Fool Portfolio Report
Thursday, August 15, 1996
(FOOL GLOBAL WIRE)
by Tom Gardner
ALEXANDRIA, VA, August 15, 1996 -- The new look Fool Portfolio gave back 1% of our savings account today, as two of our top three performers --Iomega and Medicis Pharmaceuticals - slipped $1 per share. The losses were diluted by gains in America Online, AT&T, and 3Com.
The Fool-Stock newswire was again overloaded today. With the addition of General Motors and AT&T, we've had to eliminate CNN, MSNBC, and MacNeil-Lehrer from our daily schedule. If news-stories were Hostess Ho-Hos, I'd be in very serious trouble.
AT&T had some interesting releases today. First, they requested third-party arbitration in twenty states in which negotiations with GTE Corporation to begin broader penetration into the local-phone market have stalled. Under the new Telecommunications Act, AT&T is not allowed into select local markets unless GTE Corp. has moved into the long-distance business there. But terms of the federal law also require that state arbitration in this case be settled by December 12th. So expect Ma Bell to come knocking between now and Christmas.
T's second announcement told of the construction launch of a fiber-optic cable link from the southern-most point in Maine north to the Canadian border. The link will enable the transmission of voice, data and video signals. Can you see that lobsterman stroking his dory back from the Isles of Shoals to video conference with his sister in her cabin at the base of Sugarloaf mountain? Coming to a home theatre near you by next summer, Mainers.
AT&T closed up $3/4 to $54 7/8. T is almost in the black for us.
Over at General Motors, our automobile manufacturer today announced plans to delay the launch of two of its new full-sized family vans---the Chevrolet Express and the GMC Savana. A GM spokesman said that production at their Wentzville, Missouri plant has been held up by glitches in their new, computer-driven, robotic body shop installed for these vehicles. Zounds. . . look out!
In other unrelated GM news, the company today announced that it is taking advantage of the new empowerment zone policy in the Detroit area, which provides tax-breaks and incentives for locating businesses in low-income districts. GM will build a $25 million industrial park in southwest Detroit, on the site where once stood its Cadillac division. Paparazzi-chasing GM shareholders can drop by this site and tour the offices of former Detroit Piston, Vinnie Johnson, whose business produces corrugated boxes for Da Big 3 automakers.
All this and our number one automaker is launching a record 14 new cars and light trucks over the next twelve months. GM closed the day up $1/2 to $52 3/8. The stock has made us $112.58 in four market days. In for a pound, in for a penny.
Believe it or not, there was far more news than this from our stable of Dow stallions, but we've tried to filter in only the best stuff for you. At your service, Fool.
Y'know, much as I love the mechanical nature of The Foolish Four Approach---and that word love doesn't scratch the surface of my feelings--I think our broader goal of business investing begs that we peek in on the operations of our behemoths, from time to time.
From cable linkage to full-sized vans, from natural gas in Uzbekistan to the transparent tape that adheres to the refrigerator your niece's artistic representation of a cow grazing atop an oak tree. . . these are the businesses of our Foolish Four stocks in the year ahead. With 22% historical annual returns supporting them, these names---3M, Chevron, GM and AT&T---bring grins from ear to ear whenever we gloss over mutual fund advertisements. "Get 7.5% per year without effort!"
Gee, thanks.
FYI, our crack research squad just finished surveying the last of our nation's 250 million citizens. Would you believe that 99.5% of America has never heard of Dow-Dividend investing? From Wichita to Tampa and from Flagstaff to Providence, Americans are mutual-fund crazy. Apparently, our nation just can't get enough of sleepy mediocrity. . . to be distinguished from sleepy excellence.
After a long business day, we sometimes wonder if we shouldn't just shut down this darned online shop and start touting mutual funds elsewhere online. In praise of the subpar for the prettiest of pennies---imagine the advertising revenue. Imagine the pure foolishness of it all.
The financial aristocracy would actually begin to support the forum, rather than aiming to undermine it. All of a sudden, Foolishness is all about giving over the management of your money to others at any cost. So they take 5% upfront, 2% per year, and haven't beaten the market once since their inception in 1989. It's so foolish, it hurts. Just buy the darned fund through your local bank. Pay the load. Rest easy. And take that 7% annualized.
In six months, we're public. In two years, our stock is half what it once was. We've sold Foolish shareholders down the river. A whole bunch of people are in market-losing mutual funds. We head very far south. The Motley Fool is an estate in the hills of Montserrat. You can't find us. Don't even try.
It'd all be so simple!
If only we hadn't bothered to read Hewlett-Packard's list of corporate objectives, among them:
Trust and respect individuals.
Concentrate on superior contribution and achievement.
Conduct business with uncompromising integrity.
Achieve common objectives through teamwork.
Open up communication between customers, employees & shareholders.
Darn the founders at Hewlett-Packard. It could have been so quick and easy: a story, a shine, The Fool Estate and a peachblown sunset.
--- Tom Gardner, August 15, 1996
Today's Numbers
Day Month Year History FOOL -1.07% 4.41% 28.24% 139.45% S&P 500 +0.03% 3.49% 7.53% 44.48% NASDAQ +0.10% 5.02% 7.85% 57.56% Rec'd # Security In At Now Change 5/17/95 2010 Iomega Cor 2.52 15.88 530.22% 8/5/94 680 AmOnline 7.27 30.50 319.37% 1/29/96 375 Medicis Ph 18.57 40.75 119.40% 8/11/95 125 Chevron 50.28 57.88 15.09% 8/12/96 110 Minn M&M 65.68 66.88 1.82% 8/12/96 95 Gen'l Moto 51.97 52.38 0.77% 8/12/96 130 AT&T 54.96 54.88 -0.16% 8/13/96 250 3Com Corp. 46.86 46.75 -0.23% 8/24/95 130 KLA Instrm 44.71 18.63 -58.34% Rec'd # Security Cost Value Change 5/17/95 2010 Iomega Cor 5063.13 31908.75 $26845.62 8/5/94 680 AmOnline 4945.56 20740.00 $15794.44 1/29/96 375 Medicis Ph 6964.99 15281.25 $8316.26 8/11/95 125 Chevron 6285.61 7234.38 $948.77 8/12/96 110 Minn M&M 7224.44 7356.25 $131.81 8/11/95 280 Gen'l Moto 14552.49 14665.00 $112.51 8/12/96 130 AT&T 7144.99 7133.75 -$11.24 8/13/96 250 3Com Corp. 11714.99 11687.50 -$27.49 8/24/95 130 KLA Instrm 5812.49 2421.25 -$3391.24 CASH $1297.96 TOTAL $119726.09 Transmitted: 8/15/96