Trash-Talk
Thursday, March 26, 1998
by David Gardner (DavidG@fool.com)

ALEXANDRIA, VA (March 26, 1998) -- It was a rather drowsy day for the Fool Port and the market, as our portfolio and the two indices with which it competes all budged less than a quarter of a percent. Only one Fool stock moved a dollar or more, that being 3Com (up $1 3/16), which retraced some of its losses following a disappointing earnings release earlier this week.

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Now let's change gears to our subject o' the day.

So OK, I admit it. I love trash-talk. And I suspect I'm not alone in this inclination.

It still being March, one of course expects most of the trash-talking to be done on NCAA hoops courts, which feature the single-elimination tournament that is the greatest event in American sports. (This so-called "March Madness" is of course not meant -- or is it? -- to be confused with Stock Madness, the Foolish game in which I scored 14 points after the first round -- tying me in 10th place with a bunch of other Fools. Hope you're doing better!)

My own college's basketball team has been accused of doing some serious trash-talking en route toward its 34 victories (and Final Four berth) this season. I think these accusations are mostly on-target, though I don't take them too seriously. Again, I like the stuff. I'm almost always galvanized when our starting shooting guard sticks a three-point shot in a guy's face and jabbers at him all the way down the court. I love it, and the cameras do too. They're all over this scene, documenting the incident from multiple angles.

Human nature appears to like a good trash-talk.

Turning outside the sports world, we encounter quality "trash" far less frequently. Perhaps the most dependable place I can still locate it -- outside of the morning talk shows that I should probably watch but don't -- is Nightline. That was the first live network program on which I ever heard someone say ORDURE using its better-known four-letter variant. Now that was amusing. (For the record, Ted Koppel immediately dropped that woman off the telecast.)

Now look at the business world, whose overall competitiveness dwarfs both the sports and TV ratings worlds put together. And yet we have to search very hard to find any real trash-talk at all! Oh sure, competitors will sometimes talk down each other's products. But true trash-talk? I don't think so. I don't see it getting real personal out there, as it always does when m'man Vince Carter, the North Carolina Tar Heels' star forward, jams the ball down through the hoop backwards while screaming in the face of the guy who's hacking him. No, no. If there's one thing I've learned on this planet in the 31 years vouchsafed me so far, it's that unathletic, untelegenic older executives in expensive suits tend not to get up in each other's faces about much, if anything.

But in the Fool Portfolio, you actually do have a few stocks that engage in, or are victims of, trash-talk. It enhances the entertainment value! Case in point, this memorable press release from May of 1997, issued by competitor Mirage Resorts reacting to Trump Hotels & Casino Resorts (NYSE: DJT). Here comes one of the more humorous statements I've ever seen printed by a public company over Business Wire:

"For [Trump's] inexcusable and inappropriate conduct, there will most definitely be a day of reckoning. The conduct of Trump... threatens the welfare of the shareholders and the employees of the company. Mirage Resorts sympathizes with them (and believes) that the men chosen to lead the company have no understanding of their responsibilities or the rules of proper conduct."

Ouch! (For the record, Donald's stock is down slightly from that day, while Mirage is up slightly.)

Recently, a new entrant to the Fool Port has begun sharpening its rapier, none other than upstart 3Dfx (Nasdaq: TDFX). Faced with a product announcement from rival Nvidia -- a product that claims to exceed 3Dfx's new Voodoo 2 card -- ZDNet did a short piece well worth reading by any shareholder. You'll see there the following quotation from Andy Keane, VP of marketing for our boys in San Jose -- it's listed under the subheading "'No Product,' says 3Dfx":

"There is no product at this point, and it's strange that the announcement [of a product not due until autumn] comes right before their IPO."

Oooooooooo.

"There is a big difference between a design and a product," he continued.

Oooooooooo.

Not only do I appreciate this trash-talk, but I also understand it. 3Dfx is the technology leader in its field, but is frequently having to face competitive threats in the form of press releases by other companies claiming that their product (always due out in the future, of course) is better, stronger, faster (fill in your comparative adjective).

Meanwhile, TDFX continues to win the hearts of gamers and game developers -- the two entities that count for the most in the entertainment software world. And we're quite happy that even though we had to pay up $5 for the stock after YOU GUYS bought it on our announcement, we still show a pretty little profit in advance of what I expect to be a blowout mid-April earnings release. We shall see, dear Fools!

Yep, it's getting near earnings season once again, when companies have to put up or shut up. Here's to our companies getting to put up. It's no fun to be on the other end of the market's trash-talk. Fool on!

-- David Gardner, March 26, 1998

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TODAY'S NUMBERS

Stock Change Bid ---------------- AMZN + 15/16 82.63 AOL - 1/16 66.88 T - 5/8 67.38 DD - 1/16 69.00 DJT + 1/16 9.50 XON + 7/16 68.19 INVX + 3/4 24.25 IP - 5/16 48.75 IOM - 1/8 6.88 KLAC + 3/16 38.63 LU + 13/16 125.13 COMS +1 3/16 36.69 TDFX - 1/8 27.44 SPY - 1/16 110.09
Day Month Year History FOOL +0.19% 5.24% 11.49% 274.16% S&P: -0.10% 4.90% 13.43% 140.14% NASDAQ: +0.22% 3.28% 16.44% 153.90% Rec'd # Security In At Now Change 8/5/94 710 AmOnline 3.64 66.88 1739.03% 5/17/95 1960 Iomega Cor 1.28 6.88 436.94% 10/1/96 42 LucentTech 47.62 125.13 162.78% 9/9/97 290 Amazon.com 38.22 82.63 116.17% 8/12/96 130 AT&T 39.58 67.38 70.23% 2/20/98 215 DuPont 59.83 69.00 15.32% 1/8/98 115 S&P Depos. 95.91 110.09 14.79% 1/8/98 425 3Dfx 25.67 27.44 6.90% 2/20/98 200 Exxon 64.09 68.19 6.39% 2/20/98 270 Int'l Pape 47.69 48.75 2.22% 4/30/97 -1170*Trump* 8.47 9.50 -12.18% 6/26/97 325 Innovex 27.71 24.25 -12.49% 8/24/95 130 KLA-Tencor 44.71 38.63 -13.61% 8/13/96 250 3Com Corp. 46.86 36.69 -21.71% Rec'd # Security In At Value Change 8/5/94 710 AmOnline 2581.87 47481.25 $44899.38 9/9/97 290 Amazon.com 11084.24 23961.25 $12877.01 5/17/95 1960 Iomega Cor 2509.60 13475.00 $10965.40 8/12/96 130 AT&T 5145.11 8758.75 $3613.64 10/1/96 42 LucentTech 1999.88 5255.25 $3255.37 2/20/98 215 DuPont 12864.25 14835.00 $1970.75 1/8/98 115 S&P Depos. 11029.25 12660.78 $1631.53 2/20/98 200 Exxon 12818.00 13637.50 $819.50 1/8/98 425 3Dfx 10908.63 11660.94 $752.31 2/20/98 270 Int'l Pape 12876.75 13162.50 $285.75 8/24/95 130 KLA-Tencor 5812.49 5021.25 -$791.24 6/26/97 325 Innovex 9005.62 7881.25 -$1124.37 4/30/97 -1170*Trump* -9908.50 -11115.00 -$1206.50 8/13/96 250 3Com Corp. 11715.99 9171.88 -$2544.12 CASH $11233.54 TOTAL $187081.13

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