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Cash-King Port

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

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• Rule Maker Port
• Boring Port
• Drip Port
• Foolish Four Port
• Harry Jones


<THE CASH-KING PORTFOLIO>
Pepsi Takes on Coke
C-K news of the week
by Rob Landley (landley@flash.net)

Austin, TX (Nov. 16, 1998) -- Despite all of our best efforts, it's Monday again. There just doesn't seem to be a whole lot we can do about it. On the bright side, this means our companies have had another week to earn money for us. Let's see if they have by taking a look back at the week that was:

Cash-King  Last    This    Change
Intel      $95.44 $103.75  + 8.7%
Gap Inc.   $67.13  $68.88  + 2.6%
Microsoft $109.31 $110.00  + 0.6%
AmEx       $97.31  $94.56  - 2.8%
Pfizer    $109.31 $105.50  - 3.5%
Coca-Cola  $72.63  $69.75  - 4.0%
Cisco      $67.44  $64.69  - 4.1%
S Plough  $107.25 $101.88  - 5.0%
T. Rowe    $35.75  $30.94 - 13.5%

Fool Four  Last    This    Change
GM         $67.06  $70.13  + 4.6%
Chevron    $83.31  $83.00  - 0.4%
Kodak      $78.00  $77.50  - 0.6%
Exxon      $73.50  $72.88  - 0.8%

S&P 500      1141    1126  - 1.3%
Total C-K $25,519 $25,116  - 1.6%

The Cash-King Portfolio lost to the market by 0.3% on the week, dropping us to exactly a 3% lead over the S&P 500 for the year. Going into this morning, the year-to-date C-K figures read like this:

 
Since Launch
in February, 1998
C-K:     + 14.90%
S&P:     + 11.90%
NASDAQ:  + 10.90%

The Gap (NYSE: GPS) is just plain having fun, earning $.40 per share in the third quarter as opposed to $.27 over the same quarter last year. Wow. For those of you who missed the Fool's conference call synopsis on Friday, here it is: The Gap's Third Quarter Conference Call Summary. I suspect that next week Tom will walk through Gap's performance, item after item, sheet by sheet. Our casual clothes company rose 2.6% on the week.

Intel's (Nasdaq: INTC) also been having a good time lately, actually an outstanding time. The chipmaker's stock nose-dived shortly after we bought it, yet ended Friday up over twenty percent from where we bought it. The "and hold" part of the buy-and-hold strategy really comes in handy at times, doesn't it? Intel is focusing on cost cutting and has announced that it expects fourth quarter sales to beat expectations. Read all about it here: Intel Will Push To Lower Costs Further In 1999.

Incidentally, at the Cash-King Portfolio we continue the Kurlak Watch™ -- as we have ever since Merrill Lynch semiconductor analyst Tom Kurlak spoke publicly twice this past summer about the softening of Intel's business and his short-term target price of $60 per share. As the stock has never reached that low, we are still placing the Foolish Analyst Muzzle™ on Mr. Kurlak. He is not allowed to publicly comment on Intel until either he acknowledges that he was wrong with his last short-term call or until Intel actually falls to $60 per share (not including 2-for-1, 3-for-2, 3-for-1, or 5-for-1 splits).

Fool me once, shame on you. Fool me twice, shame on me! The danger of speaking twice is that a Fool must step in with the accountability stick.

Pepsi is spinning off some of its bottlers, in a smart attempt to copy our sodamaker's organizational structure. The bottler IPO should provide Pepsi with several billion dollars in cash and a better looking balance sheet in the future. What does this have to do with Coke (NYSE: KO)? Analysts seem to think it'll put Pepsi in a strong enough position to end the price wars between Big Blue and Big Red. Pepsi's move to float bottler may mean a truce.

In early October, Warren Buffett and Berkshire Hathaway went on a buying spree, running up bills on their plastic green card. Buffett bought more than 1.25 million additional shares of American Express (NYSE: AXP) at prices in the low $70s (Insider Trades: American Express). As far as we can tell, these purchases had nothing to do with the Cash-King Portfolio's decision to buy and hold AXP for the years ahead. So we won't flatter ourselves.

T. Rowe Price (NYSE: TROW) released another quarterly report, which you can read for yourself using the link below. Net income for the quarter was only up 4% over last year's third quarter, but net income for the first three quarters of 1998 is up 25% over the first three quarters of 1997 (TROW form 10-Q).

Cisco (Nasdaq: CSCO) signed a couple of cross-licensing and manufacturing deals. Pfizer (NYSE: PFE) is testing a new arthritis medication called "Celebrex." Schering-Plough (NYSE: SGP) just announced an intent to split its stock 2-for-1. And our Foolish Four holdings held steady through the down market week. Generally, a pretty quiet week.

Oh, and... you may have noticed a conspicuous absence of Microsoft coverage in today's article. Trust me, I intend to make up for that over the rest of this week, and to enjoy every second of it.

Until then...

- Rob Landley (Oak)

Order your copy of Rule Breakers, Rule Makers in advance.
The book doesn't come out until January, but you can reserve your copy today!


11/16/98 Close
Stock  Change    Bid
AXP   +2 3/8   96.94
CHV   +  7/16  83.44
CSCO  +2 1/4   66.94
KO    +  1/4   70.00
GPS   -  7/16  68.44
EK    +  5/16  77.81
XON   -1 7/16  71.44
GM    +2 11/16 72.81
INTC  +3 1/8   106.88
MSFT  -1 1/8   108.88
PFE   +3 5/16  108.81
SGP     ---    101.88
TROW  +2 3/16  33.13

                 Day     Month   Year    History
        C-K      +1.50%   4.93%  16.63%  16.63%
        S&P:     +0.90%   3.38%  12.91%  12.91%
        NASDAQ:  +0.74%   5.10%  11.72%  11.72%

Cash-King Stocks

    Rec'd    #  Security     In At       Now    Change
    2/3/98   24 Microsoft     78.27    108.88    39.10%
    5/1/98   37 Gap Inc.      51.09     68.44    33.95%
    2/3/98   22 Pfizer        82.30    108.81    32.22%
   2/13/98   22 Intel         84.67    106.88    26.22%
   6/23/98   34 Cisco Syst    58.41     66.94    14.60%
   8/21/98   22 Schering-P    95.99    101.88     6.13%
   2/27/98   27 Coca-Cola     69.11     70.00     1.29%
    2/6/98   56 T. Rowe Pr    33.67     33.13    -1.63%
   5/26/98   18 AmExpress    104.07     96.94    -6.85%

Foolish Four Stocks

    Rec'd    #  Security     In At     Value    Change
   3/12/98   20 Eastman Ko    63.15     77.81    23.22%
   3/12/98   20 Exxon         64.34     71.44    11.04%
   3/12/98   17 General Mo    72.41     72.81     0.56%
   3/12/98   15 Chevron       83.34     83.44     0.11%

Cash-King Stocks

    Rec'd    #  Security     In At     Value    Change
    2/3/98   24 Microsoft   1878.45   2613.00   $734.55
    5/1/98   37 Gap Inc.    1890.33   2532.19   $641.86
    2/3/98   22 Pfizer      1810.58   2393.88   $583.30
   2/13/98   22 Intel       1862.83   2351.25   $488.42
   6/23/98   34 Cisco Syst  1985.95   2275.88   $289.93
   8/21/98   22 Schering-P   2111.7   2241.25   $129.55
   2/27/98   27 Coca-Cola   1865.89   1890.00    $24.11
    2/6/98   56 T. Rowe Pr  1885.70   1855.00   -$30.70
   5/26/98   18 AmExpress   1873.20   1744.88  -$128.33

Foolish Four Stocks

    Rec'd    #  Security     In At     Value    Change
   3/12/98   20 Eastman Ko  1262.95   1556.25   $293.30
   3/12/98   20 Exxon       1286.70   1428.75   $142.05
   3/12/98   17 General Mo  1230.89   1237.81     $6.92
   3/12/98   15 Chevron     1250.14   1251.56     $1.42

                              CASH    $120.62
                             TOTAL  $25492.31
 
*Please note: On 8/4/98 $2,000 cash was added to the
portfolio. $2,000 will be added every six months.

*The year for the S&P and Nasdaq is as of 02/03/98

</THE CASH-KING PORTFOLIO>

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