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Cash-King Port

The Cash King Portfolio has been renamed the Rule Maker Portfolio.

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E-mail and the Future

by Tom Gardner
(TomG@fool.com)

Alexandria, VA (June 29, 1998) -- The Cash-King Portfolio had a bang-up week last week, ringing up portfolio gains of 4.6% in a strong market. The S&P 500 rose 3.0%. All but one of our stocks gained ground, while Microsoft posted another 10% gain for the week. Our MSFT shares have risen from around $85 1/2 to $104 1/2 over the past ten market days, a gain of nearly 22%. (The stock is up another $3 today, as of this writing.)

The Cash-King Portfolio since inception is now running neck-and-neck with the market indices. As of market close on Friday, the Naz has risen 13.11%, the S&P 500 is up 13.17%, and our portfolio is up 13.11% since February 3rd. And, the indices have had the advantage up until now -- they've been fully invested since our launch and haven't paid any commissions to get there.

So, we're excited to be running a dead heat so early in the race, and we're hungry for the future (and a nice way to live life away from the financial markets, too). Whether the next 20% market move is up or down, I'm fired up to be fully invested in the common stock of some of America's and the world's greatest companies, as the planet democratizes. I'm even happier to get in at such low transaction costs with such little hassle. Leaving performance out of it for a moment, I still believe that the Cash-King approach to investing is more convenient and more attractive than buying a managed mutual fund.

Now speaking of performance, we're happy to report to you that The Cash-King Portfolio is outperforming more than 80% of all managed mutual funds in America -- without annual expense ratios, to boot. The downside of this model is that we haven't been able to pay ourselves million-dollar salaries yet. Maybe we need to start charging the growing ranks of Cash-King participants a 2% front load, a 1.7% annual expense ratio, 1% in administrative fees, and a 4% back load on total assets just to gain access to this column.

Nahh. This is Main Street, not Wall Street.

Ok, let's look at the performance of our stocks for the past week...

 
  
 Cash-King  Last     This     Change 
 Microsoft  $94.63  $104.38  +10.3% 
 Intel      $69.94   $76.38   +9.2% 
 Coca-Cola  $80.38   $85.81   +6.8% 
 T Rowe     $35.06   $36.69   +4.6% 
 Cisco Sys* $86.00   $89.88   +4.5% 
 Gap Inc.   $58.75   $61.00   +3.8% 
 AmEx      $106.63  $110.50   +3.6% 
 Pfizer    $111.25  $111.94   +0.6% 
 * purchased on Tuesday 
  
 Fool Four  Last     This     Change 
 E. Kodak   $67.13   $70.13   +4.5% 
 Exxon      $70.06   $72.25   +3.1% 
 Chevron    $81.31   $83.63   +2.9% 
 GM         $67.13   $66.88   -0.4% 
  
 S&P 500   1100.65  1133.20   +3.0% 
 Total C-K $21,626  $22,623   +4.6% 
 

In the news, Microsoft (Nasdaq: MSFT) roared ahead after the federal court of appeals lifted a preliminary injunction preventing Softy from requiring computer makers to install the company's Internet browser along with Windows 95. Rob Landley wrote a very interesting article on Mr. Softy on Friday (click here: Microsoft Monopoly). And there have been a slew of great notes from developers, legislators, former Microsoft employees, Fools all in our Microsoft Web folder.

Elsewhere at Microsoft, in his keynote speech at the launch of Windows 98, our Chairman and CEO Bill Gates predicted that 60 percent of all U.S. homes will have a PC in the year 2001 and 85 percent of those homes will be connected to the Internet. I wouldn't be surprised if those estimates prove low. For individuals, the Internet is like the gardens at Versailles, bursting new colors at every turn. For any media and business organizations that profits off the ignorance of the individual, the Internet -- with no mechanical, chemical or biological means to stop it -- is proving the very worst sort of weed.

What makes it grow? they shout.

For further evidence of the Internet's uniquely accelerated development, I recently flipped through a fine article by Howard Anderson of Yankee Group in Upside Magazine. In it he suggests that the U.S. government would save significant monies on first-class mail delivery by installing Internet-ready PCs in every unwired home in America. It's a great article; it reminds one of how dramatically the world is changing. I highly recommend it to you (click here: Technology Goes Mainstream).

Elsewhere in C-K land, Coca-Cola (NYSE: KO) announced to a roomful of analysts and investors in Atlanta that its second-quarter unit case sales would come in above analyst expectations. Notable in the announcement were Coca-Cola's numbers in a struggling Asia -- up 7% to 8% over the same period last year. For a look at the second-quarter stats, click this post from our Coca-Cola superman on the Web boards, MYCROF4: Coke Speaks to the Analysts.

Latest C-K addition, Cisco Systems (Nasdaq: CSCO), pressed ahead on news of a Morgan Stanley Dean Witter target-price upgrade of $105 for 1998. While thrilled to hear the enthusiasm from a firm with enormous resources dedicated to tracking the technology industry, we were disappointed to see that their analysis focused so intently on 1998. The Cash-King portfolio is holding rock steady on its target price of $122 3/8 in the year 2013, after splits over the years amounting to a 10-for-1 split.

Cisco also announced last week that their Chief Technology Officer, Judith Estrin, has been named to the board of directors of Disney. In her career, Estrin has been the CEO of three separate companies -- Bridge Communications, bought by 3Com in 1987; Network Computing Devices (Nasdaq:NCDI); and Precept Software, purchased by Cisco in March of last year. Estrin sits on the boards of Federal Express, Sun Microsystems, Rockwell, and now Disney. Pretty impressive.

And Gap Inc. (NYSE: GPS) kept plugging ahead, up another 4% on the week. No news from the company, but they are featured in Fooldom today as a Daily Double. Rick Munarriz does a fine job outlining some stats and putting together some Foolish thoughts on Da Gap in his short report. Click here to read The Gap's Double.

Finally today, The Motley Fool Radio Show featured Starbucks Corporation (Nasdaq: SBUX) in its "Who Should We E-Mail This Week?" segment on Saturday. Starbucks is the unlucky public business which appears to have chosen to ignore securities law. Apparently (being as legalistic as I can here), Starbucks restricts individual investors from accessing a live or taped version of its quarterly conference calls. If you'd like to let Starbucks know how you feel about being disadvantaged through your exclusion from information in the public markets, drop them a note at info@starbucks.com -- please be polite and Foolish!

I'll be back tomorrow with some musings on Gap's business and a look to the future.

Fool on!

Tom Gardner


06/29/98 Close
Stock  Change    Bid 
 ---------------- 
 AXP   +1 3/16  111.69 
 CHV   -1 1/8   82.50 
 CSCO  +1 15/16 91.81 
 KO    +  3/16  86.00 
 GPS   +1 7/16  62.44 
 EK    +  1/2   70.63 
 XON   -  3/4   71.50 
 GM    +1 3/8   68.25 
 INTC  -  5/8   75.75 
 MSFT  +3       107.38 
 PFE   -2 3/16  109.75 
 TROW  +1 9/16  38.25 
 

                  Day   Month    Year  History 
         C-K      +0.99%   8.01%  14.23%  14.23% 
         S&P:     +0.47%   4.37%  13.70%  13.70% 
         NASDAQ:  +1.15%   6.31%  14.41%  14.41% 
  
 Cash-King Stocks 
  
     Rec'd    #  Security     In At       Now    Change 
     2/3/98   24 Microsoft     78.27    107.38    37.19% 
     2/3/98   22 Pfizer        82.30    109.75    33.36% 
    2/27/98   27 Coca-Cola     69.11     86.00    24.44% 
     5/1/98   37 Gap Inc.      51.09     62.44    22.21% 
     2/6/98   56 T. Rowe Pr    33.67     38.25    13.59% 
    5/26/98   18 American E   104.07    111.69     7.32% 
    6/23/98   23 Cisco Syst    86.35     91.81     6.33% 
    2/13/98   22 Intel         84.67     75.75   -10.54% 
  
 Foolish Four Stocks 
  
     Rec'd    #  Security     In At     Value    Change 
    3/12/98   20 Eastman Ko    63.15     70.63    11.84% 
    3/12/98   20 Exxon         64.34     71.50    11.14% 
    3/12/98   15 Chevron       83.34     82.50    -1.01% 
    3/12/98   17 General Mo    72.41     68.25    -5.74% 
  
 Cash-King Stocks 
  
     Rec'd    #  Security     In At     Value    Change 
    5/26/98   18 American E  1873.20   2010.38   $137.18 
     2/3/98   24 Microsoft   1878.45   2577.00   $698.55 
     2/3/98   22 Pfizer      1810.58   2414.50   $603.92 
    2/27/98   27 Coca-Cola   1865.89   2322.00   $456.11 
     5/1/98   37 Gap Inc.    1890.33   2310.19   $419.86 
     2/6/98   56 T. Rowe Pr  1885.70   2142.00   $256.30 
    6/23/98   23 Cisco Syst  1985.95   2111.69   $125.74 
    2/13/98   22 Intel       1862.83   1666.50  -$196.33 
  
 Foolish Four Stocks 
  
     Rec'd    #  Security     In At     Value    Change 
    3/12/98   15 Chevron     1250.14   1237.50   -$12.64 
    3/12/98   20 Eastman Ko  1262.95   1412.50   $149.55 
    3/12/98   20 Exxon       1286.70   1430.00   $143.30 
    3/12/98   17 General Mo  1230.89   1160.25   -$70.64 
  
                               CASH     $51.68 
                              TOTAL  $22846.18 
   
 *The year for the S&P and Nasdaq will be as of 02/03/98 
       

</THE CASH-KING PORTFOLIO>

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