...just say "Nyet."
by Nico Detourn (TMF Nico)
SANTA CLARA, CA (Aug. 27, 1998) -- This was another one of those days when the interconnectedness of the world just barges in uninvited and plops itself into your lap. There have been several such days lately. Today, it was again Russia's turn to crash the party. That country's deepening economic crisis found its stock market down another 20%, with trading in the Russian Ruble suspended for the second consecutive day. Throw in reports of pressure on President Boris Yeltsin to resign and, well, world markets weren't exactly in a good mood.
Meanwhile, back in the USA, the S&P fell 3.79% and the Nasdaq was off 4.62% -- reflecting its second-largest point loss ever, for those keeping score. The Dow -- all that hubbub over just 30 stocks!?!? -- was down 357 points on its second heaviest volume ever. As for the Fool Port, it went along for the ride, and then some, finishing down 5.07%, with every one of its stocks moving in the wrong direction.
The portfolio's two biggest all-time gainers were among its biggest losers (yep, that's the word) on this day, when good news might have been better saved for a more receptive audience. America Online (NYSE: AOL), announced that its AOL Internet service had passed 13 million members worldwide. Yet neither that milestone, nor yesterday's announcement of AOL's "Baywatch" product placement agreement, could keep the company's stock buoyant. It was sunk $5 5/8 at the close.
One of AOL's more prominent e-commerce partners, and the portfolio's second biggest all-time gainer, Amazon.com (Nasdaq: AMZN), did even worse point-wise, percent-wise, and Fool-wise, closing off over $8 on no apparent news -- not that it needed any today. (By the way, those who missed it earlier this week might want to catch Jeff Fischer's "Foolanalysis" of the online bookseller, a series of columns which begins in Tuesday's and Wednesday's Fool Port.)
Not only did the usual winners help drag the Fool Port down, some of the losers (yes, there's that word, again) seem to have made extra special efforts to do their part. Despite positive comments from two analysts today, and one earlier this week, 3Com (Nasdaq: COMS) lost over $2, or almost 8%. KLA-Tencor (Nasdaq: KLAC), not to be outdone, gave up close to $3, or just under 10%, claiming the dubious distinction of the day's greatest percent loss.
Shall I go on and mention how Iomega (NYSE: IOM) again dipped below $4 per share at one point? Or how Starbucks (Nasdaq: SBUX), the portfolio's most recent addition --- and apparently drinking de-caf recently -- snoozed through news of a 3 percent rise in comparable store sales for the month of August? Or that Lucent Technologies (NYSE: LU), which entered the Fool Port as a 1996 spin-off from the Foolish Four's AT&T (NYSE: T), and is now the portfolio's third biggest gainer, also released positive news to indifferent ears. Even the Donald got into the act as Trump Hotels (NYSE: DJT), currently the Fool Port's one short, managed to scrap together a $0.04 gain.
Oh, the humanity!
Hey, look. It wasn't a good day. It wasn't even a bad day. It was really bad day. Not a lotta fun. But is it the beginning of the end? To listen to some of the voices in our media, you might think it was. Especially with Russia's troubles evoking echoes of Cold Wars and gray do-or-die economic conflicts. Others say this is just an extreme case of the late summer doldrums, and that things will pick up after Labor Day. Yet others have another angle they're working, another newsletter to sell.
All the "backenforth" can be interesting. But you can go crazy thinking about it too intently. It is easy to find yourself caught between contrary opinions, and feeling as though you need to -- are supposed to -- do something about it... right now... before it's... too late! That's not a good place to be.
The solution? You want to have a good sense of your investment goals. A good knowledge of the companies you invest in, and WHY you are invested in those companies and not others with equally memorable ticker symbols and glowing press releases. That knowledge forms the background for assessing whether any given day's disaster is the real Armageddon, the cable TV version of Armageddon, or just another bump on the road between here and the future.
Cya on the boards!
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Today's FoolWatch: all the latest in Fooldom.
Day Month Year History Annualized FOOL -5.07% -3.94% 41.27% 374.11% 46.71% S&P: -3.79% -6.92% 7.49% 127.55% 22.45% NASDAQ: -4.62% -9.93% 7.39% 134.16% 23.31% Rec'd # Security In At Now Change 8/5/94 710 AmOnline 3.64 105.00 2787.44% 9/9/97 580 Amazon.com 19.11 119.00 522.69% 10/1/96 84 LucentTech 23.81 82.63 247.05% 5/17/95 1960 Iomega Cor 1.28 4.00 212.40% 4/30/97 -1170*Trump* 8.47 3.81 54.98% 8/12/96 130 AT&T 39.58 55.06 39.12% 2/20/98 200 Exxon 64.09 69.25 8.05% 2/20/98 215 DuPont 59.83 58.63 -2.02% 2/20/98 270 Int'l Pape 47.69 39.44 -17.31% 7/2/98 235 Starbucks 55.91 34.19 -38.85% 8/13/96 250 3Com Corp. 46.86 27.00 -42.39% 8/24/95 130 KLA-Tencor 44.71 25.38 -43.25% 1/8/98 425 3Dfx 25.67 12.06 -53.00% 6/26/97 325 Innovex 27.71 11.75 -57.60% Rec'd # Security In At Value Change 8/5/94 710 AmOnline 2581.87 74550.00 $71968.13 9/9/97 580 Amazon.com 11084.24 69020.00 $57935.76 4/30/97 -1170*Trump* -9908.50 -4460.63 $5447.88 5/17/95 1960 Iomega Cor 2509.60 7840.00 $5330.40 10/1/96 84 LucentTech 1999.88 6940.50 $4940.62 8/12/96 130 AT&T 5145.11 7158.13 $2013.02 2/20/98 200 Exxon 12818.00 13850.00 $1032.00 2/20/98 215 DuPont 12864.25 12604.38 -$259.88 2/20/98 270 Int'l Pape 12876.75 10648.13 -$2228.63 8/24/95 130 KLA-Tencor 5812.49 3298.75 -$2513.74 8/13/96 250 3Com Corp. 11715.99 6750.00 -$4965.99 7/2/98 235 Starbucks 13138.63 8034.06 -$5104.56 6/26/97 325 Innovex 9005.62 3818.75 -$5186.87 1/8/98 425 3Dfx 10908.63 5126.56 -$5782.06 CASH $11876.47 TOTAL $237055.09