Fool Portfolio Report
Monday, June 30, 1997
Jeff Fischer (TMF Jeff)

CHICAGO, IL. (June 30, 1997) -- Has anyone seen Tom or Dave around? Rumor is that David is on a beach somewhere and that Tom has checked into a small motel near Sioux City, Iowa to write his manifesto. At least that's the story I got concerning why I was asked to pinch hit writing this recap. Whatever the reason, you're stuck with the gaming guy's writing today.

It actually feels slightly odd writing this portfolio update because, hey, this is Dave and Tom's real money we are talking about here. This is not some theoretical model portfolio. This is the real thing, baby. It is said that people are more willing to talk about their sex life than they are about their own personal finances. And yet here we have a portfolio as real as they get, exposed for the world to see -- mistakes and all. It takes some serious guts to do what they're doing.

I'm being completely honest when I say there was no news to speak of from the Fool portfolio stocks today. Nothing. Nadda. Zilch. Millions of people dialed into AOL, 3Com sold a couple thousand modems and network cards, while GM moved a car or two. In other words, just another day in the life. I'm starting to think that beginning the holiday weekend a little early isn't a bad idea.

I would be remiss if I did not mention something about TRUMP <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DJT)") else Response.Write("(NYSE: DJT)") end if %> during this recap. There should be some words of warning for those who are short the stock. Those words are, "Expect better results from Trump in the second quarter." I say this because the company's gaming win as reported to the New Jersey Casino Control Commission is up almost exactly 10% year to date compared to last year. Below is a table of the year to date gaming win as of May 31 for Trump's three New Jersey casinos:

($ thousands)
Unit              1997        1996       % change
Taj Mahal       219,298     200,638        +9.3%
Trump Plaza     115,061      99,533       +15.6%
Trump Castle    112,231     105,878        +6.0%

Total           446,590     406,049        +10.0%  

Keep in mind that this is only gaming win, and does not factor in any revenue increases or decreases in the non-gaming hotel and restaurant side of the business. The bulk of the increased gaming activity has come during the months of April and May, which were reported after the sell report was issued. In other words, one of the risk factors outlined when the stock was sold short has partially come true since that time -- people are currently losing more money to Trump in Atlantic City.

Will this mean that Trump will actually be profitable on a fully amortized basis for the second quarter? I am guessing he might come close, as do the analysts who are estimating the company will earn $0.04 in the quarter. Will this mean that Trump will be cash-flow positive in the second quarter? The evidence certainly points toward it. Will this mean the Fool port will be covering their short soon? Probably not.

While things may be looking good right now, one has to remember that Atlantic City's gaming business is an extremely seasonal one. Where Trump is having some good times now, come winter things are likely to look much more bleak. The recent blip in activity does little to change the amount of debt the company has ($1.7 Billion) nor the annual interest payments the company pays out (roughly $200 million). More importantly, it does not change the fact that Trump has some serious competition coming to town which will require massive capital spending to "keep up with the Joneses".

The good news is out there now, but do not think for a second that this piece of mid-quarter news is going unnoticed at Fool HQ. With all Trump's leverage, it takes some guts to bet the "Don't Pass" against The Donald -- just as it took some guts to start the world's first full-disclosure portfolio. If Tom and David have made a mistake in shorting Trump, rejoice, because you have a rare opportunity in the finance world to learn from someone else's mistake.

This was fun, but not nearly as much fun as writing the gaming updates I scribe on a weekly basis. I mean, in what other industry besides gaming could Mike Tyson biting an ear off cause the stock of a major company to dip almost 2 points at the open? I'm sure Tyson is going to get an ear-full from MGM GRAND <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MGG)") else Response.Write("(NYSE: MGG)") end if %> for his ear-responsible behavior (WARNING: don't click the last hyperlink unless you have a strong stomach!). Thank you, and don't forget to tip your waitress!

--Paul Larson (TMF Parlay)

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Stock  Change    Bid
----------------
AOL   +1 1/8   55.63
T     -  3/4   35.06
ATCT  -  5/16  4.69
CHV   +1 3/16  73.94
DJT   +  3/8   10.75
GM    -  1/16  55.75
INVX  +1 1/4   28.88
IOM   +  1/8   19.88
KLAC  +  1/8   48.75
LU    +  1/4   72.06
MMM   +  1/4   102.25
COMS  -  1/2   44.94

                Day   Month    Year  History
        FOOL     +0.19%   2.81%   5.46% 181.45%
        S&P:     -0.24%   4.35%  19.50%  93.10%
        NASDAQ:  +0.27%   2.98%  11.70% 100.24%


    Rec'd    #  Security     In At       Now    Change
  5/17/95   980 Iomega Cor     2.52     19.88   688.69%
   8/5/94   355 AmOnline       7.27     55.63   665.13%
  8/12/96   110 Minn M&M      65.68    102.25    55.69%
  10/1/96    42 LucentTech    47.62     72.06    51.34%
  8/11/95   125 Chevron       50.28     73.94    47.04%
  8/24/95   130 KLA Tencor    44.71     48.75     9.03%
  8/12/96   280 Gen'l Moto    51.97     55.75     7.27%
  6/26/97   325 Innovex       27.71     28.88     4.21%
  8/13/96   250 3Com Corp.    46.86     44.94    -4.10%
  8/12/96   130 AT&T          39.58     35.06   -11.41%
  4/30/97 -1170 *Trump*        8.47     10.75   -26.94%
 10/22/96   600 ATC Comm.     22.94      4.69   -79.56%

    Rec'd    #  Security     In At     Value    Change
   8/5/94   355 AmOnline    2581.87  19746.88 $17165.01
  5/17/95   980 Iomega Cor  2594.53  19477.50 $16882.97
  8/12/96   110 Minn M&M    7224.44  11247.50  $4023.06
  8/11/95   125 Chevron     6285.61   9242.19  $2956.58
  8/12/96   280 Gen'l Moto 14552.49  15610.00  $1057.51
  10/1/96    42 LucentTech  1999.88   3026.63  $1026.75
  8/24/95   130 KLA Tencor  5812.49   6337.50   $525.01
  6/26/97   325 Innovex     9005.62   9384.38   $378.75
  8/13/96   250 3Com Corp. 11714.99  11234.38  -$480.62
  8/12/96   130 AT&T        5145.11   4558.13  -$586.99
  4/30/97 -1170*Trump*     -9908.50 -12577.50 -$2669.00
 10/22/96   600 ATC Comm.  13761.50   2812.50-$10949.00


                              CASH  $40625.59
                             TOTAL $140725.65