<THE RULE MAKER PORTFOLIO>
What Happened to Cash-King?
Rule Maker News
By Rob Landley ([email protected])
Austin, TX (Jan. 19, 1999) -- Cisco's rival Lucent Technologies (NYSE: LU) just announced that is buying Ascend Communications (Nasdaq: ASND) for $20 billion, putting Cisco and Lucent more directly in competition. Even assuming Lucent can easily digest a company the size of Ascend, it still has an uphill battle to make any sort of dent in Cisco's market share. However, the competition should help keep Cisco (Nasdaq: CSCO) on its toes anyway. Here's some analysis of the merger from Ziff-Davis' Inter@ctive Investor, which goes into far more detail than I have space for here.
The microchip design formerly known as "Katmai" has now been rechristened "Pentium III" by Intel (Nasdaq: INTC), which intends to launch it in March according to this article in the Electronic Buyers' news. The chip will initially be manufactured to run at 500 mhz, with the runts of the litter sold at 450 mhz. The article also talks about Advanced Micro Devices' (NYSE: AMD) forthcoming competitor, the K7 microchip, which will apparently come to market later and be more expensive to manufacture.
For those of you interested in the technical details of Intel's new chip, here's a detailed review. Katmai includes many new CPU instructions, meaning software compiled to take full advantage of it won't run without it. The moat digging continues.
In other Intel news, the company recently announced plans to include encryption capabilities in future chips, which apparently neatly bypasses the U.S.' brain-dead encryption export laws that have now forced almost all encryption research and development overseas. Those laws currently only apply to software, not hardware.
And before moving on to the rest of the portfolio, I would be derelict in my duties as a Fool if I didn't pass along the following article, proving once and for all that techies are weird: "Installing a network PostScript printer on a Sun workstation running SunOS, as illustrated through interpretive dance."
Pfizer (NYSE: PFE) filed a patent for a faster-acting spray version of Viagra, although the company says it has no plans to develop an actual product around it yet.
Gap Inc. (NYSE: GPS) is one of 18 companies targeted by a human rights lawsuit over the generally disreputable working conditions of foreign workers in the clothing industry. Nike had similar problems a while back, which turned into a public relations nightmare. In this case, the sweatshops were run by subcontractors that supplied garments to several different companies. Although Gap Inc. wasn't directly involved (this time), the underlying problem that foreign textiles are far cheaper than domestic equivalents is industry-wide, due to the nature of textile work as unskilled labor. It's harder to monitor the conditions of foreign workers, and tempting to just follow the numbers on the balance sheet and ignore the underlying reality until protesters show up at your door. Hopefully, our company will be more careful in the future.
The Coca-Cola Co. (NYSE: KO) continues to pay attention to cheap Asian bottling assets, and American Express (NYSE: AXP) continues to buy up smaller accounting firms. Make money, use it to buy something else that makes even more money, watch the stock go up, pat the CEO on the back at the annual meeting, rinse, repeat.
I'll be covering Microsoft's recent news tomorrow. Those of you in the front row may want to shield yourselves with your dinner menus. It's bound to get ugly.
Until then,
- Oak
Al
Stock Change Bid AXP -3 7/8 100.50 CHV + 1/2 80.56 CSCO +4 11/16 106.38 KO - 13/16 64.06 GPS + 7/16 57.88 EK - 1/4 68.75 XON --- 71.06 GM +4 11/16 88.00 INTC +4 139.38 MSFT +5 7/8 155.63 PFE + 1/16 115.69 SGP - 5/16 52.44 TROW - 15/32 33.91 |
Day Month Year History
R-MAKER +1.25% 3.86% 3.86% 35.16%
S&P: +0.70% 1.85% 1.85% 24.45%
NASDAQ: +2.55% 9.83% 9.83% 44.52%
Rule Maker Stocks
Rec'd # Security In At Now Change
2/3/98 24 Microsoft 78.27 155.63 98.83%
6/23/98 34 Cisco Syst 58.41 106.38 82.12%
5/1/98 55.5 Gap Inc. 34.06 57.88 69.92%
2/13/98 22 Intel 84.67 139.38 64.60%
2/3/98 22 Pfizer 82.30 115.69 40.57%
8/21/98 44 Schering-P 47.99 52.44 9.26%
2/6/98 56 T. Rowe Pr 33.67 33.91 0.69%
5/26/98 18 AmExpress 104.07 100.50 -3.43%
2/27/98 27 Coca-Cola 69.11 64.06 -7.30%
Foolish Four Stocks
Rec'd # Security In At Value Change
3/12/98 17 General Mo 72.41 88.00 21.54%
3/12/98 20 Exxon 64.34 71.06 10.46%
3/12/98 20 Eastman Ko 63.15 68.75 8.87%
3/12/98 15 Chevron 83.34 80.56 -3.34%
Rule Maker Stocks
Rec'd # Security In At Value Change
2/3/98 24 Microsoft 1878.45 3735.00 $1856.55
6/23/98 34 Cisco Syst 1985.95 3616.75 $1630.80
5/1/98 55.5 Gap Inc. 1890.33 3212.06 $1321.73
2/13/98 22 Intel 1862.83 3066.25 $1203.42
2/3/98 22 Pfizer 1810.58 2545.13 $734.55
8/21/98 44 Schering-P 2111.7 2307.25 $195.55
2/6/98 56 T. Rowe Pr 1885.70 1898.75 $13.05
5/26/98 18 AmExpress 1873.20 1809.00 -$64.20
2/27/98 27 Coca-Cola 1865.89 1729.69 -$136.20
Foolish Four Stocks
Rec'd # Security In At Value Change
3/12/98 17 General Mo 1230.89 1496.00 $265.11
3/12/98 20 Exxon 1286.70 1421.25 $134.55
3/12/98 20 Eastman Ko 1262.95 1375.00 $112.05
3/12/98 15 Chevron 1250.14 1208.44 -$41.70
CASH $120.62
TOTAL $29541.18
Note: On 8/4/98 $2,000 cash was added to the
portfolio. $2,000 will be added every six months.
