Boring Portfolio Report
Tuesday, July 22, 1997
by Greg Markus
(TMFBoring)
ANN ARBOR, Mich. (July 22, 1997) -- Fed Chairman Alan Greenspan offered his characteristic "on the one hand, on the other hand" observations on the state of the U.S. economy this afternoon. In his semiannual testimony to Congress, Greenspan said that economic growth appeared to be slowing somewhat from the pace set earlier in the year but that the Fed remained vigilant and ready to "tap on the brakes" should the need arise.
Greenspan made no comments about stock market exuberance, irrational or otherwise, however -- and the market apparently took that as sufficient excuse for a bit of, well, exuberance.
Irrationally so? Hey, the Boring Portfolio is not about to look a gift Chairman in the mouth.
All nine of its holdings rose, sending the Borefolio higher by 1.83% to establish a new record at $69,470.
CARLISLE COMPANIES (NYSE: CSL) continued its post-earnings surge, gaining $1 5/16 on good volume and setting a new high at $39 1/2.
TIDEWATER (NYSE: TDW) swelled $1 9/16 to $49 1/4 following the company's report this morning of its results for the June quarter. Earnings of $0.83 per share easily beat analysts' consensus estimate of $0.76 and came within a penny of hitting the high end of a range that extended from $0.68 to $0.84, according to First Call.
In a press release, Tidewater said that day rates for the company's service vessels have been increasing globally and that the trend should continue. In the follow-up conference call, management backed up that up by rattling off a long list of recently negotiated contracts sporting very favorable terms for Tidewater.
During the quarter, Tidewater completed its acquisition of O.I.L. Ltd. and its fleet of 100 vessels. In addition, Tidewater bought out a partner's half-interest in nine boats in Australian waters and purchased five standby vessels. Tidewater has thus expanded its fleet by nearly 50% over the past 14 months without building any new vessels that would add to global capacity, and the company reiterated that it has no intention of launching any program of new construction.
The Motley Fool will provide a summary of Tidewater's conference call shortly.
ORACLE (Nasdaq: ORCL) gained $1 11/16. Yesterday's Borefolio recap offered some thoughts from software industry veteran Bob Sutton about the reasoning behind Oracle's controversial advocacy of the Network Computer.
Sutton said it is a mistake to think of the NC as a "vanity project" for Oracle founder, chair, and CEO Larry Ellison. Nor is it merely a manifestation of a personal grudge match between Ellison and Bill Gates of MICROSOFT (Nasdaq: MSFT).
Instead, the heart of the NC strategy is to attack the high operating costs associated with the Wintel paradigm in the corporate world -- particularly in areas where a full-fledged PC might not make economic sense, such as for travel agents, bank clerks, sales staff, help desks, and perhaps K-12 education.
Motley Fool writer Nico Detourn (TMF Nico) conceded many of Sutton's points but still questioned whether, from a users' standpoint, what would make "the Orasun [i.e., Oracle and ally SUN MICROSYSTEMS (Nasdaq: SUNW)] centralized management scheme any better than the Wintel monopoly? In particular, why would I choose to have all my stuff stored in the Orasun warehouse rather than on my Wintel-colonized desktop?"
Contributor "LML200" replied that for many individual users, the NC might not make much sense. But for many corporate users, it would. "The strategy for the NC is not to substitute a different system, but rather to offer an alternative where such an alternative makes sense.
"Why have 5,000 different hard drives storing and managing data in the workplace where one database can do the job more efficiently and at less cost?" LML200 continued. "If you're the one buying the computer for the workplace, you'd buy the PC. You want that localized control of your data. But where corporate networks are concerned, you're not the one shoving out the cash for the technology; the corporation is. From a corporate point of view, centralization of data is desirable, not to mention the economic savings realized by the purchase of a large number of thin-clients vs. PCs."
Okay. But where does Oracle stand to make a buck on this? Oracle's not in the hardware business -- and almost certainly doesn't intend to get into it.
Back to Bob Sutton. Sutton, who worked at Oracle for a number of years, wears no rose-colored glasses when it comes to viewing the NC. As he sees it, "the NC is just another front in Oracle's war for industry dominance. It might be a sideshow to the real game, but it has already stirred a debate regarding the limits to Microsoft's impending hegemony, and corporate MIS executives are listening. For this, I'll award a point to Ellison.
"The real question is this: is there a broad corporate market for a low-cost network appliance capable of interactively reading, writing, and updating shared information using the familiar screen navigation techniques around which our contemporary software expectations are organized? And if there is such a market, can a database software company steer that market in such a way that the resulting products make that company's database software more valuable?"
Stated somewhat differently (and this is me doing the restating, not Sutton): Is the so-called "thin client" at least in part a Trojan Horse designed to entice corporations over to "fat servers" larded up with Oracle software and in need of periodic tweaking by Oracle service teams?
The Boring recap will offer some thoughts on that question tomorrow, in the
final installment of "Orasun vs. Wintel."
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Stock Change Bid ATLS + 13/16 23.13 BGP + 1/16 25.50 CSL +1 5/16 39.50 CSCO +2 1/8 78.81 GNT + 1/8 42.00 ORCL +111/16 56.81 OXHP +1 3/4 84.75 PMSI + 1/4 11.88 TDW +1 9/16 49.25
Day Month Year History
BORING +1.83% 7.98% 20.74% 38.94%
S&P: +2.30% 5.52% 26.09% 50.25%
NASDAQ: +1.80% 8.45% 21.13% 50.23%
Rec'd # Security In At Now Change
2/28/96 400 Borders Gr 11.26 25.50 126.54%
5/24/96 100 Oxford Hea 48.02 84.75 76.47%
8/13/96 200 Carlisle C 26.32 39.50 50.05%
6/26/96 100 Cisco Syst 53.90 78.81 46.22%
2/2/96 200 Green Tree 30.39 42.00 38.21%
3/8/96 400 Prime Medi 10.07 11.88 17.94%
11/21/96 100 Oracle Cor 48.65 56.81 16.78%
12/23/96 100 Tidewater 46.52 49.25 5.86%
3/5/97 150 Atlas Air 23.06 23.13 0.29%
Rec'd # Security In At Value Change
2/28/96 400 Borders Gr 4502.49 10200.00 $5697.51
5/24/96 100 Oxford Hea 4802.49 8475.00 $3672.51
8/13/96 200 Carlisle C 5264.99 7900.00 $2635.01
6/26/96 100 Cisco Syst 5389.99 7881.25 $2491.26
2/2/96 200 Green Tree 6077.49 8400.00 $2322.51
11/21/96 100 Oracle Cor 4864.99 5681.25 $816.26
3/8/96 400 Prime Medi 4027.49 4750.00 $722.51
12/23/96 100 Tidewater 4652.49 4925.00 $272.51
3/5/97 150 Atlas Air 3458.74 3468.75 $10.01
CASH $7788.54
TOTAL $69469.79
