Fool Portfolio Report
Monday, June 16, 1997
by David Gardner (MotleyFool)
ALEXANDRIA, VA, June 16, 1997-- No big deal day on Wall Street. Nasdaq up 0.60%. Not bad. S&P flattish, Fool slightly ahead of that.
I pan my eyes over Fool Portfolio news today, and it occurs to me I need help. There are too many headlines! Pass your eyes, if you can stand it, down today's list:
* 3Com Corp.'s Ratings Raised, Off S&PWatch Outlook Positive
* Iomega Zip Drive to Be Option on Micron Electronics Notebooks
* Microwave Power Devices, Inc. Awarded a $7.3 Million Follow-On Amplifier Order With Lucent
* 3M Forms New Division
* New Software for 3Com PalmPilot Professional Gives Users Remote Access to E-mail and Personal Information
* AT&T Digital Link adds incoming local call capabilities
* America Online Passes 750,000 Member Mark Internationally
* 3Com introduces the industry's most cost-effective, scalable 10/100 Mbps Ethernet workgroup switch
*3Com, Lanworks Technologies, McAfee and ON Technology demonstrate solutions extending benefits of NetPCs to all desktop computers
*AT&T Capital Leasing Services advances Internet strategy to expedite the financing of technology and equipment
*Top Student Engineers Push the Envelope in Auto Technology: FutureCar Challenge 1997 Ends With California Victory (GM)
If you're like me, you don't even have time to read each of these stories. The idea of then going on to fully digest them, put them into their proper context, and discard the irrelevant elements is utterly impossible. Sure, some days feature fewer headlines... a more manageable news stack. But not today.
I made an effort, of course. I read about 3M's new division: adhesives. What began as a department has through sheer business size and innovation achieved the status of a division, the first such department at 3M to do this in several years. I liked the quotation explaining the move: "Our success has been based on innovative products which solve customer problems and reduce total cost." That succinctly sums up Trois M's entire corporate mission, which you may already know if you've read Built to Last. Innovate to solve problems and reduce costs. That'll build you to last, eh?
I had to read the Iomega release, of course. Few more exciting business stories have emerged from the mid-1990's than this one. It turns out that the company's new laptop Zip (due out latter half of '97) was made an option on a new Micron computer. Not terribly earth-shattering or surprising, that one. I do like one quotation here, as well: "The Zip drive is not only the emerging storage standard for all computers, but it is an enabling technology that lets our customers use the multimedia power of our computers to create, entertain, and work with more power than ever before.'' You might expect that comes from some VP at Iomega. Nope, that quote (the italics were mine) came from Brian Klene, Micron Electronics' executive vice president of sales and marketing.
Scanning down further, the AT&T releases I don't really bother with. I'm a Foolish Four investor, so it's not like I have to keep up with AT&T's every latest initiative. (I do wish more of them would actually succeed, of course, but I'm not sure doing my shareholder's part to read the Capital Leasing Services announcement will be of any real benefit in that direction. Have to love AT&T Wireless, though.)
3Com releases I can't really keep up with, either... not when they shoot out that much at once. What I instead do is read a great feature on 3Com's CEO Eric Benhamou from the San Jose Mercury News. It's at http://www.sjmercury.com/business/3comwest.htm, an engaging piece about one of Silicon Valley's least well-known CEOs. Indeed, I probably learned more from reading that profile of Benhamou than Trois Com's last dozen announcements about "cost-effective, scalable 10/100 Mbps Ethernet workgroup switches."
On the other hand, the stock that's concerned us most during June, Trump Hotels & Casino Resorts, has nothing on it. Nada. OK, the company did announce on June 11, "Trump wins okay for glass-wall slot machine room." But it's not like anything else has happened. Meanwhile, we show a 43% short-term loss on the stock, as of today's close. Should we cover, admitting failure? Or should we hold, because not a darn thing has happened? We ask ourselves this question regularly, and so far we've answered, "Hold." As rational beings, we try to make as much use of our collective Foolish noggin as possible, and if our brain turns up nothing we tend not to act.
So there you have it. Too much information about things we don't need to know, and not enough about what we do. Wouldn't that just be the way of it?!
Of course, I hope this column every night serves as a way for you to cut down on your reading time. When it succeeds best, our work puts the right signposts in the forest, so that you sip from the mountain spring and see the rainbow without wasting time tramping around the thicket.
To that end, what will guides all of us best are the long-term "Built to Last" investment thoughts and ideas that we have, that cause us to love companies like 3M and only buy others (like AT&T) when our Foolish approach forces us! What makes for successful Foolish investing, I'm quite convinced, is the act of reading the Benhamou profile and skipping the changes in debt ratings.
Shockingly, most of the institutions and traders focus on the latest news and ignore Benhamou, at their peril.
Brush over most of the headlines and stay Foolish.
--- David Gardner, June 16, 1997
Boards -- what are Fools saying?
Evening News -- Big movers, up and down.
Daily Double -- How can you find the next double?
Daily Trouble -- Is there value in this beaten down stock?
Boring Portfolio -- Bore is on the move.
Fool Four -- These giants are... almost too big.
Fribble -- A two minute, fun lesson from readers.
Stock Change Bid -------------------- AOL +2 1/2 61.00 T + 1/2 38.25 ATCT - 1/16 5.44 CHV + 7/8 76.88 DJT + 1/2 12.13 GM + 1/8 57.38 IOM - 1/8 20.50 KLAC + 9/16 46.69 LU -1 1/8 67.88 MMM -1 97.75 COMS - 5/16 47.25Day Month Year History FOOL +0.13% 3.86% 6.54% 184.33% S&P: +0.07% 5.38% 20.68% 95.01% NASDAQ: +0.63% 2.26% 10.92% 98.83% Rec'd # Security In At Now Change 8/5/94 355 AmOnline 7.27 61.00 739.06% 5/17/95 980 Iomega Cor 2.52 20.50 713.49% 8/11/95 125 Chevron 50.28 76.88 52.88% 8/12/96 110 Minn M&M 65.68 97.75 48.84% 10/1/96 42 LucentTech 47.62 67.88 42.55% 8/12/96 280 Gen'l Moto 51.97 57.38 10.39% 8/24/95 130 KLA Tencor 44.71 46.69 4.42% 8/13/96 250 3Com Corp. 46.86 47.25 0.83% 8/12/96 130 AT&T 39.58 38.25 -3.35% 4/30/97 -1170 *Trump* 8.47 12.13 -43.17% 10/22/96 600 ATC Comm. 22.94 5.44 -76.29% Rec'd # Security In At Value Change 8/5/94 355 AmOnline 2581.87 21655.00 $19073.13 5/17/95 980 Iomega Cor 2594.53 20090.00 $17495.47 8/12/96 110 Minn M&M 7224.44 10752.50 $3528.06 8/11/95 125 Chevron 6285.61 9609.38 $3323.77 8/12/96 280 Gen'l Moto 14552.49 16065.00 $1512.51 10/1/96 42 LucentTech 1999.88 2850.75 $850.87 8/24/95 130 KLA Tencor 5812.49 6069.38 $256.89 8/13/96 250 3Com Corp. 11714.99 11812.50 $97.51 8/12/96 130 AT&T 5145.11 4972.50 -$172.61 4/30/97 -1170*Trump* -9908.50 -14186.25 -$4277.75 10/22/96 600 ATC Comm. 13761.50 3262.50-$10499.00 CASH $49211.92 TOTAL $142165.17