Fool Portfolio Report
Wednesday, August 6, 1997
by Jerry Thomas (TMF Cheeze)
SHERMAN OAKS, Ca. (August 6, 1997) -- It's 105 degrees here in The Valley and my air conditioner isn't working. The landlord hasn't returned my calls, and it's so hot, my plastic plants are wilting. I mean, it's hot. Why, this afternoon, I even saw a squirrel with short-sleeve fur. I mean it's hot, folks. The yuppies on Ventura Boulevard were lining up at health clubs just so they could cool off in the sauna. But seriously -- if it gets any hotter, I'm going to have to change my screen name from Cheeze to Fondue.
(Insert rimshot here.)
Did I mention heat? Then how about the Fool Portfolio, which is quite steamy in its own right, now up 4.79% for the month of August -- a month, after all, that is only 6 days old. Today we saw a rally of 1.31%, beating both the S&P and the Nasdaq averages by a wide margin. This is despite the fact that we quite unFoolishly have far too much of our portfolio sitting in cash, on ice as it were, missing out on one of the most scorching stock rallies in market history. It's an opportunity lost, and we're paying for it, even if it doesn't show up in the day-to-day numbers.
Who's feeling the heat today? How about the honorable Mr. Donald J. Trump, whose debt-ridden TRUMP HOTELS & CASINO RESORTS (NYSE: DJT) was downgraded today to "underperform" from "hold" by analysts at Salomon Brothers. Salomon apparently looked at Trump's recent second quarter results, noticed they reeked like a baloney sandwich in the hot sun, and dropped their estimate for fiscal 1997 to a loss $1.05 per share. This is a revision downward from their previous guess of a minus $0.85. DJT lost more than 6% on the news. Today's decline is not nearly enough to cover the loss we still show for our short position here (we're in at $8.47 per share, and DJT closed the day at $9 3/4), but hey -- we'll take it.
Also a little moist under the collar today are shareholders of AMERICA ONLINE (NYSE: AOL). Despite an intraday rally that saw shares trading well above $75 apiece, AOL lost $2 5/16, closing out the day at $70 7/8. Investors, perhaps, are jittery about tomorrow's earnings report, which will be released shortly after the market closes. Analysts are expecting AOL to report $0.07 per share, and perhaps for AOL to offer an explanation for the recent telemarketing debacle which sent CEO Steve Case fumbling for his word processor to write an apology. Despite this public relations glitch, we continue to hold the opinion that America Online is solidly placed to take advantage of the vast commercial opportunities quickly emerging in cyberspace. It remains as the best-performing stock in our portfolio.
Networking stocks sagged a bit in the heat today as well, following an earnings report from CISCO SYSTEMS (Nasdaq: CSCO) yesterday that met earnings estimates, but showed some slight weakness in revenue. FoolPort holding 3COM CORP (Nasdaq: COMS) dropped in sympathy.
The rest of the Fool Portfolio, however, kept its cool. Our Dow stalwarts: GM, 3M, AT&T, and Chevron all booked solid gains in today's market, as if to give us one last boost before we do our annual Foolish Four Switch a few days hence. Let's hope they continue to perform as well while we've still got 'em.
And wait a minute -- what's this? ATC COMMUNICATIONS (Nasdaq: ATCT) was up better than 11% today. You want to talk about hot? No news has crossed my computer monitor to explain it. Maybe it was the dirty linen aired by David Gardner in yesterday's portfolio report that did the trick.
Finally, if any Fools out there in cyberland have any hints as to how I can beat the heat while my air conditioner on the fritz, I'd sure appreciate hearing them. Of course, a rallying stock market sure makes the heat wave easier to take. Hey, if the market keeps rising with the triple-digit temperature flashing on the sign outside the bank across the street, I could even get used to it.
Now, if you'll excuse me, I'm going to crawl back inside my refrigerator.
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Stock Change Bid ---------------- AOL -2 5/16 70.88 T +1 1/8 39.19 ATCT + 7/16 4.63 CHV + 5/16 80.19 DJT - 5/8 9.75 GM + 3/4 63.75 INVX + 3/8 34.75 IOM +1 1/2 24.25 KLAC + 3/8 66.00 LU +1 1/16 86.94 MMM + 5/16 95.88 COMS - 13/16 54.56Day Month Year History FOOL +1.31% 4.79% 21.10% 223.20% S&P: +0.83% 0.63% 29.64% 109.49% NASDAQ: +0.55% 2.30% 26.29% 126.39% Rec'd # Security In At Now Change 8/5/94 355 AmOnline 7.27 70.88 874.90% 5/17/95 980 Iomega Cor 2.52 24.25 862.30% 10/1/96 42 LucentTech 47.62 86.94 82.58% 8/11/95 125 Chevron 50.28 80.19 59.47% 8/24/95 130 KLA-Tencor 44.71 66.00 47.61% 8/12/96 110 Minn M&M 65.68 95.88 45.98% 6/26/97 325 Innovex 27.71 34.75 25.41% 8/12/96 280 Gen'l Moto 51.97 63.75 22.66% 8/13/96 250 3Com Corp. 46.86 54.56 16.44% 8/12/96 130 AT&T 39.58 39.19 -0.99% 4/30/97 -1170 *Trump* 8.47 9.75 -15.13% 10/22/96 600 ATC Comm. 22.94 4.63 -79.84% Rec'd # Security In At Value Change 8/5/94 355 AmOnline 2581.87 25160.63 $22578.76 5/17/95 980 Iomega Cor 2594.53 23765.00 $21170.47 8/11/95 125 Chevron 6285.61 10023.44 $3737.83 8/12/96 110 Minn M&M 7224.44 10546.25 $3321.81 8/12/96 280 Gen'l Moto 14552.49 17850.00 $3297.51 8/24/95 130 KLA-Tencor 5812.49 8580.00 $2767.51 6/26/97 325 Innovex 9005.62 11293.75 $2288.13 8/13/96 250 3Com Corp. 11714.99 13640.63 $1925.64 10/1/96 42 LucentTech 1999.88 3651.38 $1651.50 8/12/96 130 AT&T 5145.11 5094.38 -$50.73 4/30/97 -1170*Trump* -9908.50 -11407.50 -$1499.00 10/22/96 600 ATC Comm. 13761.50 2775.00-$10986.50 CASH $40625.59 TOTAL $161598.53
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