INDEX:

I. Market News: Year-End Index Gains
II. Heroes: China Tire, Vision-Sciences, HA-LO Industries
III. Goats: Barnes & Noble, Dia Met Minerals, Alliance Semi
IV. Investment Perspective: 1995---The Year of The Fool
V. Calendar: Tuesday's Economic Events

MARKET CLOSE

DJIA: 5117.12, up 21.32
S&P 500: 615.93, up 1.81
NASDAQ: 1052.14, up 9.92

MARKET NEWS

In 1995 we saw a year for records to tumble. The Dow Jones Industrial Average set no less than 69 new highs during the year. For the three major indices we follow, here's how 1995 ended up:

Dow Jones Industrial Average     +33.45%
S&P 500 Index                    +34.11%
Nasdaq Composite                 +39.92%

All three indices, of course, saw new closing highs throughout the year. Their records sit at 5216.47 for the Dow, 621.33 for the S&P 500, and 1069.78 for the Nasdaq. All three are within two percent of those records as we finish out 1995. Have a Happy New Year and may all your longs be Iomegas and all your shorts be Sonic Solutions!

HEROES

American Depositary Receipts (ADRs) in Asian stocks have climbed recently, and China Tire <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:TIR)") else Response.Write("(NYSE:TIR)") end if %> has been no exception, adding another $1 1/4 today to close at $8, adding to big gains earlier in the week. Traders believe interest in Asian companies is rising because of continued strength in the United States market. One trader claimed that "Hong Kong is a good place to be invested in right now, especially as a door into China."

Vision-Sciences <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:VSCI)") else Response.Write("(NASDAQ:VSCI)") end if %> rose $1 1/8 to close at $4 3/4 today. On Tuesday the company announced that it received FDA clearance to market its Fiber Optic ENT Scope. Vision-Sciences develops, manufactures, and markets unique flexible endoscope products utilizing disposable sheaths which provide the users quick, efficient product turnover while ensuring the patient a contaminant-free product.

HA-LO Industries <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:HALO)") else Response.Write("(NASDAQ:HALO)") end if %> shows up in the Heroes column for the second time this week, gaining $5 1/4 today to close at $30 3/4. On Wednesday, the company announced the acquisition of Fletcher-Barnhardt. Today, it announced a five-year extension of its current five-year agreement to be the exclusive provider of premium advertising products to Montgomery Ward & Co. Ward chairman and CEO Bernard Brennan has nothing but praise for HA-LO's performance under the current agreement.

GOATS

A roller-coaster ride for Barnes & Noble <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:BKS)") else Response.Write("(NYSE:BKS)") end if %>, courtesy of a single analyst. Yesterday PaineWebber upgraded the stock from "attractive" to "buy." Today, they turned right around and downgraded it again, from "buy" to "hold," sending the stock tumbling $3 3/8 to $29. Analyst Craig Bibb cited fourth-quarter superstore comparable store sales growth which is likely to suffer from severe winter weather in the Northeast as the reason. Apparently Bibb discovered after yesterday's upgrade that sales declines in the four days preceding Christmas were as severe as 50 percent because of the heavy snow. Since the pre-Christmas storm isn't exactly "hot" news, you gotta wonder what prompted the upgrade to begin with.

Dia Met Minerals <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX:DMM.B)") else Response.Write("(AMEX:DMM.B)") end if %> was chipped today, down $1 1/8 to $9 3/8 on its fiscal third-quarter earnings report. For the first nine months, Dia Met posted a net loss of $301, 310, nearly 57 percent more than last year's loss. Dia Met is a mineral exploration and development company, focusing on diamonds. The company's future rests on hopes that its 29% in the Northwest Territories Diamonds Project (in the Luc de Gras area of Canada's Northwest Territories) will serve it well in the first North American large-scale commercial diamond mine.

Alliance Semiconductor <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:ALSC)") else Response.Write("(NASDAQ:ALSC)") end if %> added to the recent spate of technology companies warning of poor earnings ahead. As a result, the stock was blasted, dropping $1 3/4 to close at $11 5/8. Yesterday, the company announced that production problems and price pressures would hurt third-quarter earnings. With static random access memory chip makers (SRAMs) already reeling from pricing pressures, the additional debacle of Alliance's largest wafer supplier cranking out products for as much as a month that failed to meet company specifications was enough to prompt the earnings warning. Alliance claimed that third-quarter profits would fall "significantly below" analysts' expectations.

INVESTING PERSPECTIVE: A 1995 Foolish Retrospective

As the first full calendar year for The Motley Fool draws to a close, I thought we'd take a look back---not at the impressive gains for the market, not at the fact that we're three months into a fiscal year and still have no budget, not even at the sobering fact that we have troops in Bosnia---but rather a retrospective of a more localized kind. It makes sense to look back at the growth of this very forum over the last 12 months, a growth which makes even Iomega's rise seem puny. Well, okay, not exactly puny, but you get the point.

In the last year, The Motley Fool has grown from a relatively small content provider into one of the most-visited sites on America Online, drawing roughly 140,000 readers a month. (That isn't including people with multiple screen names either; the figure is for unique AOL accounts.) And in that time the forum has been re-shaped again and again to add new content, more message boards, and many new features.

Some of the additions include the Port Folly game, the Dow Area, an expanded Evening News service which includes earnings numbers and essays on current economic indicators, more extensive reports on the Fool Portfolio and the Running With the Market Portfolio, a new Fool Primer, a host of Foolish Freebies to get you something extra for being Fools, a weekly newsletter, more chat rooms, auditorium events, and a number of areas I'm undoubtedly overlooking.

And what's planned for next year? Another year of growth and Foolish enterprises! If you haven't seen it yet, check out the brand new Industry Research area (Keyword:Sector) which just had its debut---an area staffed by Foolish analysts who understand not just the stock market aspects, but the day-to-day aspects of the industries they cover from the inside out. In addition, Port Folly has its grand re-opening on January 8. The entire format of the game has been adjusted to make it more player-oriented, more interactive, more competitive, more fun. Check out the Port between now and January 8 for details about the new format.

But the Fool has even more surprises in store! Coming soon is a complete facelift for the forum, with new screens and updated America Online architecture to make the rapidly expanding forum easier to navigate. (In the meantime, you can find virtually everything in its current location by opening our Motley Fool Index.) And to top it all off, David and Tom Gardner's THE MOTLEY FOOL INVESTMENT GUIDE is scheduled for release from Simon & Schuster in early January.

In other words, the Fool is ARRIVING! But our growth has come at a cost. Perhaps the most crucial cost is the pressure on the very spirit which breathes life into Fooldom as a community. I don't know if it's a function of our growing numbers or the fact that many of us have been hammered in tech stocks this quarter and have generally been cranky, but the chat rooms and message boards (the central areas of the Fool) have grown more and more antagonistic in recent months.

As the new year starts, how about we all make as one of our new year's resolutions a pledge to keep the spirit of The Motley Fool invigorated. We're in here together to become successful investors. We don't need to adopt the "me against you" attitudes which poison our special community. As a newbie to investing myself not all that long ago, it was the humor, the willingness of the participants to teach complete novices about the market, and the spirit of friendly cooperation which hooked me on the Fool. Let's strive to keep that sense of community, even as we grow in 1996 and beyond.

Stay Foolish and Happy New Year!

CALENDAR: Tuesday's Economic Events

---Mitsubishi/Schroder Wertheim Weekly Chain Store Sales (9:00)
---December Nat'l Assn of Purchasing Management Survey (10:00)
---Treasury Auctions 13- & 26-Week Bills (1:30)
---Johnson Redbook Weekly Survey of Retail Sales (2:55)
---American Petroleum Inst Weekly Oil Statistics (after 4:00)
---December Car and Truck Sales (most manufacturers)

***All government reports are contingent on the Washington silliness currently taking place courtesy of our elected officials.

Byline: Robert Sheard (MF DowMan) & Randy Befumo (MF Templar)