Boring Portfolio

Boring Portfolio Report
Wednesday, June 12, 1996

by Greg Markus (MF Boring)

ANN ARBOR, MI, June 12, 1996 -- Yesterday, the monthly Producer Price Index report failed to reveal any appreciable inflation. In response, interest rates dropped a bit, stocks rose a bit ... and then they both reversed course to end the day more or less where they began.

On Wednesday we got to replay the whole scenario, this time with the monthly Consumer Price Index report. Step 1: No inflation. Step two: Yippee! Step three: Sell into the rally. Zzz-z-z-z.

The only new wrinkle today was last night's comparatively bullish semiconductor book-to-bill report, which offered some encouragement to the NASDAQ. (For Randy Befumo's insightful deconstruction of the book-to-bill, please refer to tonight's MF Evening News.) So the NASDAQ index closed higher by 0.38%, while the S&P 500 ended the session down 0.29%. As for the Boring Portfolio, it advanced $125.00, or 0.24%, not counting interest on our $13K cash reserve.

So far this week, there hasn't been a whole lot to say about the Borefolio. Some stocks went up, some stocks went down, no news, yadda, yadda. Today, I actually have a few things to report.

Let's begin by noting Oxford Health Plan's $2 1/8 gain today. The company announced that William M. Sullivan has been promoted to President and Chief Operating Officer, effective July 1. Sullivan previously served as CEO of Oxford Health Plans of New York.

As great a guy as I am sure Bill Sullivan is, I doubt that news of his new job was entirely responsible for the jump in OXHP's share price today. More likely, bargain hunters recognized that the stock is a great buy in the lower $40s and stepped up to the counter, wallets in hand. Nearly 3 million shares of OXHP electrons crossed the NASDAQ wires today. (Full disclosure: I was among those bargain hunters, adding some OXHP to my personal holdings.) Oxford Health ended the session at $44 7/8.

Borders Group was another Borefolio winner on Wednesday. Borders was mentioned twice in this morning's Wall Street Journal. In WSJ's "experts vs. the dartboard" contest, the winner through six months is James Pollock, a portfolio manager at Beacon Investment right here in Ann Arbor (across the street from my wife's dance studio, no less). Pollock's top pick? One guess.

Borders also got mentioned in the WSJ "Insider Trading Spotlight." It was reported there that President G. R. Mrkonic's purchase of $217,000 worth of BGP was among the larger insider purchases reported to the SEC recently. Furthermore, Borders Group's net change of +20% in insider holdings (based on four recent buys and no recent sales) was among the biggest net positive changes of all companies.

Finally, I direct your attention to the dog that didn't bark in the night (as Sherlock Holmes would say): Green Tree Financial. Despite the fact that the long bond fell 25 ticks on Wednesday, boosting the yield at a recent high-water mark of 7.20%, GNT didn't budge. I take that as a positive sign, not that I really needed one. You see, I had just finished reading about Green Tree in the most recent Value Line weekly supplement, and you just have to come away impressed after you look at the company's stats and story. For example, did you know that Green Tree's net profit margin has averaged nearly 35% over the past three years and is projected to do at least as well through the millennium?

Send the names of all other consistent 35% net margin companies my way, please. Take your time. No rush. Zz-z-z-z.

Transmitted: 6/12/96

BGP + 1/4 ...GNT ---...LCSI ---...OXHP +2 1/8 ...
PMSI - 1/8 ...SHAW - 3/8 ...TXI + 1/4 ...
*Scroll down or expand screen for full portfolio accounting
                   Day   Month    Year  History
        BORING   +0.24%  -0.45%   6.22%   6.22%
        S&P 500  -0.29%  -0.01%   7.63%   7.63%
        NASDAQ   +0.38%  -0.65%  18.68%  18.68%
    Rec'd  #   Security     In At       Now    Change
   3/8/96 400 Prime Medic    10.07     17.63    75.02%
  2/28/96 200 Borders Gro    22.51     36.75    63.26%
  1/29/96 100 Texas Indus    54.52     65.38    19.90%
   2/2/96 200 Green Tree     30.39     30.88     1.61%
  5/24/96 100 Oxford Heal    48.02     44.88    -6.55%
  4/12/96 300 The Shaw Gr    18.84     17.38    -7.78%
  3/25/96 200 LCS Industr    26.14     15.00   -42.62%
    Rec'd  #   Security      Cost     Value    Change
   3/8/96 400 Prime Medic  4027.49   7050.00  $3022.51
  2/28/96 200 Borders Gro  4502.49   7350.00  $2847.51
  1/29/96 100 Texas Indus  5449.99   6537.50  $1087.51
   2/2/96 200 Green Tree   6077.49   6175.00    $97.51
  5/24/96 100 Oxford Heal  4802.49   4487.50  -$314.99
  4/12/96 300 The Shaw Gr  5652.49   5212.50  -$439.99
  3/25/96 200 LCS Industr  5227.49   3000.00 -$2227.49
                             CASH  $13299.52
                            TOTAL  $53112.02