Fool Portfolio Report
Wednesday, January 8, 1997
David Gardner(MotleyFool)

ALEXANDRIA, VA, January 8, 1997-- The story hits the wires just after market close: "3M Sues Microsoft Over Post-It Notes." Yep, one of our Fool Port stocks is going to war with Softie. We've been there before: America Online's done it for a couple of years now. But all of a sudden... out of the blue... MMM vs. MSFT. We need to talk about this.

In its Office97 product, Microsoft (NYSE: MSFT) has a new feature called "Notes" which enables you to create little notes to yourself which you can move around as "on-screen reminders." You know, it's kinda like Post-Its IN your monitor, as opposed to the ones frequently appearing ON my monitor. Good idea. But 3M (NYSE: MMM) believes it "could cause confusion and mistakes which would negatively impact 3M and its product lines."

MMM vs. MSFT. The two titans square off over a field strewn with stickynotes. No word on where MMM is in after-hours trading.

OK, now I'll share with you my actual feelings: Does anybody think this will actually affect 3M Corp's stock very much? I'll grant you that Post-It notes are a significant product line, in the "hundreds of millions of dollars" as a 3M spokesman said. And yet, I'm not exactly seeing those sales dry up any following the inclusion of "a software component for creating ... computer representations of repositionable adhesive notes, yellow in color." In fact, you could make a decent argument that Microsoft will help 3M sell more of these things.

Indeed, the main point of titling tonight's report "MMM vs. MSFT" is to have a bit of fun with the media's infatuation with stirring up, and reporting on, controversy. "Yeah, but controversy sells!" I've always been told. And I suppose it does, some. But I continue to believe that thoughtful, educational, and amusing stories designed to enlighten and bring people (and viewpoints) together will sell more. So my headline, "MMM vs. MSFT," couldn't be further from the focus or intent of today's Fool recap.

But it's a headline that sells, right? Um... am I right? Ummm. Foolish lesson concluded.

The Fool Portfolio fell a nasty 1.51% today in a down market. Another day like that and we'll be down for the year. We're now even with the S&P 500 for this young 1997, and losing to the Nasdaq.

Today was most distinctive for a spate of announcements from computer manufacturers about their new lines of computers with Intel's MMX chip. The chip, which enhances multimedia computing and pumps up top-o'-the-line computer speeds by 20%, is Intel's big offering for 1997. Compaq, Dell, Hewlett-Packard, Micron, Packard Bell, and NEC all put out press releases today mentioning their inclusion of Iomega's (NYSE: IOM) Zip drive as either a standard feature or option in their new MMX computers. This was good news, though certainly in many cases the computer the new Zip was added to will simply replace a previous model that already had a Zip. Still, that's good news in itself.

Iomega's stock, on the other hand, closed down $1/8. Hmmmm. Well, maybe that had something to do with the most recent in a series of misleading articles about Iomega in The Wall Street Journal. An article in its "Inside Track" column today was essentially dedicated to spinning half-yarns out of context. The "story" today? Insider sales. HUGE, we hear Bridget O'Brian tell us. For instance, did you know that a venture cap firm whose managing partner, David Dunn, is Iomega's chairman got rid of 540,000 shares... or more than $9 million in value?

Ah, but read down a bit and it turns out the same firm continues to hold 11.5 million OTHER shares. Essentially, it sold off 4% of its stake. Can you imagine if The Wall Street Journal did big stories making companies look bad whenever a given mutual fund manager dumped 4% of his or her holdings?

Read on some more and you encounter Iomega's "worsened" prospects in "recent weeks." The company will cut 500 to 700 jobs in Utah. But did you read on and see that what the company's doing is just transferring its manufacturing overseas to Malaysia? The writer includes this information as a toss-away tidbit. Gimme a break.

Work like this may make print journalism obsolete even earlier than many observers expect. You see, you can't get away with not studying your subjects anymore. Or telling half truths in order to create a spin. Why? Because once you come to this wonderful online medium you encounter people talking. People talk back (scary, eh?)... everywhere. And our educated readership alternatively doesn't countenance sloppy work... whenever I make a mistake I get 5 e-mails within an hour pointing it out. I love it. I encourage it. I want to be accurate, and to learn, and to teach, and I have no interest in putting "spins" on anything.

--- David Gardner, January 8, 1997

MORE FOOLISHNESS: It's Industrial Evolution!

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

What's shaking for the networking industry in the year ahead? What might Fools expect from the food industry? From oil and gas? Real estate? Biotech? What stock investment ideas do the Fool's many industry analysts have to offer? Well, we've got answers to all these burning questions and much, much more. We're pleased as punch to offer a brand new bundle of exciting Foolish research -- featuring a look at the year ahead for eighteen different industries, including investment ideas for each one. You can buy reports for individual industries, or you can get the entire shebang, which includes a look at the economy. For more details on Industrial Evolution, visit FoolMart.

TODAY'S NUMBERS 

Stock  Change    Bid
--------------------
AOL   -1       34.63
T     -  3/8   38.50
ATCT  ---      13.63
CHV   -1 3/8   66.38
GM    -  1/8   59.13
IOM   -  1/8   17.00
KLAC  -  1/2   38.38
LU    +1 1/8   48.00
MMM   -  1/8   83.75
NCR   -  5/8   34.38
COMS  -3 3/8   72.00


    
  

      
                   Day   Month    Year  History
        FOOL     -1.51%   1.04%   1.04% 169.67%
        S&P 500  -0.64%   1.04%   1.04%  63.27%
        NASDAQ   -0.56%   2.27%   2.27%  83.34%


    Rec'd   #  Security     In At       Now    Change

  5/17/95 2010 Iomega Cor     2.52     17.00   574.88%
   8/5/94  680 AmOnline       7.27     34.63   376.08%
  8/13/96  250 3Com Corp.    46.86     72.00    53.65%
  8/11/95  125 Chevron       50.28     66.38    32.00%
  8/12/96  110 Minn M&M      65.68     83.75    27.52%
  8/12/96  280 Gen'l Moto    51.97     59.13    13.76%
    1/2/97   8 NCR           33.75     34.38     1.85%
  10/1/96   42 LucentTech    47.62     48.00     0.81%
  8/12/96  130 AT&T          39.58     38.50    -2.72%
  8/24/95  130 KLA Instrm    44.71     38.38   -14.17%
 10/22/96  600 ATC Comm.     22.94     13.63   -40.60%


    Rec'd   #  Security     In At     Value    Change

  5/17/95 2010 Iomega Cor  5063.13  34170.00 $29106.87
   8/5/94  680 AmOnline    4945.56  23545.00 $18599.44
  8/13/96  250 3Com Corp. 11714.99  18000.00  $6285.01
  8/11/95  125 Chevron     6285.61   8296.88  $2011.27
  8/12/96  280 Gen'l Moto 14552.49  16555.00  $2002.51
  8/12/96  110 Minn M&M    7224.44   9212.50  $1988.06
  10/1/96   42 LucentTech  1999.88   2016.00    $16.12
    1/2/97   8 NCR          269.00    269.00     $0.00
  8/12/96  130 AT&T        5145.11   5005.00  -$140.11
  8/24/95  130 KLA Instrm  5812.49   4988.75  -$823.74
 10/22/96  600 ATC Comm.  13761.50   8175.00 -$5586.50


                             CASH   $4600.04
                            TOTAL $134833.17