*     -9908.50 -13162.50 -$3254.00
 10/22/96   600 ATC Comm.  13761.50   2812.50-$10949.00


                              CASH  $40625.59
                             TOTAL $163832.09