Boring Portfolio Report
Tuesday, July 29, 1997
by Mark Weaver, MD
(MWEAV)
ST. LOUIS, Mo. (July 29,1997) - It was miserably hot here in the Midwest this past weekend leading to incredibly boring conversations about the weather. The weather has never been a favorite topic of mine but, after a review of some recent financial publications, I've come to find that it is not boring at all!! There are folks in Chicago who live and die by the weather forecast.
Check out these headlines: from Barron's, "Soybeans' Cloudy Future, Bears baited by Sunny Weather Reports," or from Investor's Business Daily, "Weather Talk Boosts Corn, Beans".
Hmmm... if it works for soybeans could it work for Boring?
Since I am always looking for an investing edge I thought that I would check out how the weather might affect the Borefolio holdings and see if weather concerns might not be weighing on the stocks.
BORDERS GROUP (NYSE: BGP) undoubtedly has been aided by the weather. The recent heat wave drove folk's into air conditioned comfort to read more and more books. An early fall and winter could also drive up book sales. However, the promise of cooling weather may have been a damper on the stock, down $3/8 today.
Could there be a more weather sensitive stock than OXFORD HEALTH PLANS (Nasdaq: OXHP)? Heat waves cause heat strokes, cold waves increase pneumonia and ice causes broken legs. Surely adverse weather could lead to an increase in medical costs and will impact the bottom line. The good news for Oxford is that Northeast Current Weather is absolutely sublime. The positive weather effect was noted by traders and OXHP moved up 1/16th.
A diversified company like CARLISLE (NYSE: CSL) surely is weather resistant. However, looking through the product line I note golf cart tires, outdoor recreation tiles and construction supplies. Could Carlisle have a summertime edge? The stock has been strong this season but was unchanged today.
What could make a tree greener than sunny weather? Do you think GREENTREE FINANCIAL (NYSE: GNT) has surged due to the recent outstanding earnings report or due to the balmy summertime weather? Today the weather was pretty nice and Greentree was up $1 1/16. Oh yeah, interest rates were lower as well.
The Borefolio's two technology holdings ORACLE (Nasdaq: ORCL) and CISCO SYSTEMS (Nasdaq: CSCO) have no correlation to the weather whatsoever. I can say that with absolute confidence because these were the only stocks with any regular news today. Cisco anounced cooperative agreements with Xircom and Capella Worldwide. Oracle won DCI's "Excellence in Business Information" award. Who needs weather when you have news! Both stocks rose.
Kidney stones are more common in hot weather so I would expect to see that PRIME MEDICAL SERVICES (Nasdaq: PMSI) had surged. Such is not the case. I suspect there is another weather force at work here -- a stationary low (buying) pressure system. When will this stock ever move? Not today, that's for sure.
TIDEWATER (NYSE: TDW) demands that an investor scour the weather report. From the Tidewater message board on July 20 I find "As Hurricane Danny neared shore, TDW's stock made a large upward move" - there you go! A quick look at the 1997 Hurricane Season Forecast gives me all the reason I need for the $1 7/16 move in Tidewater's price. Some might have thought it was the continued rise in oil prices or the blowout earnings reported by CLIFF'S DRILLING (NYSE: CDG) but I know it was the positive "hurricane effect".
Undoubtedly it was an unexpected cold front that blew in on ATLAS AIR (Nasdaq: ATLS) a couple of weeks ago. Weather watchers might have foreseen this and avoided Atlas' recent air pocket. The Jet Stream appears to have shifted and this may explain the tailwind Atlas shares felt today, up $1 7/16.
Now, I wonder what effect El Nino would have on the Borefolio? I'll spend
some time thinking about that... er, on second thought... I'll spend no time
thinking about that and go out on this spectacular day and play a few holes
of golf.
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Stock Change Bid ATLS +1 7/16 24.88 BGP - 3/8 25.44 CSL --- 41.75 CSCO +1 7/8 79.19 GNT +1 1/16 46.19 ORCL + 1/16 54.50 OXHP + 1/8 83.00 PMSI --- 11.50 TDW +1 7/16 49.50
Day Month Year History
BORING +0.90% 9.74% 22.71% 41.21%
S&P: +0.62% 6.46% 27.21% 51.59%
NASDAQ: +0.56% 9.03% 21.79% 51.05%
Rec'd # Security In At Now Change
2/28/96 400 Borders Gr 11.26 25.44 125.99%
5/24/96 100 Oxford Hea 48.02 83.00 72.83%
8/13/96 200 Carlisle C 26.32 41.75 58.59%
2/2/96 200 Green Tree 30.39 46.19 52.00%
6/26/96 100 Cisco Syst 53.90 79.19 46.92%
3/8/96 400 Prime Medi 10.07 11.50 14.22%
11/21/96 100 Oracle Cor 48.65 54.50 12.02%
3/5/97 150 Atlas Air 23.06 24.88 7.88%
12/23/96 100 Tidewater 46.52 49.50 6.39%
Rec'd # Security In At Value Change
2/28/96 400 Borders Gr 4502.49 10175.00 $5672.51
5/24/96 100 Oxford Hea 4802.49 8300.00 $3497.51
2/2/96 200 Green Tree 6077.49 9237.50 $3160.01
8/13/96 200 Carlisle C 5264.99 8350.00 $3085.01
6/26/96 100 Cisco Syst 5389.99 7918.75 $2528.76
11/21/96 100 Oracle Cor 4864.99 5450.00 $585.01
3/8/96 400 Prime Medi 4027.49 4600.00 $572.51
12/23/96 100 Tidewater 4652.49 4950.00 $297.51
3/5/97 150 Atlas Air 3458.74 3731.25 $272.51
CASH $7890.00
TOTAL $70602.50
