Boring Portfolio

Boring Portfolio Report
Thursday, May 15, 1997
by Greg Markus (TMF Boring)

ANN ARBOR, Mich. (May 15, 1997) -- A host of economic statistics released Thursday morning presented a picture sufficiently muddled as to provide the market with room to move in whatever direction traders chose. The collective decision was to keep on keepin' on, as the Dow and S&P 500 each gained 0.7% and established new all-time highs. The Nasdaq Composite Index, helped by the continued recovery of INTEL (Nasdaq: INTC), did twice that well on a percentage basis but still sits well shy of a record.

As does the Boring Portfolio, which added 0.3% to its net value. Four holdings advanced, three declined, and two were unchanged.

BORDERS GROUP (NYSE: BGP) slipped a half-point following a strong quarterly earnings report from the company yesterday. The Motley Fool offers its summary of the Borders conference call in the area devoted to such things.

Perhaps Borders was overshadowed by today's debut of AMAZON.COM (Nasdaq: AMZN) as a public company. AMZN finished the day at $23 1/2, well above its $18 offer price and nearly double the $13 tab that was originally proposed in the March prospectus. The underwriters also added 100,000 shares to the original 3 million-share offering.

Last year, posted a $5.8 million loss on sales of $15.7 million. And the company anticipates "substantial operating losses for the foreseeable future," according to the prospectus. Not only that, expects that "The rate at which such losses will be incurred will increase substantially."

Although I haven't yet purchased anything from, I have spent some time at their website, and I like what I see. There's a good search engine to help you locate books of interest, along with useful reviews and synopses.

I have to wonder, though, what competitive advantage will retain once BARNES & NOBLE (NYSE: BKS) and our own Borders Group ramp up their virtual stores. Being a Boring sort who avoids bleeding-edge ventures as investments, I think I'll stick with Borders. The Amazon can be a dangerous place.

GREEN TREE FINANCIAL (NYSE: GNT) continued its recovery, adding $1 1/8 on the kind of above-average volume that is now beginning to become the average.

Altogether, GNT has gained 21% in one week. In the weeks before that, an unnamed institution or institutions unloaded the stock in multi-hundred-thousand share blocks, driving the price down relentlessly -- and, it now appears, inappropriately.

So the next time someone tells you that the "big boys" know things that the "little guys" (i.e., you and I) don't, you might want to share the Green Tree tale with him.

While you're at it, you might also want to say a word about CISCO SYSTEMS (Nasdaq: CSCO). CSCO picked up $3/4 today to close at a bid of $62 5/8. Less than four weeks ago, that stock hit an intra-day low of $45 1/4 as the institutions bailed out in anticipation of the death of this whole communications networking fad. That works out to better than a 38% gain for CSCO since April 22.

Or mention ORACLE (Nasdaq: ORCL). That stock got clobbered owing to a combination of breathless hype from a deeply troubled, uh, "competitor" and a hiccup in sales in countries where the economies are a bit soft at the moment.

ORCL has climbed from a recent low of $34 7/8 on April 22 to a closing bid of $45 7/8 today: a 32% advance.

Please don't misunderstand. I'm pointing at these recent gains not to gloat or to poke fun at the sellers. My intention is to offer a little lesson -- for me as much as for anyone else.

That lesson is about trusting your own good judgment, provided that you've invested in rock-solid companies and that you've made an effort to do some homework while others around you -- including the hot-shots -- are panicking.

Read the company's SEC filings at the EDGAR website. Discount the "short-term buy," "strong hold," "long-term accumulate" gibberish, but pay proper attention to changes in analysts' consensus earnings estimates, as provided by firms like First Call or Zack's. Read the opinions, hunches, insights, and lies of others in The Motley Fool's stock folders, and offer your own thoughts there for "reality-testing."

And by all means, phone or email the Investor Relations office of the company if you have reasonable questions in search of reasonable answers. They're paid to answer your inquiries.

None of this takes bags of time, and it certainly need not be a regular part of your existence. There are more important -- and enjoyable -- things to do in life.

But when the crunch-times come -- and they always will -- the resources now available to the individual investor make it entirely do-able to arrive at your own sensible investment decisions, to learn something about businesses and finance, and even to enjoy it -- all at the same time.

(c) Copyright 1997, 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.

Stock  Change    Bid
ATLS  -  1/4   27.88
BGP   -  1/2   20.88
CSL   +  1/8   30.13
CSCO  +  3/4   62.63
GNT   +1 1/8   33.38
ORCL  +1 5/8   45.88
OXHP  -  3/4   63.13
PMSI  ---      10.25
TDW   ---      40.38
                   Day   Month    Year  History
        BORING   +0.30%   5.28%   1.14%  16.38%
        S&P:     +0.70%   5.06%  13.65%  35.43%
        NASDAQ:  +1.35%   7.36%   4.84%  30.03%

    Rec'd   #  Security     In At       Now    Change
  2/28/96  400 Borders Gr    11.26     20.88    85.45%
  5/24/96  100 Oxford Hea    48.02     63.13    31.44%
   3/5/97  150 Atlas Air     23.06     27.88    20.89%
  6/26/96  100 Cisco Syst    53.90     62.63    16.19%
  8/13/96  200 Carlisle C    26.32     30.13    14.44%
   2/2/96  200 Green Tree    30.39     33.38     9.83%
   3/8/96  400 Prime Medi    10.07     10.25     1.80%
 11/21/96  100 Oracle Cor    48.65     45.88    -5.70%
 12/23/96  100 Tidewater     46.52     40.38   -13.22%

    Rec'd   #  Security     In At     Value    Change
  2/28/96  400 Borders Gr  4502.49   8350.00  $3847.51
  5/24/96  100 Oxford Hea  4802.49   6312.50  $1510.01
  6/26/96  100 Cisco Syst  5389.99   6262.50   $872.51
  8/13/96  200 Carlisle C  5264.99   6025.00   $760.01
   3/5/97  150 Atlas Air   3458.74   4181.25   $722.51
   2/2/96  200 Green Tree  6077.49   6675.00   $597.51
   3/8/96  400 Prime Medi  4027.49   4100.00    $72.51
 11/21/96  100 Oracle Cor  4864.99   4587.50  -$277.49
 12/23/96  100 Tidewater   4652.49   4037.50  -$614.99

                             CASH   $7660.41
                            TOTAL  $58191.66