TDFX's Black Magic
Tuesday, March 17, 1998
by David Forrest ([email protected])
ALEXANDRIA, VA (March 17, 1998) -- The Fool Portfolio won the day today, edging out the S&P 500 by a small margin and beating up on the Nasdaq by 3/4 of 1%. Iomega (NYSE: IOM) bounced back a bit after yesterday's drubbing, climbing $1/4 to $7 3/8. The vultures continue to come out of the woodwork though. Iomega was named in another class-action lawsuit today. As an individual investor, I personally can't stand when a company is slapped with a frivolous lawsuit. It wastes shareholder money to defend, and all because investors lost money and don't like it. I hope this isn't another frivolous suit.
This class action lawsuit leads very nicely into a question I was asked in an interview yesterday. The reporter asked me if we at the Motley Fool feel responsible in any way for the gains or losses of stocks in the portfolio. My answer is an emphatic, "Of course not." The knee-jerk reaction of the "Wise" is to always look for someone other than themselves to blame for ill fortune.
The fact of the matter is, nobody should ever buy any stock based on someone else's recommendation alone. If you buy a stock without doing your own due diligence and you lose money, it's your own fault. Don't blame someone else. If you're not willing to do the work required to make a decent decision about a stock, you should just keep your money in an index fund. It's all about taking personal responsibility for your actions and not looking for someone else to blame. So, to those of you who do your own homework, make your own decisions and live with the results -- be they good or bad, I tip me derby to ya. If you don't agree with me about this, drop by my message board "Bogey's Bungalow" and sound off.
In other Portfolio news today, 3Dfx (Nasdaq: TDFX) accelerated higher by $2 1/16 to close at $28 5/8. The rise can be attributed to a touch of Black Magic. No, we're not consulting witches and warlocks in the Fool Portfolio these days (we stopped doing that back in May of '96). But, a spell may have been cast on 3Dfx shares by STB Systems (Nasdaq: STBI). The two companies announced a licensing agreement last night where STB would use 3Dfx's Voodoo2 technology in a new, high-performance 3D accelerator card named "Black Magic 3D." This had been anticipated, but apparently shareholders liked the news, propelling 3Dfx to new highs.
In the past I've written about my rule that I never average down. What I prefer to do is wait for positive announcements on a stock and average up. Is this agreement with STB Systems a reason to average up? I don't know, and I'm not telling people to average up here. It certainly requires much more thought, as well as a call or two to the company to see how it might impact revenue, but the announcement is positive news. I think you'll find that there's a pretty strong correlation between a company reporting good news and its stock price rising. It's also a lot more fun to add to your holdings in a stock that's doing well versus one that's doing poorly.
Happy St, Patrick's Day!
David
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TODAY'S
NUMBERS
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Day Month Year History FOOL +0.17% 2.26% 8.33% 263.57% S&P: +0.11% 2.96% 11.34% 135.70% NASDAQ: -0.50% 0.50% 13.31% 147.06% Rec'd # Security In At Now Change 8/5/94 710 AmOnline 3.64 64.00 1659.96% 5/17/95 1960 Iomega Cor 1.28 7.38 475.99% 10/1/96 42 LucentTech 47.62 119.69 151.36% 9/9/97 290 Amazon.com 38.22 79.63 108.33% 8/12/96 130 AT&T 39.58 65.63 65.81% 1/8/98 115 S&P Depos. 95.91 108.56 13.20% 1/8/98 425 3Dfx 25.67 28.69 11.77% 2/20/98 215 DuPont 59.83 65.94 10.20% 2/20/98 270 Int'l Pape 47.69 51.75 8.51% 2/20/98 200 Exxon 64.09 62.88 -1.90% 4/30/97 -1170*Trump* 8.47 9.94 -17.34% 8/24/95 130 KLA-Tencor 44.71 36.19 -19.06% 6/26/97 325 Innovex 27.71 21.63 -21.96% 8/13/96 250 3Com Corp. 46.86 34.00 -27.45% Rec'd # Security In At Value Change 8/5/94 710 AmOnline 2581.87 45440.00 $42858.13 9/9/97 290 Amazon.com 11084.24 23091.25 $12007.01 5/17/95 1960 Iomega Cor 2509.60 14455.00 $11945.40 8/12/96 130 AT&T 5145.11 8531.25 $3386.14 10/1/96 42 LucentTech 1999.88 5026.88 $3027.00 1/8/98 115 S&P Depos. 11029.25 12484.69 $1455.44 2/20/98 215 DuPont 12864.25 14176.56 $1312.31 1/8/98 425 3Dfx 10908.63 12192.19 $1283.56 2/20/98 270 Int'l Pape 12876.75 13972.50 $1095.75 2/20/98 200 Exxon 12818.00 12575.00 -$243.00 8/24/95 130 KLA-Tencor 5812.49 4704.38 -$1108.12 4/30/97 -1170*Trump* -9908.50 -11626.88 -$1718.38 6/26/97 325 Innovex 9005.62 7028.13 -$1977.50 8/13/96 250 3Com Corp. 11715.99 8500.00 -$3215.99 CASH $11233.54 TOTAL $181784.48
