Fool Portfolio Report
Friday, March 14, 1997
by Jeff Fischer (MF BudFox)
ALEXANDRIA, VA., (March 14, 1997) -- In the short story Soldier's Home, Private Krebs returns to America from World War One and has nothing to say. Looking back on the week, I feel somewhat the same. Public companies spilled vast amounts of news over the information barricades all week -- barricades growing ever smaller -- but the many announcements seem to have blended into obscurity, little of it demanding a new voice. I picture the soupy-green mix of a marching infantry, silent and passing -- always moving forward.
Again the largest armies appear to be marching over the small. Cisco Systems, Intel and Microsoft announced an alliance which aims to carry PC's head-long towards multimedia network devices for those using intranets and the Internet, with an emphasis on interactive learning. America Online shared features of its newest service revision arriving this summer. The company also announced the intent to purchase LightSpeed Media to produce Internet programs in the spirit of television, and announced a new navigation service, AOL NetFind, which sent Yahoo's stock lower. There's more... so much more... blurring... sweeping by....
Another week of forward motion allowed to slip by, perhaps as a natural defense to all that happens which can't be learned of. In the long run, you think to yourself, the progress that truly matters will rise to the top and be evident to everyone. Of course, digging to find rough diamonds now can lead to great investments before their shine is apparent to everyone (i.e. Iomega, two years ago, when the Zip drive was relatively unheard of. This week the company announced the shipment of a fifth millionth Zip drive, making the consumer electronic product one of the quickest to reach that sales milestone).
For the week, the S&P and Nasdaq both shed 1.5%, while the Fool Portfolio managed a toehold gain of 0.09%. For the year, the Nasdaq is now flat, while the S&P has accomplished growth of seven percent. Meanwhile, the Fool Port has pitched off seven percent of its value since January 1, 1997. Since inception, the Fool is up 147%, while the S&P and Nasdaq 73% and 79%.
There was, as implied, an incredible abundance of news this week, again. The likes of: AMERICA ONLINE (NYSE: AOL) is being sued by two separate parties, one for incorrect stock quotes and one for misleading business practices. Meanwhile, the company shared that the newest version of AOL, "Casablanca," due this summer, will feature toys such as ShockWave and FutureSplash, along with pictures and rich-text capabilities in electronic mail and chat rooms. AOL Phone is also in the works.
IOMEGA (NYSE: IOM) announced not only the five millionth Zip being shipped, but also an enhanced internal Zip drive solution which further positions the company in the battle to become a new storage standard. On October 17, 1995, Tom Gardner wrote that Iomega would probably "be the most exciting and most educational holding in the history of Folly Online." Fools were estimating the small company would achieve sales of over $1 billion in 1996, which ended fourteen months later. $1.2 billion was achieved. Iomega has been a great education, and maybe the best. But KLA Instruments and ATC Communications have already offered great lessons to us as well.
GENERAL MOTORS (NYSE: GM) shared news of another small union strike on Friday. 3COM (Nasdaq: COMS) announced new products this week which one year ago couldn't have been created. 3M (NYSE: MMM) shared that a kitchen sponge it sold is being recalled by the government. (It is smile-inducing to live in a country where even sponges are held to the highest scrutiny. You just can't take that fact for granted).
News... So much news....
If only to look in awe at a single week's worth of news, here are links to the recent stories on the Fool stocks:
In the face of so much news and in the age of abundant information, it's important to remember your "roots," to keep yourself and your investments grounded, and not be swayed by the daily fire. Detailed news is so often pregnant with static, while much larger messages are hidden inbetween the blasts. Search for those signals more than any other, and keep moving forward in accordance.
FOOLS strive to see the overall picture and direction of industries. For this portfolio that has meant Iomega, America Online, 3Com (yes, networking), and The Gap, among many more.
OTHERS on Wall Street downgraded Microsoft in August of 1995 because the Windows95 launch had taken place. Goldman Sachs, for one.... Kindly, what were you thinking? Dozens of others downgraded Intel on the Pentium flaw and again on a flat quarter last year, only to upgrade the stock months (and many dollars) later.
FOOLS believe in being optimistic about the future, especially the distant future, and in investing accordingly.
OTHERS in the Wall Street media claimed that America Online was doomed by the Web and other factors since $7.00 per share. America Online now has more subscribers than The Wall Street Journal, The New York Times, The Washington Post and others, combined.
The big picture is lacking in the media because they need a daily story. So, why do so many Wall Street analysts pretend to lack a "big picture" mind-frame?
FOOLS know the market has returned around 11% per year the past six decades, and invest for that reason. Investing upon this basis doesn't allow for short-term mind-frames.
OTHERS try to call the market monthly, or even more frequently. "Sell Now!" "Buy Now!" "Sell Now!" Where is the intelligence in this? Where is the analysis of companies and industries in these statements?
Late Friday afternoon I ran home and found Coca Cola's 1996 annual report in my mailbox. I have had time to read only one, bold paragraph from the CEO, which sums up stocks and progress, not just Coca Cola, extremely well:
"It may sound incongruous from one
of the world's most valuable
companies, about to celebrate its
111th birthday, but, truly, we are
just getting started."
Change that to one of the world's most prosperous countries, about to celebrate its 231st birthday, and still, we are just getting started.
If you don't expect to be baffled by the progress of leading public companies over the next ten, twenty, thirty years, perhaps you shouldn't be investing in stocks. And if you are looking decades out... well... what more can today's recap offer?
Except for this: Fool Party April First! In eight major cities across the country, all Fools will be celebrating the First of April in admirable and Foolish fashion. For one, show up and put your face in front of a camera and have it zoomed across the world on the Web. Hey, be sure to smile!
Finally, if this recap offered many new thoughts to you, you may be a recent Fool and haven't yet read The 13 Steps To Investing Foolishly. Everyone else, flame me!
Then Fool away your weekend!
(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 - 1/4 43.75 T - 1/4 35.50 ATCT - 1/8 7.50 CHV +1 1/8 67.38 GM + 7/8 57.88 IOM --- 14.63 KLAC - 1/8 39.75 LU -2 1/4 53.13 MMM + 5/8 89.75 COMS - 7/8 34.25
Day Month Year History FOOL -0.12% 1.88% -7.35% 147.26% S&P: +0.46% 0.30% 7.08% 73.03% NASDAQ: -0.03% -1.22% 0.15% 79.53% Rec'd # Security In At Now Change 8/5/94 680 AmOnline 7.27 43.75 501.55% 5/17/95 2010 Iomega Cor 2.52 14.63 480.59% 8/12/96 110 Minn M&M 65.68 89.75 36.65% 8/11/95 125 Chevron 50.28 67.38 33.99% 10/1/96 42 LucentTech 47.62 53.13 11.57% 8/12/96 280 Gen'l Moto 51.97 57.88 11.36% 8/12/96 130 AT&T 39.58 35.50 -10.30% 8/24/95 130 KLA Instrm 44.71 39.75 -11.10% 8/13/96 250 3Com Corp. 46.86 34.25 -26.91% 10/22/96 600 ATC Comm. 22.94 7.50 -67.30% Rec'd # Security In At Value Change 8/5/94 680 AmOnline 4945.56 29750.00 $24804.44 5/17/95 2010 Iomega Cor 5063.13 29396.25 $24333.12 8/12/96 110 Minn M&M 7224.44 9872.50 $2648.06 8/11/95 125 Chevron 6285.61 8421.88 $2136.27 8/12/96 280 Gen'l Moto 14552.49 16205.00 $1652.51 10/1/96 42 LucentTech 1999.88 2231.25 $231.37 8/12/96 130 AT&T 5145.11 4615.00 -$530.11 8/24/95 130 KLA Instrm 5812.49 5167.50 -$644.99 8/13/96 250 3Com Corp. 11714.99 8562.50 -$3152.49 10/22/96 600 ATC Comm. 13761.50 4500.00 -$9261.50 CASH $4909.01 TOTAL $123630.89