Boring Portfolio

Boring Portfolio Report
Wednesday, January 22, 1997
by Greg Markus (MF Boring)

ANN ARBOR, Mich. (Jan. 22) -- The Nasdaq had another great session on Wednesday, rising 11 points, or 0.80%, to set another record. Nasdaq trading volume exceed 700 million shares. On the NYSE, volume of 585.7 million shares made it the sixth busiest day ever for that exchange. The S&P 500 established a new high mark, gaining 0.44%.

Not so for the Dow, however, which lost 34 points, dragged down by weakness in IBM and AT&T. Not so for the Boring Portfolio, either, which fell 0.29% as six of nine holdings closed lower.

Cisco (Nasdaq: CSCO) fell $1 1/8, which I'll chalk up to that ready excuse of "profit-taking," following the stock's recent push into the $70s.

Cisco's stock may have lost a little ground today, but the company continues to race ahead. Cisco today announced plans to integrate 56Kbps modem technology into its line of dial-access products, beginning with its AS5200 dialup server in the first half of this year. Cisco will incorporate technology from Lucent and Rockwell.

Cisco also announced a new Network Processor Module (NPM) for the Cisco 4500 and Cisco 4700 access routers. You may recall that just a few days earlier Cisco introduced a new line of routers for SOHO (small office / home office) folks. Well, the 4500 and 4700 routers are on the other end of the continuum, intended for the large regional office. The new modules sport two high speed serial ports and 16 lower-speed ports. The latter are individually configurable as either synchronous ports for Wide Area Network (WAN) aggregation at speeds up to 128 kbps or as asynchronous ports for modems, terminals, networked toasters or whatever, at speeds up to 115 kbps.

According to the press release, you can dress up your 4500 or 4700 router with two of these modules and be able to support as many as 36 synchronous ports, a significant advance over the previous max of eight ports. Cisco says you can get the new module directly from Cisco starting next month at a list price of $8,800. But, hey, if you tell 'em The Motley Fool sent you, maybe Cisco would shave a few bucks off that price. Worth a try, right?

Tidewater (NYSE: TDW) continued to recede today, following yesterday's upside surprise earnings report. TDW dropped $1 1/2 on trading volume of 1.2 million shares -- triple the activity seen in an average session.

As was the case yesterday, Tidewater was hardly alone among oil drilling and services stocks in getting greased. Baker Hughes and BJ Services, two other outfits in the group that just posted earnings, fell sharply on heavy volume, as did Ensco International, Transocean Offshore, Global Marine, Schlumberger ... pretty much the whole group, really.

More profit-taking associated with an "it just couldn't be better than this" mentality? I have no idea. What I do know is that Tidewater's executives reported that the trend in their business continues to be up, and strongly so.

Continuing the roll call of today's Borefolio losers, Oxford Health Plans (Nasdaq: OXHP) suffered a relapse, dropping $7/8 after having perked up a bit the day before. The story remains the same: how will President Clinton's proposals for trimming the government's Medicare expenses affect HMOs?

The irony, of course, is that the push to move seniors out of traditional fee-for-service and into managed care has been the saving grace of Medicare and Medicaid for the past few years. Now, it appers that the President -- and perhaps the Congress -- will risk reversing that trend by shaking down the HMOs. For their part, HMOs like Oxford would appear to hold a few trump cards.

First, should the Feds get too pushy, the HMOs could simply decide to ratchet back on accepting new Medicare members, which would almost certainly have the net effect of driving total Medicare costs up. Alternatively, the HMOs could trim back on the features they currently provide Medicare members, such as prescriptions coverage or preventive care programs, which would help HMOs margins but would probably help neither the elderly nor the government's total medical costs. Or, HMOs could hike fees for their non-Medicare members.

As an individual with a family that has been enrolled in an HMO for years and with a mother and mother-in-law in Medicare, none of these alternatives sounds particularly appealing. Better all-around, I would think, would be for the President and Congress to continue along the road that has helped cut the growth in Medicare budgets in the 1990s -- that is, encourage rather than discourage the elderly to move out of fee-for-service and into managed care.

At the same time, it might not hurt to consider asking whether some of the retirees in Bal Harbour could kick in a bit more to cover their own medical costs rather than having the waitress at Tony Roma's subsidize them.

Hey, I'm just asking.

Today's Numbers

Stock  Change    Bid
BGP   +1 1/8   38.25
CSL   -  3/4   30.25
CSCO  -1 1/8   73.63
GNT   -  1/4   39.75
ORCL  +  5/8   42.25
OXHP  -  7/8   52.38
PMSI  +  1/4   11.38
SLR   -  1/8   59.38
TDW   -1 1/2   48.75
                  Day   Month    Year  History
        BORING   -0.29%   4.00%   4.00%  19.67%
        S&P 500  +0.44%   6.14%   6.14%  26.48%
        NASDAQ:  +0.80%   7.52%   7.52%  33.34%

    Rec'd   #  Security     In At       Now    Change

  2/28/96  200 Borders Gr    22.51     38.25    69.91%
  6/26/96  100 Cisco Syst    53.90     73.63    36.60%
   2/2/96  200 Green Tree    30.39     39.75    30.81%
  8/13/96  200 Carlisle C    26.32     30.25    14.91%
   3/8/96  400 Prime Medi    10.07     11.38    12.97%
  5/24/96  100 Oxford Hea    48.02     52.38     9.06%
 10/15/96  100 Solectron     54.52     59.38     8.90%
 12/23/96  100 Tidewater     46.52     48.75     4.78%
 11/21/96  100 Oracle Cor    48.65     42.25   -13.16%

    Rec'd   #  Security     In At     Value    Change

  2/28/96  200 Borders Gr  4502.49   7650.00  $3147.51
  6/26/96  100 Cisco Syst  5389.99   7362.50  $1972.51
   2/2/96  200 Green Tree  6077.49   7950.00  $1872.51
  8/13/96  200 Carlisle C  5264.99   6050.00   $785.01
   3/8/96  400 Prime Medi  4027.49   4550.00   $522.51
 10/15/96  100 Solectron   5452.49   5937.50   $485.01
  5/24/96  100 Oxford Hea  4802.49   5237.50   $435.01
 12/23/96  100 Tidewater   4652.49   4875.00   $222.51
 11/21/96  100 Oracle Cor  4864.99   4225.00  -$639.99

                             CASH   $5999.08
                            TOTAL  $59836.58