The Beginning Pianist
Plus, gander at
the stock of the decade
by David Gardner
(DavidG@fool.com)

ALEXANDRIA, VA (June 22, 1998) -- Is this repetitive? Is it getting boring? Is too much of a good thing... a good thing?

The Fool Portfolio once again crushed the market today, throwing up another three-spot (3.04%, to be exact) versus gains of 0.23% and 1.38% for the S&P 500 and Nasdaq, respectively. Both AOL and Amazon gained blah blah blah blah.

Yeah, another five bucks each.

Blah blah blah.

And it must be mentioned as well that our recent dogs also acted similarly doggishly, with Innovex losing yet another $1 and 3Com saying sayonara to another $3/4 (or another $252 million of market capitalization). Blah blah blah.

Boy, when those institutional managers play themes, they don't play around do they? Like the beginning piano student, they keep going back over the leitmotif line, over and over, till that part of the song is better known by far than any of the passages which surround it. The leitmotif of this market is "Internet," and one of the ignored passages is "computer hardware." Our Four Dogs (Cani Quattuori, we could call them) -- 3Com, 3Dfx, Innovex, and KLA-Tencor... our four worst performers -- continue to howl. They are indeed the Four Dogs of Doom (Cani Quattuori Fatum -- I know, that doesn't work -- I never did take Latin).

But now take a look at America Online's chart, vs. the S&P 500, since coming public in the spring of 1992. Isn't that hysterical? The little green S&P 500 line registers nary an uptick, even though that six-year period has been the best one of this century. Meanwhile, the America Online line skyrockets up approximately 92 times... probably the stock of the decade. What is particularly amusing to those of us who've simply bought and held the stock all the way through is all the naysaying that's gone on, all the flame articles from the financial press, and the simple lack of understanding among so many "professionals" that companies which create consumer brand names in the technology field make great investments.

Which no doubt explains a fair amount of Amazon.com's 325% gain since our purchase in September, as well.

I was musing with Jeff earlier today that maybe we've reached a market top for the year, based on nothing other than that neither he nor I is even particularly excited that we were up another 3% today. For anyone who's been following the Portfolio this year, this is just the latest in a long string of easy wins. Is winning easy? Not always -- not often. Not this easy, I don't think. That said, winning is a lot easier when you simply buy and hold good companies, as outlined in our Motley Fool books -- both ours and the ones (like the one on that main screen right now) that we preview and include in our store for purchase.

What's the hardest way to make money? Trade in and out, follow your stocks minute to minute, use "technical indicators," and get worried about where the market's headed. Those are sure signs of "tough money," money that -- even when you make it -- takes its own toll on the quality of the rest of your life.

Speaking of quality of life, I type my recap tonight in suit and tie. Yep, it's our first-ever (and probably annual or semi-annual) "Dress-Up Day" here at Fool HQ. The rest of the days of the year, one can come to work here at Fool HQ in whatever one pleases, but on this special day, we're reminded of the way Wall Street works as we saunter around Fool HQ in our pinstripes and our pants suits. That's Foolishness, at its essence: reversing the traditional approach favored by society, and then occasionally reversing our own approach, just to appreciate it better. We all need to do stuff like this from time to time.

Shall we run up another $5 here or there, tomorrow, another 2%... lah-dee-da, lah-dee-da? Will the beginning piano student continue to repeat that same passage over and over and over? Or will he come to balance out his practice hours, and spend some time tickling the keys in more unaccustomed sequences? We shall see. As always, come back here to follow along with us.

Foolishly,

David Gardner, June 22, 1998

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06/22/98 Close

Stock Change Bid ---------------- AMZN +5 1/2 81.25 AOL +5 101.38 T - 1/16 63.00 DD - 3/4 73.38 DJT --- 7.31 XON + 9/16 70.63 INVX -1 11.50 IP - 1/2 43.50 IOM + 1/16 5.56 KLAC + 1/2 27.00 LU +2 1/2 74.75 COMS - 3/4 25.88 TDFX + 1/4 17.19 SPY + 5/16 110.38
Day Month Year History FOOL +3.04% 15.32% 32.86% 345.88% S&P: +0.23% 1.13% 13.68% 140.66% NASDAQ: +1.38% 1.52% 15.00% 150.75% Rec'd # Security In At Now Change 8/5/94 710 AmOnline 3.64 101.38 2687.76% 5/17/95 1960 Iomega Cor 1.28 5.56 334.43% 9/9/97 580 Amazon.com 19.11 81.25 325.15% 10/1/96 84 LucentTech 23.81 74.75 213.97% 8/12/96 130 AT&T 39.58 63.00 59.18% 2/20/98 215 DuPont 59.83 73.38 22.63% 1/8/98 115 S&P Depos. 95.91 110.38 15.09% 4/30/97 -1170*Trump* 8.47 7.31 13.65% 2/20/98 200 Exxon 64.09 70.63 10.20% 2/20/98 270 Int'l Pape 47.69 43.50 -8.79% 1/8/98 425 3Dfx 25.67 17.19 -33.04% 8/24/95 130 KLA-Tencor 44.71 27.00 -39.61% 8/13/96 250 3Com Corp. 46.86 25.88 -44.79% 6/26/97 325 Innovex 27.71 11.50 -58.50% Rec'd # Security In At Value Change 8/5/94 710 AmOnline 2581.87 71976.25 $69394.38 9/9/97 580 Amazon.com 11084.24 47125.00 $36040.76 5/17/95 1960 Iomega Cor 2509.60 10902.50 $8392.90 10/1/96 84 LucentTech 1999.88 6279.00 $4279.12 8/12/96 130 AT&T 5145.11 8190.00 $3044.89 2/20/98 215 DuPont 12864.25 15775.63 $2911.38 1/8/98 115 S&P Depos. 11029.25 12693.13 $1663.88 4/30/97 -1170*Trump* -9908.50 -8555.63 $1352.88 2/20/98 200 Exxon 12818.00 14125.00 $1307.00 2/20/98 270 Int'l Pape 12876.75 11745.00 -$1131.75 8/24/95 130 KLA-Tencor 5812.49 3510.00 -$2302.49 1/8/98 425 3Dfx 10908.63 7304.69 -$3603.94 8/13/96 250 3Com Corp. 11715.99 6468.75 -$5247.24 6/26/97 325 Innovex 9005.62 3737.50 -$5268.12 CASH $11662.57 TOTAL $222939.38

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