Fool
Portfolio Report
Monday, November 24, 1997
by David Gardner
([email protected])
ALEXANDRIA, VA (Nov. 24, 1997) -- The market got whacked Monday, giving away 2 percentage points of its 1997 gains. That was bad, but the Fool was badder: The Fool Portfolio surrendered 3 percentage points. Is this market volatile or what? We're still sitting about 15% in cash and the Foolfolio's been a Mexican jumping bean over the past couple of months.
All Fool stocks were down, without exception. That hurts us 11 times out of 12, with only The Donald's decline helping. (That short position currently shows a 1.84% loss, nearer than it's been in months to turning profitable....)
Little news came across the wires on any of our companies today, with the only material announcements coming from Iomega and General Motors.
Iomega (NYSE:IOM) announced it had obtained a temporary restraining order from a U.S. District Court against Nomai, a potential competitor hoping to copy Zip disks and distribute them at much cheaper prices. That "copy" aspect is what has Iomega launching its legal attack, protecting its patents, and at this point anyway the company remains unscathed. Iomega's testing showed that 25 percent of randomly selected Nomai cartridges were "inoperable" with internal Zip drives, which pretty much account for a quarter of all Zip drives (10 million+) shipped to date.
I personally discount the whole Nomai competitive story, anyway, just because I don't believe this small foreign company would be able to produce the disks in sufficient quantities to really compete. I don't think any of this mattered much to the market, which dropped Iomega a buck-plus anyway, today.
General Motors' (NYSE: GM) Chevy Corvette won the Motor Trend 1998 Car of the Year. GM's press release stated, "The legendary topless sports car adds more than $1,300 worth of premium standard equipment, yet is priced $635 less than the 1996 convertible, the most recent year that the convertible version was offered." Coming in at a cool $38K for the coupe version, the thing ain't cheap. Anyway, GM down $1 too. That sort of day.
Before going on a bit about another financial subject near and dear to our hearts BESIDES stocks, I do want to comment on a Microsoft press release today entitled, very simply, "Leading Industry Vendors Join Microsoft in Announcing Support for Creation Of Open 'Buddy List' Protocol Standard." Nowhere does the release acknowledge America Online's (NYSE: AOL) existing buddy list and Instant Messenger technology, already being used by millions of people, which I as a shareholder found kinda humorous. You have this one fellow stating in the release, "Imagine how powerful it would be if you could find out if someone was there before trying to call them, or learn that a family member across the country just logged on and be able to immediately say 'hi' and strike up a conversation."
Um, hello out there?! As I've been doing using AOL for more than a year now, or using Instant Messenger (Internet-based) for months? Geez.
In other Foolish news, we're VERY pleased to announce the debut of our brand new Web message boards. For the past five months, we've worked furiously to provide our fellow Fools with the best message-board technology in existence today. Let us know whether we've succeeded, or where we might continue to improve. The new just-launched features include: unbelievably speedy response, colorful and easy navigation, Foolish personal profiles (this is my own favorite feature), sort as threaded or non-threaded, and a bunch of other improvements. And in celebration, Tom and I are posting all over the place over there. Come join us.
The Motley Fool has focused a great deal of its attention on the stock market, but it's with the more basic issues of personal finance that our second book will lead off. Because while we believe the stock market is THE place to be over the long term, over the short term a lot of people need to clean off their financial plates before eating the main course. A fellow Fool recently posted this to our Web boards:
"My girlfriend gets a $3000 check in the mail from Fleet Bank with a letter saying, 'Just cash this, and it's all yours to spend at ONLY 16.9%, because you are so valued.' She doesn't even bank with Fleet, makes about $28,000 annually, and has over $30,000 in school loans! Literally just shows up in the mail! The world doesn't need the Fed to carry out a loosey-goosey monetary policy at all; it has Fleet Bank."
So true, isn't it? Of course, this isn't about Fleet Bank because virtually all banks and credit-card companies play the same games, enticing people with "get-rich-sounding" marketing ploys and then confusing them and whacking them senseless with high interest rates.
The beauty of Fooldom and message-board conversation is the opportunity to expose practices like this in a group environment, educate each other, and learn to make better decisions going forward. Outstanding Fool contributor WadaPhooliam had this to say, in response to the above:
"From Fleet's micro-perspective, getting 16.9% in a 3% inflation environment makes sense. Hell, I might be willing to loan your girlfriend money at that rate assuming she passed a credit check. On the other hand, you and your girlfriend are probably astute enough not to fall into that trap. It ain't just Fleet Bank. My wife and I get all kinds of offers to loan us large ($20,000+) amounts of money. They go through the shredder and into the recycling bin. We like cash and hate debt."
Through continuing to read, discuss, and learn, we can all learn to LIKE CASH and HATE DEBT. It's this perspective that is so important and necessary to have, prior to full investment in the stock market. Very, very "Phoolish."
-- David Gardner, November 24, 1997
Today's FoolWatch: all the latest in Fooldom.
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TODAY'S
NUMBERS
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Day Month Year History FOOL -2.90% -2.05% 21.55% 224.39% S&P: -1.71% 3.50% 27.80% 106.52% NASDAQ: -2.08% -0.41% 22.92% 120.36% Rec'd # Security In At Now Change 5/17/95 980 Iomega Cor 2.52 30.50 1110.32% 8/5/94 355 AmOnline 7.27 72.13 891.70% 10/1/96 42 LucentTech 47.62 79.25 66.43% 8/11/95 125 Chevron 50.28 82.88 64.81% 8/12/96 110 Minn M&M 65.68 95.69 45.69% 8/12/96 130 AT&T 39.58 54.19 36.91% 9/9/97 290 Amazon.com 38.22 50.75 32.78% 8/12/96 280 Gen'l Moto 51.97 61.06 17.49% 4/30/97 -1170 *Trump* 8.47 8.63 -1.84% 8/24/95 130 KLA-Tencor 44.71 40.69 -9.00% 6/26/97 325 Innovex 27.71 23.44 -15.42% 8/13/96 250 3Com Corp. 46.86 33.50 -28.51% Rec'd # Security In At Value Change 5/17/95 980 Iomega Cor 2509.60 29890.00 $27380.40 8/5/94 355 AmOnline 2581.87 25604.38 $23022.51 8/11/95 125 Chevron 6285.61 10359.38 $4073.77 9/9/97 290 Amazon.com 11084.24 14717.50 $3633.26 8/12/96 110 Minn M&M 7224.44 10525.63 $3301.19 8/12/96 280 Gen'l Moto 14552.49 17097.50 $2545.01 8/12/96 130 AT&T 5145.11 7044.38 $1899.27 10/1/96 42 LucentTech 1999.88 3328.50 $1328.62 4/30/97 -1170*Trump* -9908.50 -10091.25 -$182.75 8/24/95 130 KLA-Tencor 5812.49 5289.38 -$523.12 6/26/97 325 Innovex 9005.62 7617.19 -$1388.43 8/13/96 250 3Com Corp. 11714.99 8375.00 -$3339.99 CASH $32438.81 TOTAL $162196.37
