Fool Portfolio Report
Tuesday, February 24, 1998
by Jerry Thomas (TMFCheeze@aol.com)

SHERMAN OAKS, CA (Feb. 24, 1998) -- I finally took myself to see that Titanic movie the other night. Cold water, doomed romance, gunshots, mayhem, madness, desperation. Sounds like a day in the life of your average mutual fund manager.

Perhaps to conjure the image of the Titanic is not the best way to begin a Fool Port Recap, especially on a day like today, when one of our largest holdings made a new all-time intraday high. I'm speaking, of course, of Amazon.com (Nasdaq: AMZN). At one point in today's trading, Amazon was selling above $68 per share, but fell back to its close this afternoon at $64 7/8 on the bid. To hear the bears on our Amazon board in our message folders at www.fool.com, that's a sure sign the company has hit an iceberg today and is poised to sink to the bottom of the North Atlantic. The airtight chambers have been breached, water is pouring in, and Celine Dion is clearing her throat to sing a plaintive ballad as the grand ship up-ends and dives for Davy Jones' Locker.

The aptness of that image depends, of course, on whether you think Amazon.com is akin to a particular ship, Titanic, which sank on a cold night in April, 1912, or a particular movie, Titanic, directed by James Cameron, which is steaming full speed toward unparalleled box office success here in 1998. The film, unlike the boat, has proven unsinkable, and is still drawing over $20 million at the box office per week -- two and a half months after its open. In a few weeks it will pass Star Wars as the top-grossing film of all time. We are talking about a phenomenon that surpasses even E.T., and it is beginning to charge into Gone With the Wind territory. Amazing.

This is what you call dominance, a word Amazon advocates use to describe that company's hold on the Internet marketplace for retail book sales.

The bulls would tend to see Amazon as a juggernaut film, blasting through the record books, blowing away the critics and naysayers who said this piece of driftwood would never float. The bears, obviously, have the opposite image in mind, and see hundreds of passengers on this vessel diving for the lifeboats when the good ship decides to see what it's like to be a submarine. The images are starkly different, and investors will take their pick. I expect the truth, like most truths, is somewhere in the middle, with the company and the stock performing well over the very long term -- but we should not be surprised at some heavy storms and volatility along the way.

It all comes down to how successful one expects Amazon to be. As for me, I expect the company to hold the upper hand in book sales on the Internet for many years to come. They've nailed down the alliances and have claimed a market presence that will be very difficult for any competitor to overcome. However, translating that dominance into success as an investment is another matter altogether. After all, as David Forrest (aka TMF Bogey) pointed out in last night's recap, it's not terribly hard to make a case that Amazon already has a lot of success built into its current stock price. A correction from current levels is not out of the question. That does not mean, however, that the company will not be successful over the long term.

Little else to speak of is roiling the waters of the Fool Port this evening. Iomega (NYSE: IOM) was up strongly today after issuing a press release about its ongoing intellectual property disputes with Nomai S.A. in Europe. America Online (NYSE: AOL) retraced some of the gains it made in recent trading sessions. For the day the port was down 0.88%, losing to both the S&P 500 and the Nasdaq Composite averages by a fraction of a percent.

Finally, let me put in a good word for Kate Winslet's make-up artist. Whoever he was, he should win the Oscar for special effects. Over the course of this three-hour film, Kate weathered storms, gunfights, crashing waves, crushing ice, cold seas, hot passion, and hypothermia without so much as a smudge of that iron-clad lipstick. Those lips strode through the film like Arnold Schwarzenegger in full battle array. Had the White Star Cruise Line coated the hull of the ship with that lipstick, the Titanic would still be afloat.

Keep sailing, Fools.

Yours,

Cheeze

WE DELIVER - Get Fool Portfolio Nightly Reports
delivered straight to your e-mailbox every evening!

Today's FoolWatch: all the latest in Fooldom.


TODAY'S NUMBERS

Stock Change Bid ---------------- AMZN + 3/8 64.88 AOL -4 1/2 119.06 T - 3/4 62.00 DD - 11/16 58.69 DJT - 1/4 10.06 XON + 1/4 62.75 INVX - 15/16 22.56 IP - 1/2 47.00 IOM + 3/8 9.25 KLAC -1 29/32 42.56 LU + 1/4 108.00 COMS -1 32.63 TDFX + 3/8 22.56 SPY - 13/16 103.25
Day Month Year History FOOL -0.88% 8.57% 2.27% 243.22% S&P: -0.73% 5.13% 6.20% 124.82% NASDAQ: -0.74% 7.37% 10.72% 141.43% Rec'd # Security In At Now Change 8/5/94 355 AmOnline 7.27 119.06 1537.08% 5/17/95 1960 Iomega Cor 1.28 9.25 622.43% 10/1/96 42 LucentTech 47.62 108.00 126.81% 9/9/97 290 Amazon.com 38.22 64.88 69.73% 8/12/96 130 AT&T 39.58 62.00 56.65% 1/8/98 115 S&P Depos. 95.91 103.25 7.66% 2/20/98 270 Int'l Pape 47.69 47.00 -1.45% 2/20/98 215 DuPont 59.83 58.69 -1.92% 2/20/98 200 Exxon 64.09 62.75 -2.09% 8/24/95 130 KLA-Tencor 44.71 42.56 -4.81% 1/8/98 425 3Dfx 25.67 22.56 -12.10% 6/26/97 325 Innovex 27.71 22.56 -18.58% 4/30/97 -1170*Trump* 8.47 10.06 -18.82% 8/13/96 250 3Com Corp. 46.86 32.63 -30.38% Rec'd # Security In At Value Change 8/5/94 355 AmOnline 2581.87 42267.19 $39685.32 5/17/95 1960 Iomega Cor 2509.60 18130.00 $15620.40 9/9/97 290 Amazon.com 11084.24 18813.75 $7729.51 8/12/96 130 AT&T 5145.11 8060.00 $2914.89 10/1/96 42 LucentTech 1999.88 4536.00 $2536.12 2/20/98 270 Int'l Pape 12876.75 12690.00 -$186.75 2/20/98 215 DuPont 12864.25 12617.81 -$246.44 2/20/98 200 Exxon 12818.00 12550.00 -$268.00 8/24/95 130 KLA-Tencor 5812.49 5533.13 -$279.37 1/8/98 425 3Dfx 10908.63 9589.06 -$1319.56 6/26/97 325 Innovex 9005.62 7332.81 -$1672.81 4/30/97 -1170*Trump* -9908.50 -11773.13 -$1864.63 8/13/96 250 3Com Corp. 11715.99 8156.25 -$3559.74 1/8/98 115 S&P Depos. 11029.25 11873.75 $844.50 CASH $11233.54 TOTAL $171610.17