The Boring Portfolio

ANN ARBOR, MI, June 17, 1996 -- Last week's slide in stocks continued on Monday as both the S&P 500 and the NASDAQ closed lower. Trading volume was relatively light, and basically not a whole lot happened on what was a slow beginning to a "triple-witch" week. The Boring Portfolio lost just over one-quarter of a percentage point in net value -- a bit better than the NASDAQ, a bit worse than the S&P.

Last week, I noted that I hoped to invest the balance of the Borefolio's cash reserves in stocks as soon as possible. Accordingly, I've been searching the Motley Fool stock folders, my Value Line volumes, Investor's Business Daily, and a dozen or so other sources for leads. Next stop for me is the SEARCH button at the bottom of the Motley Fool main screen on AOL, to research the prospects I've identified more closely.

A click on the SEARCH button gives you access to essential information that was virtually unavailable to individual investors barely a year or two ago: recent press releases and wire service news on companies, up to date summaries of analysts' earnings projections, stock profiles and histories, access to the Security and Exchange Commission's searchable EDGAR WWW-site for downloading of full SEC filings from thousands of companies, historical stock quotes (if you're Wintel-based, as I am not), and so on.

While you're out on the Web, search around a bit and you'll find that more and more companies are establishing their own Websites. Some of those sites are pretty bare at the moment, but others are packed with useful and interesting info -- about the company, its products and services, and more. Many sites include recent press releases. Some have full quarterly and annual reports ready for viewing or downloading. Nearly all permit you to e-mail the company directly to request additional investor information.

This is the algorithm I've gone through with perhaps three dozen stocks over the week-end, and I've narrowed the list of candidates down to a handful, one or two of which I expect to buy for the Borefolio within the next week or so.

As for the current Borefolio holdings, there's no significant news to report. Some insider selling has occurred recently at a number of companies -- TXI, LCSI, and PMSI, in particular. None of it is particularly surprising or consequential. The magnitude of selling by PMSI founders (which was announced some months ago and is progressing according) may be part of the reason for the sag in PMSI's share price appreciation recently, however. No big deal.

Lastly, what with another big feature on Iomega in the Wall Street Journal this morning, folks may have flipped right past a story on the bottom of C-1 headlined, "Demand for Asset-Backed Securities Soars." Although Borefolio holding Green Tree Financial was nowhere mentioned, the story is worth reading, especially the part about how "Last week alone, nearly $6 billion in asset-backed securities ... were sold by underwriters to yield-hungry investors." Folks, that's exactly the way Green Tree made earnings grow at 36% per year over the past 5 years -- and how it will continue to flourish for a long time yet.

Transmitted: 6/17/96