Fool Portfolio Report
Wednesday, October 22, 1997
by David Gardner ([email protected])

ALEXANDRIA, VA (October 22, 1997) -- Following our bypassing of the S&P 500's 1997 return yesterday, The Fool Portfolio waved b'bye with the motley hankie to the Nasdaq today, as well. The Fool Port rose a stirring 1.71%, helped along by strong moves in 3M (reporting record earnings), America Online, and Iomega. An extra buck for Amazon, and a smidgen drop by El Donald never hurt a bit either, of course.

Following market-beating years in 1994, 1995, and 1996, the Fool Portfolio has enjoyed a rocky 1997. After whipping the market averages the first few weeks of January, our unWise portfolio sounded the death rattle all the way through March, at one point being down 18 percentage points to the S&P 500. But long-term investors know not to sweat the small stuff (gee, sounds like a bestselling book title somebody should pen sometime...), and Foolish long-term investors believe in sticking to a disciplined market-beating approach through all market conditions. You see, in the end (we believe), you'll be a winner. I think we're struttin' that stuff.

We haven't necessarily expected to beat the market in 1997, given how far down we were for so much of the year. Hey, we're pleased as petunias. We're the first to point out that we can't possibly expect to always beat the market every year... the statistical odds against doing so are absolutely huge! That said, we shall always hold ourselves to a higher standard than your average fund manager charging high fees to return underperformance to his customers. Yes, over 90% of mutual funds were below the 1997 market averages, last we checked.

Even given the extreme unlikelihood of beating the market over a long consecutive string of years, that doesn't keep our eternally competitive and gaming Foolish spirits from relishing the challenge, and going for it. So while we still could easily wind up losing the 1997 competition, we do celebrate the comeback and hope that you will too, dear Fool. Because it's really a fable about patience, and optimism, and succeeding despite making tons of your own mistakes. The Motley Fool's message is loud and clear -- louder and clearer every day (yeah, even Dilbert's starting to borrow our stuff -- hi there, Scott!) -- which is, simply, "Manage your own money, do your homework, be disciplined and Foolish, and you can and will outperform the Wisemen of Wall Street."

Minnesota Mining and Manufacturing (NYSE: MMM) reported record sales and earnings for its third quarter. The company's revenues were $3.8 billion for the September period, with operating margins (profits before taxes, taken as a percentage of sales) rising almost one full percent to 18.3%. May not sound like much, but when you're a $15 billion business, dear Fools, every percentage point counts. 3M rose a full $6, no doubt powered up by a Goldman Sachs ratings upgrade in reaction to the earnings report. Earnings themselves came in at $1.05 per share, a penny ahead of estimates.

MMM has been a fine Foolish Four stock, outperforming the market by about 10 percentage points since our August 1996 buy.

CHEVRON (Nasdaq: CHV) also reported earnings. The numbers were strong and profitable, though below past comparable quarter results. Consequently, the stock gave away $1 3/8.

Both America Online and Iomega had $1+ rises on no significant news. That was extremely impressive, in the face of a downer day on Wall Street. Both hit new 52-week highs, so you can just hear those momentum investors' Quotrek beepers going off everywhere, eh? In fact, our own David Wolpe quipped to me today that the Fool should offer a service that sends beeper alerts to people when their stocks sit $1/8 BELOW new highs... there has to be some money in that!

Amazon.com, a day ahead of its own earnings report (er, sales report!), scored a one-buck gain as well, in aid of the Foolish cause.

Speaking of aiding the Foolish cause, if you do not currently enjoy our Motley Fool syndicated column in your local newspaper, you're missin' out! Launched in July, our weekly syndicated feature is a colorfully written half-page full of investing education, amusement, and enrichment. We're currently in 88 papers, many of them the best and brightest, which is great! But it also leaves room for growth, which you can help us with. We've put together this feature which shows which papers we're in, and which papers we're not in. Particularly if your local paper is listed among those we're NOT in, we'd appreciate it if you'd take the time to jot a short e-mail to the biz editor, asking for a bit more Folly! All e-mail addresses for the editors at these various papers are provided, so it's very convenient.

And now, I trot back out into the Fields of Folly. Till next time.

-- David Gardner, October 22, 1997

Drip Portfolio -- Intel Update, KO's earnings part one.
Fool Message Boards -- Speak your mind!
Boring Portfolio -- Bore bears down. And falls.
Fool Four Portfolio -- 23% annually, historically.
Market News -- All the News, early.
Port Tracker -- Update your portfolio daily.
Daily Double -- Egghead. No, not you!
Daily Trouble -- Right Mgmt.
Fribble -- A fun lesson from readers.

TODAY'S NUMBERS
Stock  Change    Bid
----------------
AMZN  +1       54.00
AOL   +2 3/8   90.38
T     -  1/8   49.50
CHV   -1 3/8   86.44
DJT   -  1/16  9.94
GM    +  1/4   71.56
INVX  -  3/8   29.06
IOM   +1 1/4   29.56
KLAC  +  7/16  62.19
LU      ---    86.06
MMM   +6       100.63
COMS  +  7/16  48.75



      
    
    
                  Day   Month    Year  History
        FOOL     +1.71%   6.69%  34.29% 258.41%
        S&P:     -0.39%   2.24%  30.75% 111.28%
        NASDAQ:  -0.26%   1.33%  32.30% 137.17%


    Rec'd    #  Security     In At       Now    Change
   8/5/94   355 AmOnline       7.27     90.38  1142.63%
  5/17/95   980 Iomega Cor     2.52     29.56  1073.12%
  10/1/96    42 LucentTech    47.62     86.06    80.74%
  8/11/95   125 Chevron       50.28     86.44    71.90%
  8/12/96   110 Minn M&M      65.68    100.63    53.21%
   9/9/97   290 Amazon.com    38.22     54.00    41.28%
  8/24/95   130 KLA-Tencor    44.71     62.19    39.09%
  8/12/96   280 Gen'l Moto    51.97     71.56    37.69%
            130 AT&T          39.58     49.50    25.07%
  6/26/97   325 Innovex       27.71     29.06     4.88%
  8/13/96   250 3Com Corp.    46.86     48.75     4.03%
  4/30/97 -1170 *Trump*        8.47      9.94   -17.34%


    Rec'd    #  Security     In At     Value    Change
   8/5/94   355 AmOnline    2581.87  32083.13 $29501.26
  5/17/95   980 Iomega Cor  2509.60  28971.25 $26461.65
  8/12/96   280 Gen'l Moto 14552.49  20037.50  $5485.01
   9/9/97   290 Amazon.com 11084.24  15660.00  $4575.76
  8/11/95   125 Chevron     6285.61  10804.69  $4519.08
  8/12/96   110 Minn M&M    7224.44  11068.75  $3844.31
  8/24/95   130 KLA-Tencor  5812.49   8084.38  $2271.89
  10/1/96    42 LucentTech  1999.88   3614.63  $1614.75
  8/12/96   130 AT&T        5145.11   6435.00  $1289.89
  6/26/97   325 Innovex     9005.62   9445.31   $439.69
  4/30/97 -1170*Trump*     -9908.50 -11626.88 -$1718.38
  8/13/96   250 3Com Corp. 11714.99  12187.50   $472.51


                              CASH  $32438.81
                             TOTAL $179204.06