Fool Portfolio Report
Monday, October 6, 1997
by David Gardner (DavidG@fool.com)
ALEXANDRIA, VA (Oct. 6, 1997) -- With temperatures here in the mid 80's and sunshine everywhere you looked, the Fool Portfolio racked up a nifty 1.52% gain today, easily outdistancing the S&P 500 (up 0.79%) and the Nasdaq (up 0.35%). That gain put us back into positive territory for October, which hasn't been a pretty month so far. The Fool was helped out by an increase in our cash balance of about $800 (worth 0.48% for the portfolio), representing dividend and interest payments from August and September. Nice to have those Foolish Four stocks, and receive a little regular interest on the money raised from shorting The Donald.
Tom and I will be in California all next week moving down the coast from one Barnes & Noble to the next, beginning in the Bay Area (starting Sunday) then to Los Angeles then to San Diego (and points in between). If you're a Californian or if you have friends in California, we'll almost certainly pass nearby at some point, so please do make a point of coming out to meet and hang out with us! We'll begin each of the 90-minute events with a Foolish spiel about investing, then move into what we enjoy most of all, the interactive Q&A with the audience. All of these are free, and will conclude with a book-signing (i.e. you can purchase personally signed copies in advance of the holiday season). We're extremely fired up about this tour, and look forward to meeting many new Fools and renewing erstwhile acquaintances with many old ones!
LUCENT TECHNOLOGIES (NYSE:LU) named a new chief executive officer today. Actually, the company simply elevated its present chief of operations, Richard McGinn, to the position of CEO. McGinn, whose background is in sales and marketing (score another one for those marketing guys), has done stints in his career at Illinois Bell, AT&T, and Lucent, in addition to having served on Ma Bell's board for 15 years. (Mind you, this may be a strike against Mr. McGinn, given T's performance since the mid 80's.) At Lucent, McGinn has overseen strong sales and margin growth and outstanding appreciation in the stock price. Thus, we're all for the move. Lucent is up 81% since entering the Fields of Folly 370 days ago.
CHEVRON (NYSE:CHV) had a superb day, along with many other oil services companies, rising $1 15/16 to close at $87 13/16. CHV stock sits just $1 3/8 beneath its all-time high. Reasons for the stock's recent run are numerous. Investor's Business Daily reported last week that according to First Call, oil drillers as a group are forecast to show the best third-quarter profit gains among companies in the S&P 500. Barron's wrote bullishly of the sector over the weekend. Mix in some disappointing earnings pre-announcements from some high-profile technology companies (Silicon Graphics being only the most recent) and you can expect that some of that money is being reinvested in strong and dependable behemoths trafficking in the black juice.
Not to be ignored is the recent rise in prices following the Iran/Iraq scare (though oil prices dropped back today). Now, it's not that oil companies need rises in oil prices to remain profitable, as has been demonstrated over the past several decades. I find our discussion in the Oil and Gas folder, hosted by our own TMF Wldcat, to be excellent if you're interested in keeping up with the latest movers, or better understanding this industry. Indeed, recently one Fool even pointed out there that Chevron's last stock split (2-for-1) occurred at $88, so that's yet another potential reason for the stock's strength. (Speculative money always follows stock splits, whether that makes real sense or not!)
Since entering the Fool Port back on August 11th of 1995 (*sigh* -- I was still in my 20's back then, young thing that I was), Chevron has returned 75% on our investment. Does that sound great? Not bad. However, the S&P 500 since that day has risen -- cha-CHING -- 75% as well. Chevron would've been a superb stock in a bad market. Problem has been (a good problem to have) that the market has been amazingly good!
Well, the 1997 Nobel Prize for medicine just went to U.S. scientist Stanley Prusiner, who identified a new brain protein called the "prion" which, when it mutates, causes other brain proteins to mutate and eventually lead to diseases ranging from Alzheimer's to Mad Cow Disease. What relevance does this have to the Fool Portfolio? Absolutely none. But let's face it, this info is more important than that TRUMP (NYSE: DJT) has risen only once in the past 8 market trading sessions (and on that day, only $1/16).
3COM (Nasdaq: COMS) shot up $3 5/16 to close at $54 5/16. This morning, the company was upgraded from "buy" to "strong buy" by Cowen & Co.
INNOVEX (Nasdaq: INVX) was the day's Foolish dog. The stock dropped $2 3/8 to $28 1/2, its lowest level since July. Double normal volume; no news. While there hasn't been any specific news of late, the shares appear to be weighed down by a combination of short-term earnings outlook (reported on here numerous times in the past few weeks) and the ongoing potential threats of new technology from competitor Hutchinson Technology and other companies looking either to change the way the hard drive is built, or replace it altogether.
We remain confident in our long-term outlook for Innovex, as we believe in the hard drive, we believe in the company's strong and profitable business, and we believe in management's ability to continue to grow and diversify. As Vetoer671 put it in our Innovex folder on AOL, "Price will move according to earnings." Despite the negative sentiment hanging over INVX at the moment, we see expectations for earnings of $2.46 this year (ended September) and $2.93 next year.
-- David Gardner, October 6, 1997
Drip Portfolio --
Healthcare decision, part 1.
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.
Stock Change Bid ---------------- AMZN +1 1/4 49.00 AOL +2 5/16 77.69 T + 11/16 43.94 ATCT - 5/32 3.94 CHV +1 15/16 87.81 DJT - 3/16 9.63 GM + 11/16 68.50 INVX -2 3/8 28.50 IOM - 1/8 25.19 KLAC -1 1/16 66.63 LU - 3/16 86.06 MMM +1 1/16 96.00 COMS +3 5/16 54.31Day Month Year History FOOL +1.52% 0.88% 26.99% 238.91% S&P: +0.79% 2.68% 31.31% 112.19% NASDAQ: +0.35% 2.15% 33.37% 139.09% Rec'd # Security In At Now Change 8/5/94 355 AmOnline 7.27 77.69 968.18% 5/17/95 980 Iomega Cor 2.52 25.19 899.50% 10/1/96 42 LucentTech 47.62 86.06 80.74% 8/11/95 125 Chevron 50.28 87.81 74.63% 8/24/95 130 KLA-Tencor 44.71 66.63 49.01% 8/12/96 110 Minn M&M 65.68 96.00 46.17% 8/12/96 280 Gen'l Moto 51.97 68.50 31.80% 9/9/97 290 Amazon.com 38.22 49.00 28.20% 8/13/96 250 3Com Corp. 46.86 54.31 15.90% 8/12/96 130 AT&T 39.58 43.94 11.02% 6/26/97 325 Innovex 27.71 28.50 2.85% 4/30/97 -1170 *Trump* 8.47 9.63 -13.65% 10/22/96 600 ATC Comm. 22.94 3.94 -82.83% Rec'd # Security In At Value Change 8/5/94 355 AmOnline 2581.87 27579.06 $24997.19 5/17/95 980 Iomega Cor 2509.60 24683.75 $22174.15 8/11/95 125 Chevron 6285.61 10976.56 $4690.95 8/12/96 280 Gen'l Moto 14552.49 19180.00 $4627.51 8/12/96 110 Minn M&M 7224.44 10560.00 $3335.56 9/9/97 290 Amazon.com 11084.24 14210.00 $3125.76 8/24/95 130 KLA-Tencor 5812.49 8661.25 $2848.76 8/13/96 250 3Com Corp. 11714.99 13578.13 $1863.14 10/1/96 42 LucentTech 1999.88 3614.63 $1614.75 8/12/96 130 AT&T 5145.11 5711.88 $566.77 6/26/97 325 Innovex 9005.62 9262.50 $256.88 4/30/97 -1170*Trump* -9908.50 -11261.25 -$1352.75 10/22/96 600 ATC Comm. 13761.50 2362.50-$11399.00 CASH $30338.06 TOTAL $169457.06