Fool Portfolio Report
Tuesday, March 11, 1997
Tuesday, March 11, 1997
Hi there. Ready for the recap? Guess so. You're here. We all swing by this part of Fooldom for our own refreshment, though at different times, like a water-fountain in the middle of a park. Let's see if the water is warm or cold today.
First, note the format. Today we're in the style of the early days of Fooldom, when the recaps were thrown into cyberspace without much fanfare. (Not that they are now). No date-line, no by-line. Just a couple of brothers writing a few daily paragraphs about their portfolio and the financial world. On November 3rd, 1994, the Fool recap quoted Steve Case of America Online:
"`We've tripled our subscribers over the past year, and we believe that we'll at least double to 2,500,000 subscribers over the coming year,' said Steve Case, President and CEO of America Online."
AOL had a mere 1.2 million subscribers only twenty-eight months ago, now it has 8 million irate customers. The Fool owned 85 shares then, at a cost-basis of $58.18. Now, through splits, the Fool owns 680 shares at a $7 cost-basis. It has split... quite a few times.
In the late 1994 recaps there were more misspellled words, too, sometimes. So please exchuse them now. Now, let's see what we have today. Fool dropped 0.63%. S&P and Nasdaq gave back a bit, too.
Thought for the day: If you're told to invest for at least 3 to 5 years, at the end of that time-frame, do you remove your money? Well, no. (Unless you need it). But that 3 to 5 years is perpetually re-setting. The market doesn't suddenly sit up and take notice and start a clock the day you invest. You'll never reach the magic "three to five years" if you're investing regularly, and you shouldn't reach it. Being in good stocks your entire life is the best thing you can do for yourself and for your family, financially. You knew that? Okay. Maybe more of us didn't know that three years ago.
That said, I hope the market falls steeply so those investing regurlarly can invest at lesser prices. Baby Boomers, the largest portion of the working population, still have about 15 or 20 years to steadily invest their income before retirement. They should be hoping for quick, baseless declines in stock prices.
Today a research firm announced that 3COM (Nasdaq: COMS) holds 46% and 38% of the two respective Ethernet Switch markets. In both markets, Cisco Systems is number two, trailing by 27% and 9% in market-share percentage. 3Com needs to gain market-share in high-end products, though.
Even so, 3Com is as inexpensive as it has been in five years. Alone, it trades at 16 times the year's estimate, and the company's fiscal year ends in May; meanwhile, 3Com is expected to grow 30% per year. The value of that number is hazy, though, as the US Robotics merger hasn't been taken into account. The stock may doze in uncertainty as all of networking languishes due to a quantified slow-down in growth. Like semiconductors, though, networking isn't going away and is an incredibly strong industry. The leading stocks will come back in due time, when decent evidence of where the industry stands rolls out in future earnings reports. Semi's took well over a year to rebound. Not a long time.
In the meantime, some are nervous about 3Com and US ROBOTICS (Nasdaq: USRX) merging, as they remember the 1994 merger of Wellfleet and Synoptics which formed BAY NETWORKS (NYSE: BAY). Different story, though, and different times. Companies have really been building up networks the past few years, and probably didn't want to deal with a newly-formed organization (without all the right products) when other networkers were firmly in place with strong product lines. Now, many U.S. companies have their networks in place and are improving upon them. Business will likely go to the same companies whose products were initially implemented: 3Com and Cisco and US Robotics. 3Com and US Robotics already have market-leading products and customer-bases and market-share. True of Wellfleet and Synoptics back in 1994?
Plus, no two cultures are more identical than those of Skokie, IL (US Robotics) and Santa Clara, CA (3Com). The synergy as the companies meld their respective local cultures should be incredible.
To counter my generalized, "things will work out" attitude, read MF Templar's column about 3Com tonight in the Evening News.
IOMEGA (NSYE: IOM) was also in the news today. Exabyte Corp announced that Iomega's Zip drive is now a part of its "Eagle Nest" family of storage devices. The "Nest-Ready" Zip can be plugged into and removed from portable PCs like a removable car stereo. The Zip drive won't have a detachable face, though, but the product allows workgroups to share a single Zip drive among many PCs. That's... well.... Great, I guess. Sell more disks. Market saturation is the key, and Iomega has done an incredible job at it. All the largest PC makers are involved, now the agreements with firms we've hardly heard of are coming out of the wood-work.
"Eagle's Nest" has negative connotations to me, though. Reminds me of the Eagle's Nest in the southern tip of Germany, for which one of the worst tyrants of the century had an affinity -- looking across snow-capped Austria. But there are many other Eagle's Nests in the world, in the U.S. and in France, to name a few places.
To close: We get many newspapers at Fool HQ. I usually don't take them out of their plastic wrappers until a day or more after they've been delivered. The papers in the morning are already 12 hours old, seeing how the Fool staff has the market news published by 6 PM ET the day before, and the rest of the online world has more financial and world news than one could ever read. I open the newspapers for interest, not for news. I'm not slighting them, just noting how quickly things change.
Yesterday's Investor's Business Daily listed the results of a survey which asked, "Who Would You Clone?" The results are... well... here ya go:
Mother Teresa 20%
Billy Graham 19
Michelle Pfeiffer 7.7
Michael Jordan 7.2
Robert Redford 4.0
Bill Gates 3.9
Bill Clinton 3.7
Hillary Clinton 2.3
It's somewhat ironic that people would clone Bill Gates. Microsoft has largely gotten where it is by "cloning" everyone else's products. Clone the "master of the clone"?
What would happen to the free world? How do you picture Freedom?
----Jeff Fischer the 2nd, MF BudFox (email@example.com)
(c) Copyright 1997, The Motley Fool. All rights reserved. This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool.
Stock Change Bid -------------------- AOL -1 46.00 T - 3/4 36.00 ATCT + 1/4 7.75 CHV - 1/8 67.25 GM + 3/8 57.63 IOM - 1/8 15.00 KLAC -1 1/2 39.88 LU +1 5/8 56.00 MMM - 3/8 92.13 COMS + 5/8 35.25
Day Month Year History FOOL -0.63% 4.40% -5.06% 153.38% S&P: -0.28% 2.59% 9.53% 76.99% NASDAQ: -0.45% 0.59% 1.99% 82.84% Rec'd # Security In At Now Change 8/5/94 680 AmOnline 7.27 46.00 532.49% 5/17/95 2010 Iomega Cor 2.52 15.00 495.48% 8/12/96 110 Minn M&M 65.68 92.13 40.27% 8/11/95 125 Chevron 50.28 67.25 33.74% 10/1/96 42 LucentTech 47.62 56.00 17.61% 8/12/96 280 Gen'l Moto 51.97 57.63 10.87% 8/12/96 130 AT&T 39.58 36.00 -9.04% 8/24/95 130 KLA Instrm 44.71 39.88 -10.82% 8/13/96 250 3Com Corp. 46.86 35.25 -24.78% 10/22/96 600 ATC Comm. 22.94 7.75 -66.21% Rec'd # Security In At Value Change 8/5/94 680 AmOnline 4945.56 31280.00 $26334.44 5/17/95 2010 Iomega Cor 5063.13 30150.00 $25086.87 8/12/96 110 Minn M&M 7224.44 10133.75 $2909.31 8/11/95 125 Chevron 6285.61 8406.25 $2120.64 8/12/96 280 Gen'l Moto 14552.49 16135.00 $1582.51 10/1/96 42 LucentTech 1999.88 2352.00 $352.12 8/12/96 130 AT&T 5145.11 4680.00 -$465.11 8/24/95 130 KLA Instrm 5812.49 5183.75 -$628.74 8/13/96 250 3Com Corp. 11714.99 8812.50 -$2902.49 10/22/96 600 ATC Comm. 13761.50 4650.00 -$9111.50 CASH $4909.01 TOTAL $126692.26