Fool Portfolio Report
Thursday, September 11, 1997
by Tom Gardner (TomG@fool.com)


ALEXANDRIA, VA (Sept. 11, 1997) -- Ahh, revenge is a dish better served cold, like gazpacho.

Caged like a lion, The Fool Portfolio has roamed from bar to bar, licking its teeth, spying its prey. Today, with the cell thrown open, fanged Foolishness is just a stride and a snarling nip behind the S&P 500. The market fell 0.71%; our account rose 0.30%. And at day's end, our 1997 comparisons look like this:

S&P 500 + 23.20% Da Fool + 22.96%

As David wrote yesterday, at one point this year, The Fool Portfolio trailed the market by over 17 percentage points. Youch! Rest assured, merciful reader, the same sort of Folly torching will happen in future years. But I suspect we'll bounce back just as we have in 1997. Further, I believe this account will beat the market (perhaps even continue to trounce it) over the long-haul. At market close, our historical comparisons look like this (since August, 1994):

Da Fool + 228.16% S&P 500 + 99.08%

Today, we were carried by strong moves from America Online (+2 3/16), Iomega (+1) and AT&T (+1 1/16). AOL announced an advertising deal with TMP Worldwide, manager of The Monster Board on the Web. Iomega had no news on the day. AT&T? I didn't even bother to look. The spirit of The Foolish Four approach to investing is to never let the news shake you out of high-yielding turnaround stocks. An eye on the historical performance of the "mechanical" approach confirms that for me:

Fool- TotalThe Total Four Returns Dow Returns 197122.98% 23%9.06% 9% 197217.58% 45% 16.70% 27% 197332.09% 91% -10.86% 13% 1974 2.67% 96% -16.91% -6% 197582.20% 257% 44.24% 36% 197653.23% 447% 31.28% 79% 1977 1.98% 458% -13.44% 55% 1978 8.12% 504%2.52% 58% 1979 5.43% 536% 11.34% 76% 198046.63% 833% 25.31% 121% 1981-1.56% 819% -3.26% 114% 198247.88% 1259% 19.59% 156% 198335.20% 1737% 35.63% 247% 1984 7.40% 1873% 0.51% 249% 198538.20% 2626% 29.77% 352% 198628.43% 3401% 21.69% 450% 1987 2.28% 3481% 11.96% 516% 198814.46% 3999% 14.64% 606% 1989 9.04% 4369% 31.97% 832% 1990 -15.06% 3696% -9.17% 747% 199189.34% 7088% 31.48% 1013% 199228.77% 9156% 10.96% 1135% 199337.80% 12655% 17.96% 1357% 1994-6.70% 11800% 3.73% 1412% 199537.61% 16276% 36.66% 1966% 199630.47% 21265% 24.34% 2469% 26-Year Total Returns Fool-Four + 21,265% The Dow + 2,469%

Those numbers confirm that the approach has worked. The Fool-Four has stomped the market indices. And the indices have outperformed 80% of the universe of equity funds. Why, then, is so much money pouring into funds? There are two reasons. 1) Company retirement plans don't allow direct stock purchase (and what a great tragedy that is); 2) Most individual investors haven't yet heard of The Fool-Four approach.

We plan to continue championing the idea and quoting the performance numbers. We'll let underperforming mutual funds continue to misrepresent themselves in advertisements in glossy financial magazines. We'll keep celebrating mutual funds that beat the market and design their services around education (like the Stein Roe Young Investors fund, which -- however -- has gotten thwapped by the market this year). And we'll keep largely ignoring the news of the Fool-Four giants as we methodically invest our funds in high-yielding global giants.

If you need an example of why to ignore the news of these heavies, swim through this paragraph in a press release today from Fool holding, 3M Corporation. The excerpt comes from the announcement of a new product process, the 3M Crystal Silk™ transfer graphics, designed to bond corporate logos to the interior of automobilies. Here's a doozy description of the process' advantages:

One key to the silky look and feel of the transferred graphic is a uniform upper layer of transparent glass beads or "microspheres" which results in a three-dimensional surface with light gathering capability. Below the surface layer of beads are flexible ink and thermal bonding layers. A wide range of colors is possible, including reflecting pigments which provide eye-catching color changes. The Crystal Silk transfer graphics utilize some of the same microsphere technology 3M has developed to make reflective clothing and traffic signage.

We'll just stick to the numbers, letting them run the business and ink their own marketing material!

Tom Gardner, Fool

Drip Portfolio -- Pfizer
Fool Message Boards -- Speak your mind!
Boring Portfolio -- Boring holds Cisco, Oracle.
Fool Four Portfolio -- 23% annually, historically.
Market News -- All the news, early.
Port Tracker -- Update your portfolio daily.
Daily Double -- On the move! Why?
Daily Trouble -- Cut in half! A good deal?
Fribble -- A fun lesson from readers.


TODAY'S NUMBERS
Stock Change Bid ---------------- AMZN -1 5/8 37.88 AOL +2 3/16 78.50 T +1 1/16 43.00 ATCT - 3/16 4.81 CHV - 5/16 80.81 DJT + 1/8 11.44 GM - 7/8 66.25 INVX - 1/8 32.50 IOM +1 27.13 KLAC -1 3/16 71.50 LU - 5/8 78.88 MMM --- 90.06 COMS - 5/8 49.13
Day Month Year History FOOL +0.31% 5.36% 22.96% 228.16% S&P: -0.70% 1.46% 23.20% 99.08% NASDAQ: +0.04% 3.31% 27.02% 127.70% Rec'd # Security In At Now Change 8/5/94 355 AmOnline 7.27 78.50 979.35% 5/17/95 980 Iomega Cor 2.52 27.13 976.39% 10/1/96 42 LucentTech 47.62 78.88 65.65% 8/11/95 125 Chevron 50.28 80.81 60.71% 8/24/95 130 KLA-Tencor 44.71 71.50 59.91% 8/12/96 110 Minn M&M 65.68 90.06 37.13% 8/12/96 280 Gen'l Moto 51.97 66.25 27.47% 6/26/97 325 Innovex 27.71 32.50 17.29% 8/12/96 130 AT&T 39.58 43.00 8.65% 8/13/96 250 3Com Corp. 46.86 49.13 4.83% 9/9/97 290 Amazon.com 38.22 37.88 -0.91% 4/30/97 -1170 *Trump* 8.47 11.44 -35.05% 10/22/96 600 ATC Comm. 22.94 4.81 -79.02% Rec'd # Security In At Value Change 8/5/94 355 AmOnline 2581.87 27867.50 $25285.63 5/17/95 980 Iomega Cor 2594.53 26582.50 $23987.97 8/12/96 280 Gen'l Moto 14552.49 18550.00 $3997.51 8/11/95 125 Chevron 6285.61 10101.56 $3815.95 8/24/95 130 KLA-Tencor 5812.49 9295.00 $3482.51 8/12/96 110 Minn M&M 7224.44 9906.88 $2682.44 6/26/97 325 Innovex 9005.62 10562.50 $1556.88 10/1/96 42 LucentTech 1999.88 3312.75 $1312.87 8/13/96 250 3Com Corp. 11714.99 12281.25 $566.26 8/12/96 130 AT&T 5145.11 5590.00 $444.89 9/9/97 290 Amazon.com 11084.24 10983.75 -$100.49 4/30/97 -1170*Trump* -9908.50 -13381.88 -$3473.38 10/22/96 600 ATC Comm. 13761.50 2887.50-$10874.00 CASH $29541.35 TOTAL $164080.66

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