Iomega Makes Amends
And a hot month to remember...
by Paul Larson
(TMFParlay@aol.com)

CHICAGO, IL (June 29, 1998) -- The market was hot again this summer Monday, but the Fool Portfolio sat in the air-conditioning and cooled off a bit. While the Nasdaq scorched ahead 1.15% on the day, the portfolio could only muster a mere 0.32% jog forward.

With only one trading day left in the month, let's take inventory of how the portfolio has done this June. After all, it has definitely been a month to remember.

Value              May 29, 1998    June 29, 1998 
 Dow Industrials      8899.95            8997.36 
 S&P 500              1090.82            1138.49 
 Nasdaq               1778.88            1891.08 
 Fool Portfolio   $193,319.31        $237,554.01
Monthly Performance    May '98   June '98 (6/29) 
 Dow Industrials            -1.80%       +1.09% 
 S&P 500                    -1.88%       +4.37% 
 Nasdaq                     -4.79%       +6.31% 
 Fool Portfolio             -5.21%      +22.88%
Pretty amazing how the fortunes of a portfolio can change so quickly, no? Also, notice the symmetry in the performance rankings between May and June. It's almost an exact mirror image. In any case, we certainly don't have to look very far to see the fuel behind the portfolio's explosive month. Amazon.com (NYSE: AMZN) and America Online (NYSE: AOL) are to thank for the lion's share of the performance, as can be seen below.
Closing Prices    5/29/98    6/29/98   % Change 
 AMZN             $44 1/16    $98 3/4    +124.1% 
 AOL              $83 5/16   $104 3/4     +25.7%
When any portfolio has its two largest holdings perform so well, it only makes sense that the portfolio will perform well, too. Of course, there is one more trading day left in the month and anything can happen. Nevertheless, I think it's a safe bet that June will end up in the "victory" column for the portfolio come this time tomorrow evening. (Unless AOL or Amazon gets sliced in half.)

I noticed this weekend that there has been quite a bit of discussion and trading activity concerning one of the portfolio's core holdings -- AT&T (NYSE: T). The company's proposed merger with cable company Tele-Communications, Inc. (Nasdaq: TCOMA), or TCI, has stirred up more than a little controversy and speculation as to the future of the industry in general and Ma Bell in particular.

But you know what? Those guiding this ship known as the S.S. FoolFolio couldn't care less about this news as it concerns our investing decision to own AT&T, since it is part of our Foolish Four holdings. We are married to the company, as well as International Paper (NYSE: IP), DuPont (NYSE: DD), and Exxon (NYSE: XON) for the next fourteen months regardless of what these companies do over this time period. While we may watch the news surrounding Ma Bell with a moderate amount of interest, it ultimately will not affect our decision to keep the "brainless" Foolish Four holding.

I guess that's one of the things I love about the Fool Four and many of the other mechanical Dow Dogs methods. They require minimal effort and thought to initiate and maintain, but have historically returned quite an impressive return. There may be other investing methods out there that may outperform the Fool Four, but at what cost in terms of time and effort?

In other portfolio related news, Iomega (NYSE: IOM) had a card fall in its favor in a big way today. It was announced earlier that the company will purchase a majority stake in the French company Nomai for $21 million. This is good for Iomega because Nomai had been making floppy disks that were competing with Iomega's proprietary Zip disks. Iomega and Nomai had been in a nasty legal battle over whether or not Nomai had infringed upon Iomega's patents and copyrights. With this purchase, Nomai has admitted to shady dealings with Iomega's intellectual property.

Iomega purchasing a majority of its old arch-rival is certainly a strange twist of events. It's good for the company in that it essentially wipes out its one and only competitor for Zip disks as well as reinforces Iomega's position as the leading company in the removable-storage market. It also allows the company's management (and lawyers) to concentrate on other matters.

While today's news looks good to this Fool, it does not mean that things are all peaches and roses in Roy, Utah. There are still some rather large issues that the struggling Iomega has to deal with. In other words, Iomega won today's battle, but the war is still being waged. Iomega ended the day up almost 8% to close at $6 1/16.

That's about all for this Monday. Have a great summer evening, Fools!

-- Paul Larson

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06/29/98 Close

Stock Change Bid ---------------- AMZN +4 5/8 98.75 AOL -3 3/4 104.00 T + 1/16 57.00 DJT - 3/8 7.31 DD - 5/16 74.63 XON - 3/4 71.50 INVX + 5/16 13.31 IP -1 42.88 IOM + 7/16 6.06 KLAC - 1/2 27.50 LU +2 1/16 82.31 COMS - 1/16 30.50 TDFX - 9/16 15.44 SPY + 1/2 114.06
Day Month Year History FOOL +0.32% 22.88% 41.57% 375.11% S&P: +0.47% 4.37% 17.32% 148.36% NASDAQ: +1.15% 6.31% 20.42% 162.58% Rec'd # Security In At Now Change 8/5/94 710 AmOnline 3.64 104.00 2759.94% 9/9/97 580 Amazon.com 19.11 98.75 416.72% 5/17/95 1960 Iomega Cor 1.28 6.06 373.48% 10/1/96 84 LucentTech 23.81 82.31 245.73% 8/12/96 130 AT&T 39.58 57.00 44.02% 2/20/98 215 DuPont 59.83 74.63 24.72% 1/8/98 115 S&P Depos. 95.91 114.06 18.93% 4/30/97 -1170*Trump* 8.47 7.31 13.65% 2/20/98 200 Exxon 64.09 71.50 11.56% 2/20/98 270 Int'l Pape 47.69 42.88 -10.10% 8/13/96 250 3Com Corp. 46.86 30.50 -34.92% 8/24/95 130 KLA-Tencor 44.71 27.50 -38.49% 1/8/98 425 3Dfx 25.67 15.44 -39.86% 6/26/97 325 Innovex 27.71 13.31 -51.96% Rec'd # Security In At Value Change 8/5/94 710 AmOnline 2581.87 73840.00 $71258.13 9/9/97 580 Amazon.com 11084.24 57275.00 $46190.76 5/17/95 1960 Iomega Cor 2509.60 11882.50 $9372.90 10/1/96 84 LucentTech 1999.88 6914.25 $4914.37 2/20/98 215 DuPont 12864.25 16044.38 $3180.13 8/12/96 130 AT&T 5145.11 7410.00 $2264.89 1/8/98 115 S&P Depos. 11029.25 13117.19 $2087.94 2/20/98 200 Exxon 12818.00 14300.00 $1482.00 4/30/97 -1170*Trump* -9908.50 -8555.63 $1352.88 2/20/98 270 Int'l Pape 12876.75 11576.25 -$1300.50 8/24/95 130 KLA-Tencor 5812.49 3575.00 -$2237.49 8/13/96 250 3Com Corp. 11715.99 7625.00 -$4090.99 1/8/98 425 3Dfx 10908.63 6560.94 -$4347.69 6/26/97 325 Innovex 9005.62 4326.56 -$4679.06 CASH $11662.57 TOTAL $237554.01

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