Fool Portfolio Report
Wednesday, November 1, 1995

It was another delightful day for Foolish investors, as America Online zoomed up $6 1/4 to $86 1/4. That, combined with strong moves in a couple of our Dow holdings, made for a banner one-day investment return of almost two percent, easily outdistancing fractional gains in our benchmark index competitors.

But let's start with our losers. We actually had three stocks today that got touched up for one-dollar losses or worse. We'll start with KLA Instruments, which got slam-dunked $1 3/4. No news in KLA-KLA Land. But General Electric, on the other hand, did have news. GE reported that its Aircraft Engines subsidiary had received an order valued at $145 million from the Spanish Air Force for 51 of its F404-GE-400 fighter engines. The Spaniards plan to park these babies in 24 used F/A-18s sold from the U.S. Navy inventory, planes expected to last 15 years or more. Such upbeat multinational news must have been just too much for the market to handle, which dropped the stock a buck. The nerve of some people.

Our other one-dollar loser was The Gap, which has been running up and down through the high $30's for a couple of weeks now. Today, it was a drop of $1 to $38 1/4. Saying the Gap's stores "look terrific," a J.P. Morgan analyst predicted a flat-to-2% October same-store sales gain (the numbers will be released shortly). These numbers are actually quite impressive relative to the uninspiring reports of some other retailers. For instance, Ann Taylor went down 13% in October, while analyst Maura Hunter Byrne has Talbots slated for a 4%-6% drop, and a 13%-15% drop for beleaguered Charming Shoppes. And Dow Jones reported today that a NatWest analyst expected the Limited to lose 5% in October's same-store comparisons.

So why did the market dock our stock a dollar? Hey, you're asking a Fool. I can tell you stuff about kings, and queens, and juggling, and whatnot, but don't pin me down on calling short-term market moves. Or anyone else, for that matter.

Turning now to the excitement of the day, you had to love the new high in America Online, unless you were one of those constantly demoralized short sellers. AMER, which went into this week with an all-time high of $74 1/2, closed Wednesday at $86 1/4, up another $6 1/4 on the bid. Yesterday after market close, the new media juggernaut announced a 2-for-1 split to occur on November 28th, which probably got some speculators excited. That combined with anticipation of a big earnings announcement November 7th mostly explains the stock's recent move.

We won't be surprised one bit if AMER sells off following its earnings report, actually. Happened with RIDE, as Fool followers will remember. Investors buy on the rumor and sell on the news, in my experience; that's one of Wall Street's truer axioms.

Long-time Fool stock Sears caught another gain of $7/8 Wednesday, lifting these shares to $34 3/4, within a few points of their 52-week high. And Chevron also paced our growth today, up $3/4 to $47 1/2. Chevron has been the weak cousin in our trio of Dow high-yielders, off 3% since our August purchase. Now, just so long as we can all work together---all of us, my fellow Fools---to PREVENT anyone, anywhere, from striking oil, Chevron's oil (and stock) should increase markedly in value in the next several quarters.

So I close this lovely rainy evening (in Alexandria, anyway) with an urge for us to work together as a team to prevent anyone from striking oil until next August (our Beating the Dow turnaround month). Join me in frustrating the efforts of others!

---David Gardner, November 1, 1995

AMER  +6 1/4
AMAT  -  3/4
CHV   +  3/4
GE    -1
GPS   -1
IOMG  -  1/8
KLAC  -1 3/4
RIDE  -  1/8
S     +  7/8
SNIC  -  1/4

                   Day   Month    Year  History
        FOOL     +1.80%   1.80%  64.19%  82.31%
        S&P 500  +0.47%   0.47%  27.20%  27.45%
        NASDAQ   +0.43%   0.43%  38.37%  44.48%



    Rec'd  #   Security     In At       Now    Change

   8/5/94 340 AmOnline       14.55     86.25   492.96%
  5/23/95 510 Ride Inc.       9.91     24.00   142.26%
  5/17/95 335 Iomega Corp    15.11     23.63    56.31%
   8/5/94 165 Sears          28.93     34.75    20.14%
  4/20/95 155 The Gap        32.55     38.25    17.51%
  8/11/95  95 GenElec        57.91     62.25     7.49%
  8/11/95 110 Chevron        49.00     47.50    -3.06%
  8/24/95 130 KLA Instrm     44.71     41.00    -8.30%
  8/24/95 100 AppldMatl      57.52     49.38   -14.17%
 12/23/94 340 SonicSol       14.48      7.75   -46.49%


    Rec'd  #   Security      Cost     Value    Change

   8/5/94 340 AmOnline     4945.56  29325.00 $24379.44
  5/23/95 510 Ride Inc.    5052.44  12240.00  $7187.56
  5/17/95 335 Iomega Corp  5063.13   7914.38  $2851.25
   8/5/94 165 Sears        4772.65   5733.75   $961.10
  4/20/95 155 The Gap      5045.25   5928.75   $883.50
  8/11/95  95 GenElec      5501.87   5913.75   $411.88
  8/11/95 110 Chevron      5389.99   5225.00  -$164.99
   8/24/95130 KLA Instrm   5812.49   5330.00  -$482.49
  8/24/95 100 AppldMatl    5752.49   4937.50  -$814.99
 12/23/94 340 SonicSol     4924.18   2635.00 -$2289.18


                             CASH   $5969.86
                            TOTAL  $91152.99