The Boring Portfolio

ANN ARBOR, MI (July 19) -- This historic week in the market, with its record-setting volume and roller-coaster volatility, ended this Friday with the DJIA closing down 37 points, to 5,427. For the week, the Dow lost 84 points, or 1.52%.

The S&P 500 fell 4.8 points on Friday (-0.76%) and 7.5 points for the week, or 1.15%. On Friday, the Nasdaq composite index closed below 1,100, losing over 12 points (-1.09%). For the week, it was down 5.81 points -- or about a half a percentage point.

What's interesting about this is that there's relatively little in the way of hard data to account for the market jitters. According to the various off-line media, traders are worried about all three legs of the stool upon which the market sits: interest rates, corporate earnings, and cash inflows from individual investors (i.e., you and me).

Regarding interest rates, they've been moderating, not rising. Even Fed Chairman Alan Greenspan confessed this week that signs of inflation were few, if that. On the earnings front, a few disappointing quarterly reports and early warnings have grabbed a lot of attention. But the fact of the matter is that of the 222 S&P 500 companies reporting so far this quarter, 57% had *positive* surprises, and another 17% were on target, according to I/B/E/S. As for inflows, they have slacked off a bit, but not noticeably, according to Fidelity and the other biggies that have commented.

A glance at the Boring Portfolio would reveal no evidence whatever that the week was so unsettling. All was placid, calm, ... boring. For Friday, the Borefolio lost a grand total of $37.50 (or -0.07%), despite the fact that six of its seven holdings lost ground. The six losses were generally small, and the one gainer -- Shaw Group -- rocked the casbah, setting a new 52-week high at $25 on volume (Nasdaq-style) of over 300,000 shares.

As for the weekly score, the Borefolio actually *rose* 1.63% -- or $825, not counting accumulated interest on the cash kitty. Speaking of that cash, I announced on Thursday evening that I would be using a chunk of it to purchase Spiders some time in the next few days. "Spiders" are actually Standard & Poor's Depository Receipts (AMEX: SPY) and are a handy way to move spare change into the market buy in effect purchasing an interest in all the stocks of the S&P 500 companies.

There was no news of consequence on any Borefolio stocks today, so let's just leave this report on that happy note of having made a decent gain in a difficult week ... and go watch those opening ceremonies from Atlanta. Your Boring recap writer has one SERIOUS case of Olympic Fever!

(c) Copyright 1996, The Motley Fool. All rights reserved. This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool.

Transmitted: 7/19/96