Thoreau's Lesson
Thursday, May 14, 1998
by David Gardner
([email protected])
ALEXANDRIA, VA (May 14, 1998) -- The Fool Portfolio dropped a percentage point today in a flat market. Look over the numbers today:
FOOL: -1.19% S&P: -0.13% NAZ: -0.04%... and you see a near mirror image of yesterday.
FOOL: +1.09% S&P: +0.27% NAZ: +0.32%When you iron out the kinks, it's pretty much flat all 'round. So why did the market even bother trading, eh?
In fact, you look it over and it was the stocks that led us yesterday (Amazon.com, America Online, and DuPont) that were the very ones that went the wrong way today. Oh well, back to the drawing board.
Internet stocks did not move higher, despite the news that the House of Representatives unanimously approved a three-year ban on new taxes that would discourage greater use of the Internet. Of course, the stocks did rise when this legislation was first proposed, so today's movements may be best described as "buy on the rumor, sell on the news"....
I was reading a little Thoreau yesterday, when I happened upon an excellent quotation, most applicable to what we're trying to achieve here at The Motley Fool. On page 71 of Walden (great book!), H. David wrote:
"I would not have any one adopt my mode of living on any account; for, beside that before he has fairly learned it I may have found out another for myself, I desire that there may be as many different persons in the world as possible; but I would have each one be very careful to find out and pursue his own way, and not his father's or his mother's or his neighbor's instead."
The application of it will already be clear to our regular readers, but let me spell this quotation out for anyone who's just signing on to the Fool today for the first time. It is this: The Motley Fool Portfolio exists as a teaching tool to help readers learn investing. The whole point of www.fool.com is to help you make your own investment decisions; the Fool Portfolio is here to show you what we are doing with our money. But "I woud not have any one adopt my mode of investing on any account." My favorite e-mails are the ones from readers who say, "I don't own any of your stocks, but following your portfolio gave me the confidence to invest on my own, and I've gone out and begun with three other stocks that fit who I am and what I know, and they've done very well for me."
Perfect start! That's Foolish. Less Foolish is the mimicking of our portfolio in bits and pieces. I suppose I never mind hearing that someone owns a few of the stocks that are here in this portfolio. What I don't like to hear so much is that someone buys ALL the stocks in our portfolio, and jumps on board the morning after any new buy or sell move. That is unFoolish. Yes, had you followed this approach since the debut of our service three and a half years ago, you'd probably not be complaining very much. That said, what have you learned? The danger there is that the only thing you've learned is: "Follow the Fools." If that's true of you, you've missed the whole point of our efforts.
You see, we don't manage anyone else's money but our own. In fact, no one here at Fool HQ manages anyone's outside money -- no hedge funds hiding behind our online content. Now, in my own family portfolio I own AOL, but I do not own Amazon.com (darn it!) or 3Com (phew!). I do believe in all these companies, and in fact, I care far more about the performance of the Fool Portfolio than my own family portfolio! (That's because so many people give so much attention to the performance of this portfolio that it affects me emotionally far more -- not that I would let raw emotion motivate my decisions.) The Fool Portfolio is of course our own real money, so I do own Amazon -- the 290 shares you see here. But nothing beyond that.
Do you own Amazon? If so, why do you own Amazon?
I could be asking the same thing about any stock... any stock in your portfolio. Is there any stock in your portfolio that you don't really understand, or don't really know why you own (tip from a friend, broker put you in it, etc.)? If so, you're extremely vulnerable... you should take to heart my suggestion that if YOU aren't the one behind every decision made in your portfolio, that you should either swap out what you don't know, or turn the money over to someone else to manage.
You see, "I would have each one be very careful to find out and pursue his own way, and not his father's or his mother's or his neighbor's instead."
Thoreau was a Fool.
Now let's close today with one of those rare occurrences here in The Fool Portfolio: a movie plug! Friday, May 15 is the debut of Warner Brothers' first-ever animated film Quest for Camelot. I have not seen the movie, but I'm going to go see it this weekend, and here's why: a fellow dyed-in-the-wool, in-the-online-area-every-day Fool has composed all the music for it!
That's right, ever since the beautiful and accomplished Oscar-award-winning songwriter Carole Bayer Sager first attended an LA booksigning of ours a few years ago, we've traded e-mails and even crossed paths a few times. Carole is a serious investor, which of course means: (1) she makes her own moves and (2) has a lot of fun doing it. (Please note that in Fooldom, "serious" is always synonymous with "fun.") In between buying and holding AOL, or trying to figure out what to do with her Ascend, Carole has been working for the past three years toward the completion of all the music for this movie, whose first single released will be "Looking Thru Your Eyes," sung by LeAnn Rimes. In her storied career, Carole has collaborated with everyone from Bob Dylan to Frank Sinatra, from Aretha Franklin to Dolly Parton. And of course... Michael Jackson (hey, you gotta work with Mike). She won the Academy Award for "Arthur's Theme" from the movie Arthur, and has gotten several other nominations, including "Nobody Does It Better" (remember that, from the Bond flick)? And that's only movies... that's not counting Grammies, Tonies, and #1 Billboard hits.
Tom and I are just two of Carole's 15,324 friends, but if the 15,322 others all plug the flick on the Internet in the next coupla days, I believe we can -- together -- blow this film past Titanic. Let's all try to do it! Let's sink the Titanic!
Fool on, everyone. (Fool on, Carole.)
-- David Gardner, May 14, 1998
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Day Month Year History FOOL -1.19% 2.19% 24.20% 316.82% S&P: -0.13% 0.50% 15.14% 143.75% NASDAQ: -0.04% -0.16% 18.79% 159.02% Rec'd # Security In At Now Change 8/5/94 710 AmOnline 3.64 87.75 2313.08% 5/17/95 1960 Iomega Cor 1.28 7.50 485.75% 10/1/96 84 LucentTech 23.81 71.31 199.53% 9/9/97 290 Amazon.com 38.22 91.56 139.56% 8/12/96 130 AT&T 39.58 57.44 45.13% 2/20/98 215 DuPont 59.83 81.69 36.52% 1/8/98 115 S&P Depos. 95.91 111.66 16.42% 2/20/98 270 Int'l Pape 47.69 55.00 15.32% 2/20/98 200 Exxon 64.09 73.75 15.07% 4/30/97 -1170*Trump* 8.47 8.81 -4.06% 1/8/98 425 3Dfx 25.67 23.63 -7.96% 8/24/95 130 KLA-Tencor 44.71 39.94 -10.68% 6/26/97 325 Innovex 27.71 22.63 -18.35% 8/13/96 250 3Com Corp. 46.86 30.25 -35.45% Rec'd # Security In At Value Change 8/5/94 710 AmOnline 2581.87 62302.50 $59720.63 9/9/97 290 Amazon.com 11084.24 26553.13 $15468.89 5/17/95 1960 Iomega Cor 2509.60 14700.00 $12190.40 2/20/98 215 DuPont 12864.25 17562.81 $4698.56 10/1/96 84 LucentTech 1999.88 5990.25 $3990.37 8/12/96 130 AT&T 5145.11 7466.88 $2321.77 2/20/98 270 Int'l Pape 12876.75 14850.00 $1973.25 2/20/98 200 Exxon 12818.00 14750.00 $1932.00 1/8/98 115 S&P Depos. 11029.25 12840.47 $1811.22 4/30/97 -1170*Trump* -9908.50 -10310.63 -$402.13 8/24/95 130 KLA-Tencor 5812.49 5191.88 -$620.62 1/8/98 425 3Dfx 10908.63 10040.63 -$868.00 6/26/97 325 Innovex 9005.62 7353.13 -$1652.50 8/13/96 250 3Com Corp. 11715.99 7562.50 -$4153.49 CASH $11558.06 TOTAL $208411.59
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