<THE RULE BREAKER PORTFOLIO>
As The 'Net Turns
ï¿½@Home Does Canada
by Barbara Eisner Bayer (TMFVenus@aol.com)
HILLSBORO BEACH, FL (March 18, 1999) -- Fueled by tame inflation and a booming economy, the soap opera known as the stock market continued its flirtation with DOW 10,000 today, closing at 9997.62. Looks like traders will have to wait another day, week or who-knows-how-long before five digits settle in comfortably. We Fools pay no heed to arbitrary numbers, preferring to focus on the fundamental business of a company. The market is like the ocean's tide, coming to shore, retreating, coming in a little further, retreating again, then coming in all the way as it floods your beach towel while you are snoozing. And no matter what happens in the short-term, over the long haul, the stock market has been the best place for individual investors to find rising returns on their dollars. Indeed, a day at the financial beach.
The Rule Breakers, up a smashing 4.98% today as opposed to the S&P's 1.44% and the NASDAQ's 1.40%, continued to do what they do best -- break rules -- as many of today's Internet favorites further entangled themselves in a confusing web of romantic alliances.
Take a look at the town of Internet, USA -- it's a relatively new settlement with big hopes and dreams for the future. Patriarch Rule Breaker pioneer AOL put down its cyber roots and sprung from a fledgling upstart to become the first family that every cyber wannabe yearns to marry into. Along the way, several other forward thinking families came to town to set up shopï¿½ the Amazon, @Home, and Netscape clans, to name just a few. And now, consolidation is the operative word as these visionary pillars of cyber society see that joining forces is best for the community's interests.
However, connecting the dots of the emerging landscape of this new cyber community is producing something along the lines of a Rorschach Test instead of a clear blueprint of what's happening. AOL and Netscape met at the dance and came home betrothed. Ditto @Home and Excite. In addition, AOL has been having a brief fling with Amazon. So far, so good and no Ken Starr in sight. Then comes today's news.
Those hot and sexy pharmaceutical websites have stormed into town, blurring the borders between our heroes. Today, PlanetRx opened its website with a 3-year agreement to be a premier pharmacy partner on AOL. Butï¿½ wait a second. Doesn't AOL's brand new bride Netscape already have a deal with online pharmacy Drugstore.com, who is already partially engaged to Amazon.com? And Drugstore.com is already entangled with Netscape competitor Excite. How will they ever get out of this competitive maze without snagging the attention of the Justice Department? Tune in tomorrow, Foolish viewers, for another exciting episode of "As the Net Turns."
There is no doubt in our Foolish minds, however, that bigger CAN be better if it is managed well. And if all our Rule Breakers meld into one giant gorilla.com, we'll just bring lots of bananas; we certainly can handle that.
Speaking of gorillas, America Online's (NYSE: AOL) acquisition of Netscape now makes it a larger chunk of the S&P Index, representing 1.4 percent of the S&P 500, up from its previous .084 percent. Not bad for the new kid on the block who joined the prestigious S&P country club in December.
@Home (Nasdaq: ATHM) moved north $3 3/4 to $124 3/8 today as it expanded its presence in Canada by joining with Videon CableSystems, Inc., Canada's fifth largest cable operator, to deliver high speed cable Internet services in key markets north of the border through an entity called Videon@Home. @Home will now be able to access more than 500,000 homes and will be affiliated with four of the top five Canadian cable operators. See, I told you bigger is better!
@Home is also responsible for today's quote of the day, from senior vice president and general manager Dean A. Gilbert, who crowed: "Through the power of cable, Videon@Home will help transform the Internet into a viable mass medium that will be as readily available and indispensable to the home as the telephone and television." As indispensable as the telephone and television. Imagine being an early investor in the telephone or television. Yupï¿½ that's where we want our money to be.
Today is also memorable as several of the Wise turned Foolish by noticing and upgrading Rule Breaker holdings, causing them to merrily rise on no significant news: Amazon (Nasdaq: AMZN) was up $7 7/16 to $138 7/16 3/4, eBay (Nasdaq: EBAY) rose $5 to $160 3/4, and AOL jumped $7 1/16 to $116 1/8. All were beneficiaries of analysts' kind words. (Wonder where these guys and gals have been all these months.)
Finally, one of the best ways for Fools to begin investing for retirement is through IRAs. If you are ready to start and want to learn more, please read our new IRA feature right here.
Day Month Year History Annualized R-BREAKER +4.98% 19.78% 36.04% 1265.48% 76.18% S&P: +1.44% 6.32% 7.42% 200.76% 26.94% NASDAQ: +1.40% 7.65% 12.33% 241.99% 30.52% Rec'd # Security In At Now Change 8/5/94 2200 AmOnline 0.91 116.38 12704.64% 9/9/97 1320 Amazon.com 6.58 138.44 2004.16% 5/17/95 1960 Iomega Cor 1.28 5.06 295.38% 12/4/98 450 @Home Corp 56.08 124.38 121.78% 12/16/98 580 Amgen 42.88 78.00 81.92% 2/26/99 300 eBay 100.53 160.75 59.91% 4/30/97 -1170*Trump* 8.47 4.13 51.29% 2/23/99 180 Chevron 79.17 86.50 9.26% 7/2/98 235 Starbucks 55.91 60.56 8.32% 2/23/99 290 Goodyear T 48.72 51.56 5.85% 2/23/99 300 Caterpilla 46.96 46.81 -0.32% 2/20/98 260 DuPont 58.84 56.81 -3.45% 1/8/98 425 3Dfx 25.67 14.00 -45.46% Rec'd # Security In At Value Change 8/5/94 2200 AmOnline 1999.47 256025.00 $254025.53 9/9/97 1320 Amazon.com 8684.60 182737.50 $174052.90 12/4/98 450 @Home Corp 25236.13 55968.75 $30732.62 12/16/98 580 Amgen 24867.50 45240.00 $20372.50 2/26/99 300 eBay 30158.00 48225.00 $18067.00 5/17/95 1960 Iomega Cor 2509.60 9922.50 $7412.90 4/30/97 -1170*Trump* -9908.50 -4826.25 $5082.25 2/23/99 180 Chevron 14250.50 15570.00 $1319.50 7/2/98 235 Starbucks 13138.63 14232.19 $1093.56 2/23/99 290 Goodyear T 14127.38 14953.13 $825.75 2/23/99 300 Caterpilla 14089.25 14043.75 -$45.50 2/20/98 260 DuPont 15299.43 14771.25 -$528.18 1/8/98 425 3Dfx 10908.63 5950.00 -$4958.63 CASH $9924.87 TOTAL $682737.68Note: The Rule Breaker Portfolio was launched on August 5, 1994, with $50,000. Additional cash is never added, all transactions are shared and explained publicly before being made, and returns are compared daily to the S&P 500 (including dividends in the yearly, historic and annualized returns). For a history of all transactions, please click here.
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