Fool Portfolio Report
Friday, September 26, 1997
by Jeff Fischer ([email protected])

ALEXANDRIA, VA (Sept. 26, 1997) -- The last time that the market had good economic news that sent stocks higher, we wrote that within one month there would surely be "bad" news that would send stocks lower. We also guessed that there would soon be good news again, followed by more bad news, ensued by yet more good news -- and all told, we hypothesized that stocks would see-saw their way through summer, into the fall and into eternity.

So far we're dead right.

The trailing end of our prediction is that over the next twenty years, and longer, leading companies will see their stock prices increase as the value of their underlying businesses increase. There we have it. Turn off CNBC and go outside and play. Be a Fool for the rest of your days.

Bad news sent stocks lower just the other week, and good news (slower economic growth than anticipated) sent stocks higher again on Friday. Is that stuff worth covering? Many economic analysts would do better to analyze individual businesses instead, and focus on the micro-level of investing rather than trying to nail down the vast and complicated "macro." Simply put:

If you're a long-term investor, the short-term
macroeconomic picture just doesn't matter.

This past week the winds whipped stocks to and fro, while Fools held tight to the mast. This year the market has had more 1% swings in a single day than any other year. It's been choppy. So choppy that you hardly notice it anymore. In the end, we find ourselves close to unchanged for this past week, with the S&P down 0.56% and the Fool off -- oops -- 0.93%. The Fool lost the week, despite strength in Amazon, 3Com, and a drop in Trump Hotels. It was Iomega and America Online that hurt the Fool, both down a few dollars on no news.

This week the biggest news from our stocks came from 3COM (Nasdaq: COMS). The company announced earnings that were in line with estimates, on a 28% increase in revenue, to $1.6 billion. The first quarter as a merged company with U.S. Robotics appeared fine, as gross margins increased slightly to 48%, which helps squish the fear that pricing cuts are chipping into profits. The Fool covered the earnings and provides a current valuation and a conference call summary in the coverage. The Fool Port has no thoughts of changing its holding in 3Com. The stock has a YPEG value of $64 on this year's estimate (ended May of 1998), and a YPEG value of $84 on fiscal 1999 earnings, ended May of 1999.

TRUMP HOTELS (NYSE: DJT) had a see-saw week, up sharply on Monday on word that a few analysts put "buys" on the stock because of a suspected property sale. It then fell sharply the remainder of the week, after DLJ Securities downgraded the stock and cut estimates, and Bear Stearns stated that the rumors of a property sale were dubious. Bear Stearns also said that the property in question is only worth $550 million to $650 million, not $1 billion, as was rumored. Trump traded on heavy volume.

Also on the week, 3M (NYSE: MMM) was upgraded to a "strong buy," AMAZON.COM (Nasdaq: AMZN) announced a new proprietary technology called 1-Click shopping, and ATC COMMUNICATIONS (Nasdaq: ATCT) didn't report earnings. ATC was due to announce earnings the end of August, and then early September, and now... well... now we've just concluded that they've gone private. The company has boarded up the windows and gone private. Management is in denial that it was ever a public company at all.

Kidding. ATC should announce earnings before October sets in. Two cents per share is expected. This puppy has $106 million in trailing sales and a $100 million market cap. Micro-cap. By far the smallest cap in the portfolio. Trump is next at $232 million. Innovex is next at $475 million. Anyway, ATC's stock was strong early in the week, above $5, but slipped back down by Friday.

Speaking of tracking stocks and your portfolio, the Fool's "PortTrak" has been updated significantly. We've taken suggestions and put them into the latest version, "PortTrak 2.0." The new PortTrak is entirely Internet friendly (it works with your Internet stock quotes), it's DRiP friendly, it's cheap ($25.00)... and, well, the details are behind that magic blue link. It's a great way to measure your portfolio's performance against the market, help with taxes, get index updates, and so on.

We'd like to close by congratulating Motley Fool co-founder David Gardner. David has been nominated Young Alumnus of the Year at his alma mater, the University of North Carolina, at Chapel Hill. David is also celebrating, with all of us, the launch of Fool UK. This new site is Foolishness at its old world best. We'll close this week with some writing from TMF Googly, in England. The Friday Fool UK column begins:

Foolish Friday

"It's Friday. Most people's favourite day of the traditional working week. A recent survey carried out by Fool UK confirmed that finding. When asked to rank, in order, their favourite day of the working week, the survey found the following remarkable results. Going from most to least popular, they were:

1. Friday
2. Thursday
3. Wednesday
4. Tuesday
5. Monday

Absolutely astounding."

Have a Foolish weekend...

Drip Portfolio -- Abbott Labs, Part 2.
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 -- Good business?
Daily Trouble -- Cut in half! A good deal?
Fribble -- A fun lesson from readers.

TODAY'S NUMBERS
Stock  Change    Bid
----------------
AMZN  +1       49.63
AOL   -1 3/8   71.56
T     +  1/2   45.44
ATCT  -  3/8   4.75
CHV   +  3/8   83.06
DJT   -  3/8   10.31
GM    +  13/16 65.94
INVX  +  3/16  32.94
IOM   +  7/16  26.50
KLAC  -3 1/16  69.38
LU    +  3/4   80.88
MMM   +2 5/8   90.44
COMS  +  7/8   51.06



      
    
    
                   Day   Month    Year  History
        FOOL     +0.60%   7.02%  24.91% 233.36%
        S&P:     +0.78%   5.09%  27.60% 106.20%
        NASDAQ:  +0.20%   5.98%  30.30% 133.59%


    Rec'd    #  Security     In At       Now    Change
  5/17/95   980 Iomega Cor     2.52     26.50   951.59%
   8/5/94   355 AmOnline       7.27     71.56   883.96%
  10/1/96    42 LucentTech    47.62     80.88    69.85%
  8/11/95   125 Chevron       50.28     83.06    65.18%
  8/24/95   130 KLA-Tencor    44.71     69.38    55.16%
  8/12/96   110 Minn M&M      65.68     90.44    37.70%
   9/9/97   290 Amazon.com    38.22     49.63    29.84%
  8/12/96   280 Gen'l Moto    51.97     65.94    26.87%
  6/26/97   325 Innovex       27.71     32.94    18.87%
  8/12/96   130 AT&T          39.58     45.44    14.81%
  8/13/96   250 3Com Corp.    46.86     51.06     8.97%
  4/30/97 -1170 *Trump*        8.47     10.31   -21.77%
 10/22/96   600 ATC Comm.     22.94      4.75   -79.29%

    Rec'd    #  Security     In At     Value    Change
  5/17/95   980 Iomega Cor  2594.53  25970.00 $23375.47
   8/5/94   355 AmOnline    2581.87  25404.69 $22822.82
  8/11/95   125 Chevron     6285.61  10382.81  $4097.20
  8/12/96   280 Gen'l Moto 14552.49  18462.50  $3910.01
   9/9/97   290 Amazon.com 11084.24  14391.25  $3307.01
  8/24/95   130 KLA-Tencor  5812.49   9018.75  $3206.26
  8/12/96   110 Minn M&M    7224.44   9948.13  $2723.69
  6/26/97   325 Innovex     9005.62  10704.69  $1699.07
  10/1/96    42 LucentTech  1999.88   3396.75  $1396.87
  8/13/96   250 3Com Corp. 11714.99  12765.63  $1050.64
  8/12/96   130 AT&T        5145.11   5906.88   $761.77
  4/30/97 -1170*Trump*     -9908.50 -12065.63 -$2157.13
 10/22/96   600 ATC Comm.  13761.50   2850.00-$10911.50

                              CASH  $29541.35
                             TOTAL $166677.79