<THE RULE BREAKER PORTFOLIO>
What Happened to Fool Port?
The Greatest Port on Earth
Send in the Clowns
by Rick Aristotle Munarriz (TMF Edible)
MIAMI, FL (Dec. 29, 1998) -- Wambsganss! Is there really anything else that need be said about the Rule Breaker Port in 1998? Wait a minute. You don't know Wamby do you? Let me take you back to Game Five of the 1920 World Series. Bill "Wamby" Wambsganss, the Cleveland Indians second baseman, surveys the field. It's the fifth inning, no outs, runners on first and second. The Brooklyn Dodgers send Clarence Mitchell to the plate who hits a screaming line drive right to Wamby. With the runners going he gloves the ball. One out. He sets his foot on second base. Two outs. He tags the incoming runner from first. Three outs.
To this day it remains the only unassisted triple play in World Series history. Yesterday, the Rule Breaker became a triple play. I am scouring the realm of managed mutual funds through the years and while I find the rare double play I can't find one that has tripled over the course of any calendar year.
But this is not about Wamby, or baseball -- it's about vision. Right away, I have to say with some degree of confidence that the Rule Breaker Port won't repeat this year's 202.46% performance next year. It might be less. It might be more. But 202.46%? I doubt it.
Today, mostly on the heels of weakness in our own Tinkers to Evers to Chance combo of Internet powerhouses America Online (NYSE: AOL), Amazon.com (Nasdaq: AMZN), and @Home (Nasdaq: ATHM) the Rule Breaker Port fell 2.4%. The S&P 500 had a healthy 1.3% gain while the Nasdaq Composite closed out flat.
America Online was due for a breather. As most people know by now the online services giant will be added to the S&P 500 Index by the end of the week. Does this mean the Internet now has validity? Please! Wall Street has already handed out its stamp of approval. As a matter of fact, after the soon-to-be Boring Port holding Berkshire Hathaway (NYSE: BRK.A and BRK.B), the next two largest market capitalizations of companies not yet invited to the S&P 500 are Internet companies Yahoo! (Nasdaq: YHOO) and our own Amazon.com.
Anyway, why has America Online been so hot these past few trading days? C'mon, sorry Nora but You've Got Mail wasn't that good. What has happened is that knowing full well that every index fund manager is going to have to load up on America Online by Thursday's close some speculators are trying to cash in on what was then a given. America Online would have a strong day to close out the year. However, the once expected scenario of a strong Thursday followed by profit-taking Monday morning may already be obsolete given the speculators who may now try to jump the gun again and sell into the index manager buying frenzy. That's what is so great about the market. Uncertainty. Unlike You've Got Mail, you never really know how this trading saga will end. Heck, if there was an office pool I'd say AOL is flat to down on Thursday -- and then strong on Monday.
But why are we talking about short-term gyrations? We should be looking further ahead and wondering how big a highlighter I'm going to need to fully absorb the contents of Industry Focus 1999 and this port's titular masterpiece over the next few months.
Now, pardon my cotton candy typing tonight. I was at the Ringling Brothers Barnum & Bailey Circus over the weekend, and there stood Khan, billed as the world's tallest man. I'm not a big guy to begin with, but staring up at this eight-foot tall specimen I kept asking myself the same questions that many of us have of the Rule Breaker Port this year. Is this real? Didn't we all start out the same size? Exactly how is the weather up there?
This is indeed The Greatest Port on Earth. I don't mean that in a pompous blowout year braggart way. No, it's not all about size. Even before this monster year the Rule Breaker Port has made it a habit of performing daring feats of investment fancy -- always without a net. As the fire-eating Wise spew forth scorched advice, and I even hear Barron's Alan Abelson was once a legendary word swallower, here we have been witness to a fully accountable, rolled up sleeves, approach to investing.
Don't mind me, I'm just the seventh painted face of the bakers dozen who pack into the clownmobile. I can sing. I can dance. Just please don't put me near that there tiger cage. I may be wearing big ole clown shoes, but I certainly can't fill them quite the way David Gardner and Jeff Fischer have this year.
So, looking back at this year in review, what exactly did I learn? I learned that tomorrow starts yesterday. I learned that traditional valuation parameters apply only to traditional companies. I learned that one never stops learning. I'm bound to learn that last lesson again and again.
As Wamby retires the side with a single glove -- I absorb. I learn.
As Khan towers beyond even the wildest expectations -- I absorb. I learn.
As the circus heads out of town -- I absorb. I learn. I yearn.
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</THE RULE BREAKER PORTFOLIO>
Stock Change Bid
----------------
AMZN -19 5/8 332.31
AMGN + 5/16 104.88
AOL -3 3/16 153.88
T +3 13/16 78.81
ATHM -3 78.50
DJT + 1/16 3.81
DD - 1/16 56.56
XON +1 3/16 75.69
IP + 7/8 44.56
IOM - 1/8 7.69
LU + 13/16112.06
SBUX +1 7/16 52.75
TDFX --- 11.75
Day Month Year History Annualized
R-BREAKER -2.38% 46.09% 202.46% 915.07% 69.34%
S&P: +1.33% 6.72% 27.96% 170.89% 25.42%
NASDAQ: +0.07% 11.91% 38.93% 202.95% 28.65%
Rec'd # Security In At Now Change
8/5/94 1100 AmOnline 1.82 153.88 8365.37%
9/9/97 440 Amazon.com 19.74 332.31 1583.64%
5/17/95 1960 Iomega Cor 1.28 7.69 500.39%
10/1/96 84 LucentTech 23.81 112.06 370.69%
8/12/96 130 AT&T 39.58 78.81 99.13%
4/30/97 -1170*Trump* 8.47 3.81 54.98%
12/4/98 450@Home Corp. 56.08 78.50 39.98%
12/16/98 290 Amgen 85.75 104.88 22.30%
2/20/98 200 Exxon 64.09 75.69 18.10%
2/20/98 215 DuPont 59.83 56.56 -5.47%
7/2/98 235 Starbucks 55.91 52.75 -5.65%
2/20/98 270 Int'l Pape 47.69 44.56 -6.56%
1/8/98 425 3Dfx 25.67 11.75 -54.22%
Rec'd # Security In At Value Change
9/9/97 440 Amazon.com 8684.60 146217.50 $137532.90
8/5/94 1100 AmOnline 1999.47 169262.50 $167263.03
5/17/95 1960 Iomega Cor 2509.60 15067.50 $12557.90
12/4/98 450@Home Corp. 25236.13 35325.00 $10088.87
10/1/96 84 LucentTech 1999.88 9413.25 $7413.37
12/16/98 290 Amgen 24867.50 30413.75 $5546.25
4/30/97 -1170*Trump* -9908.50 -4460.63 $5447.88
8/12/96 130 AT&T 5145.11 10245.63 $5100.52
2/20/98 200 Exxon 12818.00 15137.50 $2319.50
2/20/98 215 DuPont 12864.25 12160.94 -$703.31
7/2/98 235 Starbucks 13138.63 12396.25 -$742.38
2/20/98 270 Int'l Pape 12876.75 12031.88 -$844.88
1/8/98 425 3Dfx 10908.63 4993.75 -$5914.88
CASH $39332.55
TOTAL $507537.36
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