Fool Portfolio Report
Friday, February 13, 1998
by Paul Larson (TMFParlay@aol.com)

CHICAGO, IL (Feb. 13, 1998) -- It's Friday the thirteenth and the Fool port had quite an unlucky day today. While the Nasdaq and S&P 500 dropped 0.23% and 0.40% on the day, the Fool Port dropped 1.13%. Wait, the Fool Port dropped one and THIRTEEN hundredths on Friday the thirteenth? Yikes! Freaky! What does it mean? What's the significance!

I'm just joking here. I'm not the least bit superstitious and I don't think that many other Fool staffers are either (except maybe in the Drip Port). After all, I live with a black cat.

On the week the portfolio did quite nicely by rising 3.72% versus lower than one percentage point moves north in the major indexes. This is thanks to America Online (NYSE: AOL) which was absolutely smokin' earlier this week as the company released earnings.

Iomega (NYSE: IOM) announced today that the company was significantly cutting prices on its Jaz product line. The one-gigabyte removable drives are now going to sell for $299 instead of $399 for an external unit. This is undoubtedly a result of increased competition from the once-mighty Syquest (Nasdaq: SYQT). Syquest, for those who don't know, is the company that Iomega basically buried with the Zip drive. However, Syquest is somehow still breathing and the company is selling its new SparQ drives at ridiculously low prices ($199 for a 1 gig drive), and this has got to be a thorn in Iomega's side. Never mind that Syquest is selling the drives at negative gross margins; this is a suicide mission that will still hurt Iomega.

Dale wrote yesterday that he personally didn't understand Iomega any longer. Count me in on the confused side of the equation also. I too ponder why the heck Iomega is spending so much moola on marketing and why the company split the stock at such a low level. Anyhow, be sure to check into our new feature, Dueling Fools, in two weeks when there will be a no-holds-barred duel over Iomega.

While talking about Dueling Fools, did you read this week's duel over Fool Portfolio holding Amazon.com (Nasdaq: AMZN)? If you're even remotely interested in the company, I think it's worth a read. One of the reasons I love Dueling Fools so much is that it gives people a chance to read *both* sides of a story. If you can read the other side of an argument, either bull or bear, and still form a solid opinion on a company, you will be that much better off. In other words, I think it's great from a "know thine enemy" standpoint.

(Jeff, start the theme music.)

Welcome to FOOL FOUR WATCH '98!

We are officially on "Fool Four Watch, '98" this coming week. That's right, next week the portfolio will be switching from its current holdings of Dow heavies Chevron (NYSE: CHV), General Motors (NYSE: GM), Ma Bell (NYSE: T), and Trois-M (NYSE: MMM) to a new foursome. All you day-traders who dream about front-running the Fool, here's your chance. Go out and short Chevron because we'll be selling the stock barring any earth shattering moves in the Dow. Although, manipulating a stock with a $50 billion market cap might be a little tough!

What will the new Fool Four stocks be? Your guess is as good as mine. What we'll be doing next week is taking the top-ten yielding stocks on the Dow and then ranking those ten in order from the lowest priced to the highest priced. We'll then be making four equal purchases of those ranked two through five. Those familiar with the method know that this portfolio has elected to go with the "UV4" method instead of the "old" Fool Four method. The new method stops the doubling-up of the top pick and also provides a provision for possibly not throwing out the absolute lowest priced stock of the bunch.

Confused? Stop by the Fool Four area to get all your frequently asked questions answered.

Let's take a look at the price rankings of the current top 10 yielding Dow stocks just to see exactly how close a horse race this is. If the switch were being done on Tuesday (the market is closed Monday), the companies with asterisks would be the new Foolish Four:

1) Philip Morris (NYSE: MO) 41 7/8
2) International Paper (NYSE: IP) 48 1/16 ***
3) DuPont (NYSE: DD) 61 3/4 ***
4) Exxon (NYSE: XON) 63 1/8 ***
5) AT&T (NYSE: T) 63 3/16 ***
6) General Motors (NYSE: GM) 63 1/2
7) Eastman Kodak (NYSE: EK) 66 11/16

A rather close race if I do say so myself. The difference between being in the new Fool Four or just being another ole Dow stock is less than a half point. And the drama doesn't stop there, folks! There are a handful of stocks knocking on the door of our first dividend-yield screen. Here's how the edge of that initial filter looks:

8) International Paper (NYSE: IP) 2.1%
9) AT&T (NYSE: T) 2.1%
10) Dupont (NYSE: DD) 2.0%

----------------------------------------------------

11) Caterpillar (NYSE: CAT) 1.9% 53 1/2
12) Union Carbide (NYSE: UK) 1.8% 47 3/16
13) Goodyear (NYSE: GT) 1.7% 68 5/16
14) Da Sears (NYSE: S) 1.7% 54 3/16

You'll notice that many of those knocking on the top-yielding door will also be among the lowest priced and be included on the Fool Four if they get in. The possibilities of what can happen in the next couple trading days are almost limitless. Will General Motors continue its appearance in the portfolio? Will International Paper get beaten out at the last moment by Caterpillar for the top slot in the Fool Four rankings? Tune in next week as FOOL FOUR WATCH '98 coverage continues!

Have a lovely weekend, everyone!

--Paul Larson (TMF Parlay)

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TODAY'S NUMBERS

Stock Change Bid ---------------- AMZN - 5/8 62.25 AOL -2 5/8 114.13 T + 3/8 63.25 CHV + 7/8 78.00 DJT - 1/8 10.81 GM + 3/16 63.44 INVX - 1/4 24.13 IOM - 1/2 9.06 KLAC + 1/4 44.88 LU - 5/16 94.13 MMM - 9/16 88.13 RTN.A - 5/8 53.25 COMS - 1/2 34.63 TDFX + 5/16 23.25 SPY - 9/16 102.00
Day Month Year History FOOL -1.13% 7.03% 0.81% 238.33% S&P: -0.40% 4.06% 5.12% 122.53% NASDAQ: -0.23% 5.62% 8.92% 137.50% Rec'd # Security In At Now Change 8/5/94 355 AmOnline 7.27 114.13 1469.19% 5/17/95 1960 Iomega Cor 1.28 9.06 607.78% 10/1/96 42 LucentTech 47.62 94.13 97.67% 9/9/97 290 Amazon.com 38.22 62.25 62.87% 8/12/96 130 AT&T 39.58 63.25 59.81% 8/11/95 125 Chevron 50.28 78.00 55.12% 8/12/96 110 Minn M&M 65.68 88.13 34.18% 8/12/96 280 Gen'l Moto 48.74 63.44 30.15% 1/8/98 115 S&P Depos. 95.91 102.00 6.35% 8/24/95 130 KLA-Tencor 44.71 44.88 0.37% 12/19/97 17 Raytheon 53.21 53.25 0.08% 1/8/98 425 3Dfx 25.67 23.25 -9.42% 6/26/97 325 Innovex 27.71 24.13 -12.94% 8/13/96 250 3Com Corp. 46.86 34.63 -26.12% 4/30/97 -1170 *Trump* 8.47 10.81 -27.67% Rec'd # Security In At Value Change 8/5/94 355 AmOnline 2581.87 40514.38 $37932.51 5/17/95 1960 Iomega Cor 2509.60 17762.50 $15252.90 9/9/97 290 Amazon.com 11084.24 18052.50 $6968.26 8/12/96 280 Gen'l Moto 13647.92 17762.50 $4114.58 8/11/95 125 Chevron 6285.61 9750.00 $3464.39 8/12/96 130 AT&T 5145.11 8222.50 $3077.39 8/12/96 110 Minn M&M 7224.44 9693.75 $2469.31 10/1/96 42 LucentTech 1999.88 3953.25 $1953.37 1/8/98 115 S&P Depos. 11029.25 11730.00 $700.75 8/24/95 130 KLA-Tencor 5812.49 5833.75 $21.26 12/19/97 17 Raytheon 904.57 905.25 $0.68 1/8/98 425 3Dfx 10908.63 9881.25 -$1027.38 6/26/97 325 Innovex 9005.62 7840.63 -$1165.00 4/30/97 -1170*Trump* -9908.50 -12650.63 -$2742.13 8/13/96 250 3Com Corp. 11715.99 8656.25 -$3059.74 CASH $11259.61 TOTAL $169167.49