Fool Portfolio Report
Wednesday, September 24, 1997
by David Gardner ([email protected])

ALEXANDRIA, VA (Sept. 24, 1997) -- A down day for the market was a downer day for the Fool Portfolio, which suffered a loss of 1.42%. The S&P 500 dropped 0.78%, with the Nasdaq escaped with a decline of 0.59%.

Why does the market move the way it does, day by day? There's no simple answer to that question, and we here at Fool HQ spend very little time trying to come up with any. I was humored today by Reuter's market article, which led off with, "Stocks fell on Wednesday amid a lack of fresh economic news and persisting worries about third-quarter profits."

Hey there, "fresh economic news" can affect the markets either way, and actually pinning down the exact effects is completely impossible anyway. Plus, the writer's assumption that the market needs to feed off fresh economic news each day in order to rise isn't logical. Further, whose "persisting worries about third-quarter profits" are we talking about, exactly? I'd like some attribution, some sources. This is uselessness, fellow Fools!

I happen to be quoting Reuter, but this isn't about Reuter at all. The truth is I could be quoting anyone who comes up with simplistic "explanations" of why the market did what it did on a given day. "Profit-taking" is of course one of the emptiest of all explanations.

Well then, Amazon.com was down on "profit-taking" today (snicker snicker), losing three bucks to $52 1/2. Others responsible for our downdraft include AOL (off $15/16), Iomega (off $13/16), and 3M (off $1 1/16).

Whoa there... are things moving by sixteenths these days, or what? This is a generally good sign, since spreads are narrowing and prices are becoming more varied and "complex." After all, if a stock has a bid (or sell price) of $50, and you want to buy it, you'll have to pay up over that (the ask price). The difference between the two, or "spread," is what's pocketed by the Wall Street middlemen; you'd therefore like the spread to be as little as possible. In the past, you'd have been dealing much more with quarters and eighths. If a stock bid $50, you'd often have had to pay $50 1/8, or $50 1/4. With the present popularity of sixteenths (some people use the lingo "s'teenth"), it's now often possible to buy that same stock at $50 1/16.

Thus, the winner here is the individual investor.

The loser is anybody who's getting sick of looking at fractional sixteenths.

I'd like to see us eventually move to a fully decimal-based system, which will (I believe) inevitably occur. All these fractions are a little dated by now. Imagine going to the Safeway to buy Cheerios and seeing the price tag say "$1 9/16." Much easier to price them at $1.56 (or $1.55 or $1.54... when we move to decimals, spreads should narrow further). For now, we must put up with this increasingly fractional world. As I've pointed out, there are advantages to it. But these advantages aren't very pretty.

Join the Fool crusade for decimals!

3COM (Nasdaq: COMS) bucked the market's downtrend today, rising (what else?!) $9/16 to close bidding $52 1/2. The company reported record earnings at market close yesterday. We have a full FoolWire special for 3Com's earnings, as well as Jeff's valuation of 3Com following the earnings.

Two short mentions of Foolish things to do. The first is that if you're in the Washington DC area, we'd love to invite you and your friends in for a free playtest of our coming Motley Fool board game. Come in to Fool HQ, hang out with us for half a day. We'll provide the lunch, the chairs, and even a table. All we ask of you is the requisite open mind, Foolish spirit, and the desire to bury 3 strangers in a humorous game of cutthroat investing.

Look at it this way, wouldn't you love to have been one of the first to play Monopoly? For info on this, and to reserve your spot, please send email to [email protected], as described behind this magic blue link.

The other is, if you're in the midst of looking for a new job or hiring for a new job, you absolutely must check out our Ask the Headhunter (ATH) feature. ATH just earned a "10" rating for content from the Dow Jones Business Directory, in addition to having its own popular book just out from Penguin. Particularly useful is the Today's Q&A section, in which every day Nick Corcodilos (our Foolish headhunter) answers one job-related question submitted by our readership.

Just another Foolish way to spend one's time, one that can lead to very practical pleasures and specific rewards.

-- David Gardner, September 24, 1997

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

TODAY'S NUMBERS
Stock  Change    Bid
----------------
AMZN  -3       52.50
AOL   -  15/16 74.81
T     +  1/2   45.06
ATCT  -  1/16  5.50
CHV   -  7/8   84.56
DJT   +  1/16  11.31
GM    -  1/2   66.00
INVX  -  9/16  33.00
IOM   -  13/16 26.63
KLAC  +  7/16  73.06
LU    -  15/16 81.56
MMM   -1 1/16  87.00
COMS  +  9/16  52.50



      
    
    
                   Day   Month    Year  History
        FOOL     -1.42%   8.34%  26.45% 237.47%
        S&P:     -0.78%   5.00%  27.50% 106.04%
        NASDAQ:  -0.59%   6.31%  30.70% 134.30%


    Rec'd    #  Security     In At       Now    Change
  5/17/95   980 Iomega Cor     2.52     26.63   956.55%
   8/5/94   355 AmOnline       7.27     74.81   928.65%
  10/1/96    42 LucentTech    47.62     81.56    71.29%
  8/11/95   125 Chevron       50.28     84.56    68.17%
  8/24/95   130 KLA-Tencor    44.71     73.06    63.41%
   9/9/97   290 Amazon.com    38.22     52.50    37.36%
  8/12/96   110 Minn M&M      65.68     87.00    32.47%
  8/12/96   280 Gen'l Moto    51.97     66.00    26.99%
  6/26/97   325 Innovex       27.71     33.00    19.09%
  8/12/96   130 AT&T          39.58     45.06    13.86%
  8/13/96   250 3Com Corp.    46.86     52.50    12.04%
  4/30/97 -1170 *Trump*        8.47     11.31   -33.58%
 10/22/96   600 ATC Comm.     22.94      5.50   -76.02%

    Rec'd    #  Security     In At     Value    Change
   8/5/94   355 AmOnline    2581.87  26558.44 $23976.57
  5/17/95   980 Iomega Cor  2594.53  26092.50 $23497.97
  8/11/95   125 Chevron     6285.61  10570.31  $4284.70
   9/9/97   290 Amazon.com 11084.24  15225.00  $4140.76
  8/12/96   280 Gen'l Moto 14552.49  18480.00  $3927.51
  8/24/95   130 KLA-Tencor  5812.49   9498.13  $3685.64
  8/12/96   110 Minn M&M    7224.44   9570.00  $2345.56
  6/26/97   325 Innovex     9005.62  10725.00  $1719.38
  10/1/96    42 LucentTech  1999.88   3425.63  $1425.75
  8/13/96   250 3Com Corp. 11714.99  13125.00  $1410.01
  8/12/96   130 AT&T        5145.11   5858.13   $713.02
  4/30/97 -1170*Trump*     -9908.50 -13235.63 -$3327.13
 10/22/96   600 ATC Comm.  13761.50   3300.00-$10461.50

                              CASH  $29541.35
                             TOTAL $168733.85