The Boring Portfolio

PHILADELPHIA, PA June 28, 1996 -- All in all, June was not particularly kind to the stock market, or to the Boring Portfolio. For the month, the S&P 500 managed to eke out a tiny gain (of +0.22%), but the NASDAQ index declined by nearly 5%. As for the Borefolio, it fell 2.26% in net value for the month, a loss that could have been much worse were it not for this week's 2.65% recovery.

In Friday's trading, our collection of stocks rose about one-half a percentage point in value, beating the S&P 500 but well behind the NASDAQ's roaring 19-point (or 1.63%) gain.

This final week of June was an active one for the Boring Portfolio. On Tuesday, I acquired 100 shares of Cisco Systems, the undisputed internetworking infrastructure leader of the world. At $53 5/8 share, I believe I got a good deal. Two days later, I cashed in the Borefolio's 200 shares of LCS Industries, at a price of $12 1/4 -- but not before LCSI had declined over 50% in value from when I originally bought it just three months ago.

The decline in LCSI's price was dramatic, no doubt about it. The financial loss is, however, a blip in the larger scheme of things. With its current holdings in strong companies across an array of industries (and with cash left to acquire additional stock yet), the Borefolio will recover from that loss, no doubt. What I hope is of more lasting significance is the lesson that may be learned from the LCSI experience.

The lesson is that, especially in the case of small companies owned heavily by insiders, it is very important to do one's homework with regard to how those insiders reward themselves -- and the degree to which those rewards may or may not be at odds with the interests of individual investors. Also, if you're an investor (like me) for whom it's important to be able to ask questions and get answers from the company, find out *before you buy* whether the information the company is willing to provide matches what you need to satisfy your own comfort level. If there's a mismatch, you may want to pass on the stock, however compelling its "story" might otherwise be.

With Cisco, for example, investors can find an impressive amount of information at the company's Web-site (http://www.cisco.com) -- about the company, its products, and its financials. Cisco's investor relations is also just an e-mail message away. For such a large and fast-growing outfit, Cisco is admirably responsive to individual shareholders' questions and information needs.

As for Cisco, the stock, it gained $1 7/8 today on volume of 6.5 million shares -- second in volume only to an issue called Iomega. Shaw Group also advanced today, up $3/8, to get back to the price at which I acquired SHAW on April 12. Our big Friday winner, though, was boring Texas Industries, the cement, aggregates, and scrap steel folks in Midlothian, Texas. TXI leaped $3 1/8, on no news that I've been able to locate. I haven't had a chance to reach the company by press time, but I intend to check in with TXI early next week.

Speaking of deadlines, this one is up. So this will have to do it for tonight, this week, and this month.

See you in July!

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Transmitted: 6/28/96