Fool Portfolio Report
Monday, March 24, 1997
by David Gardner (MotleyFool)

ALEXANDRIA, VA, March 24, 1997-- Foolishness appreciated in value a little bit today, outscoring a continually slumping Nasdaq while underperforming the constantly rising S&P 500. It's more of same, is it not, dear reader? I'm amazed by the persistence of this trend.

The S&P 500 is now greater than 10 percentage points ahead of the Nasdaq, still inside one quarter. It's a three months whose end we await with fervor, as Foolishness has lost 10 percentage points in overall value. It is nice to be bouncing back off our lows, anyway.

Our Dow stocks carried the day, in combination with a fine performance by AMERICA ONLINE (NYSE:AOL). AOL rose $1 5/8 to a final trade of $41 3/4, in a weak technology market. No material news.

CHEVRON (NYSE:CHV) hit a new all-time high today. It appears just to be riding the big-cap wave, as its news items (Nigerian government owes us money, closing down a European refinery, typical stuff) are not exactly earth-shaking (or should I say "oil-striking"?).

I loved a post in our Oil and Gas message folder, put up by Calder yesterday. It shows the long-term performance of the oil and gas companies from 1970 through 1995, as measured by the Securities Research Company's Green Book. Over that period, a group listed as "Oil - International Group" (Amoco, Chevron, Exxon, Mobil, Royal Dutch, and Texaco) put up a gain of 821%, vs. the Dow Jones industrial average rise of 538%.

Any doubts about whether any of those stocks deserves a nifty little spot in your portfolio? Chevron's now been hanging in the Fool Portfolio since August of 1995, and has risen 40.0%. The S&P 500 has scored a 42.5% return since then, so the two run practically mirror each other. Over the past three years, CHV shares have appreciated 15.8% on an annualized basis, vs. an S&P 500 return of 19.4%.

But hey, have the past three years been big oil years? Not really. The mid-1990's have largely been go-go high tech bull market years. But even in such a low-inflation environment, look how Chevron has held up! And consider how relatively strong this stock will be should the consumer price index pick up and hurt the market. For two years, Chevron has served as a very nice defensive play for the Foolfolio, should we need a bridge over troubled water.

3M (NYSE:MMM) and GENERAL MOTORS (NYSE:GM) rose $1 1/2 and $1, respectively. As you might expect, this all meant a very good day for the Foolish Four, which rose 1.60%, though it's still off 2% for the year. (AT&T is really hurting the Foolish Four so far in '97.) It's good to have Robert Sheard back writing his Dow Dividend column, following some time away last week. Our thanks to MF Shrimp and MF Miel for doing a fine job filling in for Robert while he was away. Now MF Boring is away, and MF BudFox wrote tonight's Bore recap.

The Dow average ran up 100 points, here, preceding the Fed meeting tomorrow after which many people expect Alan Greenspan to knock up interest rates a quarter-point. To what extent that's already factored into the market, we'll soon discover, no? Fools tend not to make predictions about these things, as we tend to have our eyes on 2007, not 1997.

GM is recalling its first 1,400 1997 Corvettes. Fortunately for everyone involved, and I emphasize, there have not been any reports of injuries or accidents whatsoever. The problem was actually detected by GM engineers test-driving this baby. Anyway, at issue here is the rear suspension tie rod which "controls the angle of the rear wheel and tire." It was not "properly heat-treated," GM announced. Sounds good to me. I know as much about cars as I do about hyperspeed warp engines. What I do here from some of the powers that be here at Fool HQ is that basically, if one thing leads to another your back wheels can pop up and your car can flip. So drive gingerly back to the dealership. (I suppose since we aim to be a responsible publisher I should mention that this is tongue-in-cheek, and that the likelihood of anything going wrong with these 1400 Corvettes is tiny. So relax, owners and shareholders.)

A brief anecdote to close tonight.

Watching the NCAA Tournament over the weekend, I came across a telling comment from CBS basketball analyst (and former star player) Clark Kellogg. Referring to the North Carolina Tar Heels, Kellogg said, "If they were a mutual fund, they'd be a balanced income fund with a high margin of safety."

Kellogg has always been my favorite anyway, but it's comments like these that further endear the fellow to me.

(Never mind that I'm an alumnus of the University of North Carolina -- that's not the point here.) (Never mind that a balanced income fund that beats the S&P 500 is a needle in a haystack, whereas Dean Smith has been crushing the market for a few decades.)

(Oh by the way, GO HEELS!)

We're in the business of taking the financial world and translating it for our audience into real-world terms, accomplishing that through analogies to literature, history, sports, pop culture, the works. We'll continue to do that; we'll always do that. It's in our blood, and we love it.

Kellogg curiously reversed the process with his comment. He took the world of sports and actually translated it over national television into financial world terms. How improbable is that? Well, if I were writing this article ten or more years ago, I can tell you that it would be very improbable. The presumption that the general public had sufficient interest in, or knowledge of, investing and personal finance would've been outrageous. (I can hear MF Pixy telling me over my shoulder that 50 years ago, Americans WERE taught in school about personal finance... that it's a historical oddity that the period in between then and now dispensed with such education. So there you go, DB, I've mentioned it!)

Anyway, these days a comment like Kellogg's is really not wildly improbable. It doesn't happen much, because most TV commentators in my experience are not sufficiently engaging thinkers to draw offbeat or original analogies. Kellogg is, though, and showed me one of two things: (1) he recognizes the importance of spreading financial education to the masses, or (2) the guy is logging into The Fool on a regular basis. No doubt both. (Hi, Clark.)

To summarize, we live in an incredible time. Financial education is spreading, to the vast benefit of our society. And Fools like Clark Kellogg are making it so.

--- David Gardner, March 24, 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.

TODAY'S NUMBERS 

Stock  Change    Bid
--------------------
AOL   +1 5/8   41.75
T     +  1/2   35.00
ATCT  -  1/4   6.88
CHV   +1 1/8   70.38
GM    +1       57.88
IOM   -  1/2   14.13
KLAC  -  1/4   36.38
LU    +  1/4   53.38
MMM   +1 1/2   88.63
COMS  -  1/4   32.75



    
  

      
   Day   Month    Year  History
        FOOL     +0.43%  -0.89%  -9.87% 140.55%
        S&P:     +0.87%   0.01%   6.77%  72.53%
        NASDAQ:  -0.91%  -5.07%  -3.75%  72.55%


     Rec'd   #  Security     In At       Now    Change
   8/5/94  680 AmOnline       7.27     41.75   474.05%
  5/17/95 2010 Iomega Cor     2.52     14.13   460.75%
  8/11/95  125 Chevron       50.28     70.38    39.95%
  8/12/96  110 Minn M&M      65.68     88.63    34.94%
  10/1/96   42 LucentTech    47.62     53.38    12.09%
  8/12/96  280 Gen'l Moto    51.97     57.88    11.36%
  8/12/96  130 AT&T          39.58     35.00   -11.57%
  8/24/95  130 KLA Instrm    44.71     36.38   -18.65%
  8/13/96  250 3Com Corp.    46.86     32.75   -30.11%
 10/22/96  600 ATC Comm.     22.94      6.88   -70.03%


     Rec'd   #  Security     In At     Value    Change
   8/5/94  680 AmOnline    4945.56  28390.00 $23444.44
  5/17/95 2010 Iomega Cor  5063.13  28391.25 $23328.12
  8/12/96  110 Minn M&M    7224.44   9748.75  $2524.31
  8/11/95  125 Chevron     6285.61   8796.88  $2511.27
  8/12/96  280 Gen'l Moto 14552.49  16205.00  $1652.51
  10/1/96   42 LucentTech  1999.88   2241.75   $241.87
  8/12/96  130 AT&T        5145.11   4550.00  -$595.11
  8/24/95  130 KLA Instrm  5812.49   4728.75 -$1083.74
  8/13/96  250 3Com Corp. 11714.99   8187.50 -$3527.49
 10/22/96  600 ATC Comm.  13761.50   4125.00 -$9636.50


                             CASH   $4909.01
                            TOTAL $120273.89