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Monday, March 23, 1998

Cash-King Portfolio Report
by Rob Landley
(landley@flash.net)

Alexandria, VA (Mar. 23, 1998) -- With apologies to Garrison Keillor, it's been a quiet week in the Cash-King portfolio.

I suppose it's fitting that I start my week with a news article about Microsoft (Nasdaq: MFST). It is, after all, a Monday: I'm not SUPPOSED to enjoy it. Last week, Hewlett-Packard (NYSE: HWP) announced that it has created a new Java run-time for embedded devices, beating the release of Sun Microsystems' (Nasdaq: SUNW) standard for doing so by almost a week. Microsoft immediately announced it was licensing the thing for Windows CE.

As I said, it was a quiet week. Even though the mainstream media is playing up this duel between H-P and Sun, to me, this is your basic non-event in the computer world. Rockwell already stole Sun's thunder by creating the first native Java microchip months ago, now Hewlett-Packard beat Sun out the door with an embedded systems run-time. (In the interest of keeping this news report moving, I won't explain the last few lines to those of you not in the know -- but I'd be more than happy to talk it through in the CK message folder.)

Even with these two strikes ag'in 'em, Sun is still the Java-standard submitter to the International Organization for Standardization (ISO) in Geneva, Switzerland. And Microsoft is still being forced to support Java on its platforms due to overwhelming demand. This is just another reminder that any major development in the computer industry (and most of the minor ones) will affect our Microsoft somehow. The only unanswered question in all of this is how Sun expects to actually make money from Java, which has been hanging over its head for a long time. Microsoft closed last week down $5/8 to $81 3/4.

Moving on to another non-event in the technology industry, Intel (Nasdaq: INTC) announced a significant price cut on its 333 Mhz Pentium II chips, from $722 to $583, or around 19%. Intel's new Pentium II is a 700 Mhz chip -- and you can read about that here: Reuters: Intel's New Chips to Lead World. Ladies and gents, that's a stunning increase in the price-to-performance ratio for computers. But I expect this news to go down in the annals of history next to today's weather report. The world is changing that fast; Intel has repeatedly announced that it aims to double the power of chips while halving the price of them as often as possible. Intel closed last week down $1 1/2.

Adding to the slumber party of no news last week, T. Rowe Price (Nasdaq: TROW) has a whole series of non-events coming up. March 23 is the date of record for shareholders to receive the 17-cent dividend on T. Rowe Price shares, payable April 6th. The company's annual meeting will be held April 16th, where shareholders of record will decide whether or not to approve the 2-for-1 stock split scheduled for April 30th. T. Rowe Price finished the week up $3 to $72 1/2.

Up to New York City, Pfizer's (NYSE: PFE) non-event of the past week is buzz over the expected FDA approval of Viagra, a male anti-impotence pill. The drug was featured as a 20/20 segment last Friday on ABC television. And that was pretty much responsible for Pfizer's strong open today, up $5 in the first hour. But, Fools, we still view this as a non-event. While the FDA's decision about Viagra on March 29 will be news, buzz about the potential applications of the drug in advance of it doesn't count for us. March 29th is the day of reckoning for Viagra. We'll be watching. Here's a link to a Reuter's article on the impending approval process for Viagra: Pfizer Flirts with All-Time High. (Oh, and the stock closed last week up $6 1/2 to $92 1/2. As of this writing, Pfizer is up another $4 1/4 today to $96 3/8.)

There was some news out of Coca-Cola (NYSE: KO) this past week, but I'm going to call it largely inconsequential as well. Coke's marketing chief, Sergio Zyman, is expected to step down from his position (Reuters: KO Marketing Chief to Quit). Will this mark a sudden end to over a century of brilliantly successful marketing efforts by the Coca-Cola Company? We don't think so, and the market appears to agree (Coca-Cola stock rose nearly $7 to $77 1/2 last week). Tom Gardner and I attempted to think of the most memorable Coke advertisement since 1993 (when the departing Sergio Zyman took office), but neither of us were sure if either of our top selections were ads for Coke or Pepsi. Hmmm. Not good.

And finally today, the creme-de-la-creme (a type of French pastry) of non-events. On Friday, the Cash-King portfolio actually beat both the S&P 500 and the Nasdaq for the day. And we're still holding over a quarter of the portfolio in cash! In the early days of a portfolio, the commission fees and the costs of carrying cash will hold you below the market's returns. We're only in week seven here. We'll start focusing on the overall numbers more closely in week seventy-seven. The remaining buys are oncoming, Fools. But, in the meantime, it's nice to have beaten the market on Friday.

Fool on,

- Rob Landley

(P.S. Your attention please. I would like to announce that this column has been personally drooled on by Haley, Tom Gardner's sister's dog, who hounded me as I tried to type up this report before my flight back to Texas. This news is at least as important as anything else I've mentioned today! Later this week, I'll provide full coverage -- with photos -- of the Cash-King writers' journey to Fool Global HQ in Alexandria, VA this weekend. Until then...)


TODAY'S NUMBERS
Stock  Change    Bid 
 ---------------- 
 CHV     ---    86.88 
 KO    -1 11/16 75.81 
 EK    +  1/2   63.25 
 XON   +1 1/2   68.63 
 GM    -  15/16 69.81 
 INTC  -  3/4   75.00 
 MSFT  +2 1/8   83.88 
 PFE   +3 5/8   96.13 
 TROW  -1 5/8   70.88 
 

                  Day   Month    Year  History 
         C-K      +0.23%   1.23%   3.01%   3.01% 
         S&P:     -0.33%   4.40%   9.41%   9.41% 
         NASDAQ:  +0.19%   1.24%   8.45%   8.45% 
  
     Rec'd    #  Security     In At       Now    Change 
    2/3/98    22 Pfizer        82.30     96.13    16.80% 
    2/27/98   27 Coca-Cola     69.11     75.81     9.70% 
    2/3/98    24 Microsoft     78.27     83.88     7.16% 
    3/12/98   20 Exxon         64.34     68.63     6.67% 
    2/6/98    28 T. Rowe Pr    67.35     70.88     5.24% 
    3/12/98   15 Chevron       83.34     86.88     4.24% 
    3/12/98   20 Eastman Ko    63.15     63.25     0.16% 
    3/12/98   17 General Mo    72.41     69.81    -3.58% 
    2/13/98   22 Intel         84.67     75.00   -11.43% 
  
  
     Rec'd    #  Security     In At     Value    Change 
    2/3/98    22 Pfizer      1810.58   2114.75   $304.17 
    2/27/98   27 Coca-Cola   1865.89   2046.94   $181.05 
    2/3/98    24 Microsoft   1878.45   2013.00   $134.55 
    2/6/98    28 T. Rowe Pr  1885.70   1984.50    $98.80 
    3/12/98   20 Exxon       1286.70   1372.50    $85.80 
    3/12/98   15 Chevron     1250.14   1303.13    $52.98 
    3/12/98   20 Eastman Ko  1262.95   1265.00     $2.05 
    3/12/98   17 General Mo  1230.89   1186.81   -$44.08 
    2/13/98   22 Intel       1862.83   1650.00  -$212.83 
  
                               CASH   $5666.26 
                              TOTAL  $20602.89 
   
 *The year for the S&P and Nasdaq will be as of 02/03/98 
       

 

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