Boring Portfolio Report
Thursday, October 10, 1996
by Greg Markus (MF Boring)
ANN ARBOR, Mich. (Oct. 10) Another day, another loss. This is getting tedious, tiresome, ennui-inducing ... boring, even.
Traders were spooked by (what else?) a jobless claims report suggesting that the domestic economy might not be sufficiently stalled to suit the Fed, which might be prompted to hike interest rates, especially once that little matter of a presidential election is out of the way.
At the same time, the leading edge of the tidal wave of third quarter earnings report had other folks worried about slowing earnings growth. Man, if it's not one thing, it's somethin' else.
In any event, the Dow fell for the fourth straight day, off 9 points. The S&P 500 slipped 0.34%, and the Nasdaq shaved off a point (0.08%).
As for the Boring Portfolio, it took the booby prize, sliding 0.72% in net value. Three Boring stocks rose -- Carlisle, Cisco, and Prime Medical -- while the other five lost ground, including Oxford Health, which fell out of bed for a $2 1/8 loss (on the bid) with over 2 million shares trading hands.
There is no specific news on Oxford Health today, and so I'm unable to say with any confidence just why the stock fell. I note that Oxford's main competitor, Aetna, announced a slew of lay-offs as part of a restructuring intending to make the new Aetna/US Healthcare combo a lean, mean healthcare machine as it prepares to do battle with Oxford. A WSJ "Heard on the Street" column this morning that pointed to weakness among healthcare stocks this year probably didn't help things much either.
Perhaps most significant, though, (to my eye, at least) was a report in the LA Times that the Clinton administration has invited Congressional Republicans to meet immediately after the elections to help devise "a quick, bipartisan fix" to keep Medicare afloat. The objective would be to chop $100 billion from projected Medicare spending over the next few years by trimming the growth of payments to doctors, hospitals and (ahem) "other health care providers."
Texas Industries continued its skid from the mid-60s to, today, the mid-50s. I don't much like it, and I don't really see much reason for it. A wire service item yesterday reported that TXI's treasurer, Ken Allen, purchased 500 shares on the open market at a price of $62 late last month. Ken handles investor relations duties for TXI, and he and I have had a fair number of conversations in the past month or so about the stock and the company. Apparently, he thought the stock was a good buy at $62, and so do I.
TXI's annual shareholder's meeting takes place next week (October 15). I'll be looking forward to hearing what the company has to say and will, as always, report back here.