Fool Portfolio Report
Wednesday, March 12, 1997
by David Gardner (MotleyFool)
ALEXANDRIA, VA, March 12, 1997-- The market continued weak Wednesday, as technology stocks took the Fool Portfolio lower, and the Nasdaq moved closer to breakeven for the year.
The Fool Portfolio lost 1.56%, vs. drops of 0.87% and 0.96% for the S&P 500 and Nasdaq, respectively. Take a look at 1997 performance and you now see a significant divergence between the S&P and the Nasdaq. The S&P 500 is up 8.58% this year, which is right about where you'll find your typical S&P 500 index fund. The Nasdaq, meanwhile, is up just 1.01%, seven and a half percentage points back. And take a wild guess at what is presently seven and a half percentage points in back of the Nasdaq! You got it, the Fool Portfolio.
Ah, dear market, thou villainous dread-bolted remnant! Thou lumpish clapper-clawed whipster!
(I grabbed those two randomized quotes from one of the better little sites on the Internet, The Elizabethan Curse Generator. It's always good for a nice clean uppercut to one's own chin.)
America Online declined $1 3/4, further giving back some of its Monday Tartikoffian gains. Trois Com surrendered $3/4 to $34 1/2, and its brother Three (these two really do seem to move together), 3M, also surrendered $1 1/8. These moves, combined with another quarter clipped off of Iomega, made for a forgettable Wednesday.
AOL was sued today by a brokerage firm in New Mexico. I will not dignify that firm by giving its name, since it would appear a primary reason for filing suit was to attract publicity (AOL stated such, anyway). Suffice it to say that we're talking about a firm neither of us has ever heard of, or probably will ever hear of again. And this was all about penny-stock quotes.
Hey, is AOL sue-bait, or what? Anything the company does wrong seems to induce somebody somewhere to pick up a phone and call an attorney. In this case, the suit appears to involve a brief period last week when AOL's Nasdaq Bulletin Board quotes were inaccurate (they were quoted at 1/10th their actual price: 17 cents, instead of $1.70). The quote info is actually contributed by Standard & Poor's, a division of McGraw-Hill. But the suit targets AOL.
Now, I'm all for accurate quotes, but last time I checked, individuals who trade through brokers have the stock price verified for them before making the trade. And last time I checked, AOL was not a broker, and neither was Standard & Poor's. So even if you got the wrong quote off AOL and immediately called your broker and traded, you probably got the right quote first. But I'm just a Fool, of course, not part of anyone's legal defense team. I'm also a shareholder, and sit somewhere between amusement and bemusement at this constant knee-jerk suing. Geez.
Our AOL message boards have recovered somewhat in speed, so if you haven't clicked in for a few days, check it out. There will still be a significant delay (20-30 seconds) to enter the main gateway. Think of this time as analogous to opening a Web browser, or booting your machine. But once you've entered, they're moving lickety-split. If you have additional ideas or feedback, America Online has made two employees responsible for answering your questions promptly. Just click into our Ask AOL About the Boards, which is available on the Fool Message Board screen. We'll continue to ask AOL to improve the quality and add new features; your input helps greatly.
Hmmm... what else is worth a comment today? Well, did you hear that NASD Regulation -- a Fool business partner -- did a little poking into the practices of Smith Barney and (the former) Shearson Lehman Brothers and found a rat? The regulatory arm of the National Association of Securities Dealers today ordered these two to repay $5.6 million in improperly charged commissions. Details are sketchy (sadly), but appear to involve people who were redeeming mutual fund shares. Said individuals -- customers, they're traditionally called -- were getting commissions tacked on to their sale orders where none should exist.
"Making money the old-fashioned way," are we?!
The investigation began after a single customer complaint against Smith Barney. That's the growing power of the individual, today, which we celebrate. The same thing's happening online, but in a much more profound way. People are talking, which will force the words "service" and "full-service" increasingly back to their original meaning.
It's hard not to be optimistic about the future. Fool on!
--- David Gardner, March 12, 1997
(c) Copyright 1996, 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 3/4 44.25 T - 1/8 35.88 ATCT --- 7.75 CHV - 3/8 66.88 GM + 1/8 57.75 IOM - 1/4 14.75 KLAC + 1/4 40.13 LU + 1/2 56.50 MMM -1 1/8 91.00 COMS - 3/4 34.50
Day Month Year History FOOL -1.56% 2.77% -6.54% 149.43% S&P: -0.87% 1.70% 8.58% 75.45% NASDAQ: -0.96% -0.37% 1.01% 81.08% Rec'd # Security In At Now Change 8/5/94 680 AmOnline 7.27 44.25 508.42% 5/17/95 2010 Iomega Cor 2.52 14.75 485.56% 8/12/96 110 Minn M&M 65.68 91.00 38.56% 8/11/95 125 Chevron 50.28 66.88 32.99% 10/1/96 42 LucentTech 47.62 56.50 18.66% 8/12/96 280 Gen'l Moto 51.97 57.75 11.12% 8/12/96 130 AT&T 39.58 35.88 -9.36% 8/24/95 130 KLA Instrm 44.71 40.13 -10.26% 8/13/96 250 3Com Corp. 46.86 34.50 -26.38% 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 30090.00 $25144.44 5/17/95 2010 Iomega Cor 5063.13 29647.50 $24584.37 8/12/96 110 Minn M&M 7224.44 10010.00 $2785.56 8/11/95 125 Chevron 6285.61 8359.38 $2073.77 8/12/96 280 Gen'l Moto 14552.49 16170.00 $1617.51 10/1/96 42 LucentTech 1999.88 2373.00 $373.12 8/12/96 130 AT&T 5145.11 4663.75 -$481.36 8/24/95 130 KLA Instrm 5812.49 5216.25 -$596.24 8/13/96 250 3Com Corp. 11714.99 8625.00 -$3089.99 10/22/96 600 ATC Comm. 13761.50 4650.00 -$9111.50 CASH $4909.01 TOTAL $124713.89