Fool Portfolio Report
Thursday, August 22, 1996
(FOOL GLOBAL WIRE)
by Selena Maranjian (MF Selena)
ALEXANDRIA, VA, August 22, 1996 -- Life on Mars. We've long wondered about it, and just this month, we heard more about the possibility of it. A meteorite which fell from Mars appeared to contain tiny fossils and fostered further discussion about whether water on the planet combined with volcanic activity might have supported life. But I digress. Let's not think about that kind if life on Mars -- let's think of another kind -- ours!
Yes, humans on Mars. It must be clear that we're going to be running out of room and natural resources here on good old Earth. (Unfortunately, unnatural resources like velcro and Nutrasweet don't seem endangered yet.) It also seems obvious to this Fool that not enough people appear to be working toward solving some of our more pressing global problems. So it appears that we might have to expand our territory and perhaps annex a planet or two. Now, since I'm no scientist, I won't dwell on the intricate details which might make life on Mars difficult for us. Instead, I'll brazenly assume that we've done it. Let's imagine that in the year 2050, people will have begun colonizing Mars. Let's also remind ourselves that we're still Fools, and that we invest for the long term. Maybe we don't always think of that as being 54 years, but indulge me.
So. We're Fools, we've got a Fool Portfolio of nine stocks (America Online, AT&T, Chevron, General Motors, Iomega, KLA Instruments, Medicis, Minnesota Mining & Manufacturing, and 3Com), and we're looking out 54 years, to the peopling of Mars. So here are the big questions. How do our stalwart holdings fare? Will our brave companies be able to take advantage of this exciting new market opportunity? Fortunately for you, I've already done the research, and the answer is a resounding YES!
Imagine moving to Mars. Hooking up your U-Haul trailer to the end of a rocket and taking off. (Whoops! All your possessions just got incinerated upon takeoff! Scratch that idea.) What necessities will you need? Well, if you're reading this online, you probably are the kind of person who will need to have your trusty computer with you. (By 2050, we'll probably all be running Windows45.) How convenient that the FoolPort owns 3Com! 3Com specializes in linking computers to each other via networks. In fact, it boasts of being a "one-stop source" for computer networking. And even more auspicious is the fact that the company is now also involved in remote access systems. After all, how much more remote can you get than Mars and other planets? Remote access will certainly be handier than having to wire the solar system, stringing cables over light years of darkness.
But let's not waste any time here now. I know that many of you are thinking, "Yeah, yeah... but what about that wacky stock, Iomega? It's fallen so far -- what does its future offer?" Well, at Fool HQ we think that Iomega still looks pretty darn attractive, but throwing in the multi-trillion dollar market of Martian storage technology makes it look even better! The future equivalents of the Zip and Jaz drives will surely be necessary, in order to transport massive amounts of data between planets.
Naturally, you'll also want to check your e-mail. Good thing we own America Online! Judging from CompuServe's recent stock price decline, Wall Street doesn't expect to see CompuServe on Mars. By 2050, America Online should have at least hundreds of millions, if not billions, of members, so even if you don't like your neighbors at 16222 Valles Marineris, you can still hang out in the 3-D chatrooms of AOL and meet people there. What about computer upgrades and new technological advances? KLA Instruments to the rescue! Specializing in equipment that renders semiconductor chip-making more efficient, it should do well in the Martian market, which will surely be demanding lots of new kinds of chips. And since, as we all know, the market is efficient (sarcasm intended), it must be this eager anticipation of Martian technology which drove shares of KLA up $7/8 to $20 3/4 today.
Okay. So now we've got you settled on Mars. Your computer is quietly humming beside you, as the sun sets over the red plains, behind a great volcano. Wind storms are sending dust whooshing around everything. How romantic. And fitting, since very shortly you expect that Special Someone to be stopping by for Chicken Marsala and Mars bars. But what's that on your face?? A blemish? A minor surface imperfection? Surely it doesn't matter, as it's what's inside you that really counts, right? Well... yes, but... time to whip out those dermatological drugs! That's right -- Medicis on Mars. Pimples are pimples, after all. No matter where you are, unless you've actually been replaced by an android, you'll need to tend to your skin.
You might be thinking now that I could make a good case for any company's success on Mars. Not true. Consider International Paper. Mars isn't exactly full of trees to chop down. Or Callaway Golf. I'd bet that the extreme temperature swings, from below freezing to way below freezing, together with "waves of darkening", global dust storms and crater traps, would not foster a growing love of golf among ex-planetriates. There are many, many more companies which are probably trembling now, facing the possibility of life of Mars. Fortunately, our Fool Portfolio holdings are exceedingly Mars-friendly.
So back to Mars. Will all Earthlings rush to live there? Nope. Even if they wanted to, there won't be enough room, as Mars is only about half the size of the Earth. So it's a safe assumption that many of your friends will probably remain on good old Earth. This is where our favorite telecommunications behemoth comes in. AT&T. What are AT&T's core competencies? Long distance phone service, for one. Although I cringe to imagine how expensive early calls to and from Mars will be, I'm pleased that we Fools are invested in a long distance specialist, and one that is expanding into wireless calling, too! Again, how convenient. AT&T has spearheaded building communications infrastructures in countries ranging from the US to China to the Philippines. If they can offer modern telecom services across the vast Rub' Al-Khali desert of Saudi Arabia, certainly the mesas, rolling hills, volcanoes and huge canyons of Mars will pose no problem. Didja know that AT&T also dabbles in credit cards? That's right -- AT&T Universal. How prescient of AT&T!
As if all this isn't enough to quicken the heartbeat of any AT&T shareholder, there's more. AT&T is also involved in satellite TV, and through an arrangement with (fellow FoolPort holding) General Motors, it will market DirecTV to its long distance customers. Again, good news for the inhabitants of Mars -- TV via satellite!
The company with perhaps the most exciting prospects in outer space is that wildly creative conglomerate, 3M. Silly as post-its might seem, we've grown used to them and will want them with us on Mars. How about stains? Did you know that 3M makes fabric protectors? Who knows what nefarious solutions might spill onto our sofas in space... Medical mishaps out in the craters? Never fear -- 3M makes medical, dental, and surgical supplies. Don't like breathing mainly carbon dioxide? 3M makes oxygenators and inhalers. Afraid of traffic accidents in a wild and unruly new settlement? Grab some 3M reflective traffic materials. In fact, you'll be needing some 3M tape even before you get to Mars -- when you're packing!
Okay, okay. I can hear a few of you murmuring out there that I seem to have ignored a few minor details. A few things that might come in handy living on Mars. A few things which represent enormous markets and mind-boggling potential profits. In sum, food and shelter. Well, I didn't forget them -- I just saved them for last.
A glance at our Fool Portfolio holdings might make you think that we're locked out of the Martian food market. Not so! Remember good old Chevron? Of course, we all know that it produces oil and gas, certainly handy items when it comes to getting to and from Mars, and even traveling around once you're there. (It also markets chemicals, and even mines coal, though -- these Dow Dividend companies think big!) Well, Chevron also operates service stations across America, which offer edible delicacies like Slim Jims, pretzels and soda. Voila! Food on Mars.
And last but not least, how about shelter? Well, the answer lies in General Motors. In Suburbans, to be more precise. The Great Eland of the vehicular world, the Suburban is big enough to live in. Perhaps if young pioneers move to Mars to make their fortunes, they might find that living in their automobile is more economical than renting housing. After all, at least in the early days, apartments and houses are likely to be somewhat pricey. Older pioneers might prefer large white Oldsmobiles and Cadillacs, and those in between might go for the (ironically-named) Saturn. And one last note about General Motors. It's not all cars. It's financing. Electronics. Even aerospace and defense systems (handy, should those inhabitants of Venus come plundering).
So, now that we have proven that this admirable flock of stocks can fly in worlds unknown, let the space exploration continue! And Fool on!
Oh yeah -- overall, our Fool Portfolio had a pleasant day, as did the market. The S&P 500 was up 0.84%, the Nasdaq was up 1.51%, and the FoolPort? Well, it was up 5.18%.
---Selena Maranjian, August 22, 1996
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(c) Copyright 1996, The Motley Fool. All rights reserved. This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool.
Transmitted: 8/22/96
Today's Numbers
Day Month Year History FOOL -0.43% -2.36% 19.92% 123.93% S&P 500 -0.09% 3.93% 7.98% 45.09% NASDAQ +0.19% 4.29% 7.10% 56.47% Rec'd # Security In At Now Change 5/17/95 2010 Iomega Cor 2.52 13.00 416.08% 8/5/94 680 AmOnline 7.27 30.75 322.80% 1/29/96 375 Medicis Ph 18.57 37.38 101.23% 8/11/95 125 Chevron 50.28 59.25 17.83% 8/12/96 110 Minn M&M 65.68 66.75 1.63% 8/12/96 130 AT&T 54.96 54.13 -1.52% 8/12/96 280 Gen'l Moto 51.97 51.13 -1.63% 8/13/96 250 3Com Corp. 46.86 43.38 -7.44% 8/24/95 130 KLA Instrm 44.71 19.88 -55.55% Rec'd # Security Cost Value Change 5/17/95 2010 Iomega Cor 5063.13 26130.00 $21066.87 8/5/94 680 AmOnline 4945.56 20910.00 $15964.44 1/29/96 375 Medicis Ph 6964.99 14015.63 $7050.64 8/11/95 125 Chevron 6285.61 7406.25 $1120.64 8/12/96 110 Minn M&M 7224.44 7342.50 $118.06 8/12/96 130 AT&T 7144.99 7036.25 -$108.74 8/11/95 280 Gen'l Moto 14552.49 14315.00 -$237.49 8/13/96 250 3Com Corp. 11714.99 10843.75 -$871.24 8/24/95 130 KLA Instrm 5812.49 2583.75 -$3228.74 CASH $1379.61 TOTAL $111962.74 Transmitted: 8/21/96