Boring Portfolio

Boring Portfolio Report
Monday, March 3, 1997
by Greg Markus (MF Boring)

ANN ARBOR, Mich. (March 3, 1997) -- This first trading day of March smiled upon big-cap stocks today, nodded pleasantly to middle-sized issues, and largely ignored the small fry. The Dow Jones Industrial Average rose 0.60%, the S&P 500 gained 0.57%, and the, uh,"technology-laden" Nasdaq Composite managed to post a 0.17% advance.

"Laden" is the word for it. The weight of technology stocks hangs heavy on the neck of the Boring Portfolio. Altogether the portfolio shed a bit more than one percent in net asset value Monday, and it would have been worse yet had not the accumulated interest and dividends from the month of January made it into the Borefolio account today.

CISCO SYSTEMS (Nasdaq: CSCO) continued lower, actually falling at one point below the price at which I purchased the stock last June. At day’s end, Cisco stood -- sort of -- at $54 1/8 on the bid, down $1 1/4. The stock of the leading company in one of the fastest growing industries on earth is now trading at a multiple to 1997 earnings comparable to that of certain soda pop purveyors and soap manufacturers. At some point, a market in love with perhaps two dozen stocks out of 7,000 surely must correct this discrepancy.

Cisco announced today that it has taken a minority equity interest in privately-held based in Santa Barbara, California. Cisco and have agreed to develop and market networking technology to provide scalable dynamic Internet address allocation and secure networked commerce. According to the press release, customers will be able to use the new technology to scale their online networked services -- including remote access, telecommuting, networked commerce and email -- while maintaining a high level of security and reliability.

ORACLE CORP. (Nasdaq: ORCL), another of the Borefolio’s troubled tech holdings, had an announcement of their own today. Oracle said it has begun the final phase of its beta-test of Oracle8, the company's long-awaited object-relational database software. According to the press release, the Oracle8 server is being shipped to more than 170 beta program participants in 28 countries who will use Oracle8 to develop and test an array of applications on seven different hardware platforms.

Oracle is also making its "Sedona" object-oriented development environment available to a subset of beta testers. Sedona is intended to allow developers to build special-purpose software components or "cartridges" to work with Oracle8. New versions of Oracle's client/server and Web application development tools, will be available to utilize along with Oracle8.

The company says that more than 1000 Oracle staff are trained to provide technical support and consulting services to customers implementing the new systems. After being down for much of the day, Oracle shares managed to gain $1/8.

I’ll take it.

SOLECTRON (NYSE: SLR) is the third Borefolio technology holding. The stock of this Baldrige prize-winning company, the leader in electronic systems design and assembly, flopped $2 7/8 -- on absolutely no news that I could find. At its current price, Solectron stock is trading at less than a market multiple to its projected earnings for its half-completed fiscal year, ending in August -- and this for share in a company expected to grow EPS 26% this year and 25 to 30 percent over the longer haul.

The mind boggles.

Speaking of boggling, TIDEWATER (NYSE: TDW) is boggling around, drifting 10% from where I purchased the stock just before Christmas. Crude oil prices dipped below to $20 mark the other, triggering continued selling of oilpatch stocks. TDW sunk $1 1/8.

One might have thought that the omniscient market might have discounted the fact that the weather often starts warming up in the Northern Hemisphere ‘round about this time of year. Even a toasty warm, energy-efficient world needs oil and gas, and offshore drillers need Tidewater’s fleet of offshore support vessels.

Should I sell some of these troubled issues?

Sell?? Heck, if I had the money, I’d be buying.

Hey! I do have the money! When the going gets tough, the tough go shopping. And that’s what I intend to do. Stop by tomorrow, and I'll let you know what I'm gonna buy.

(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.

Today's Numbers

Stock  Change    Bid
BGP   -  1/8   42.00
CSL   -  1/4   32.50
CSCO  -1 1/4   54.13
GNT   -  1/8   37.38
ORCL  +  1/8   39.38
OXHP  ---      55.50
PMSI  -  1/4   10.88
SLR   -2 7/8   50.00
TDW   -1 1/8   41.88
                   Day   Month    Year  History
        BORING   -1.03%  -1.03%  -1.05%  13.87%
        S&P:     +0.57%   0.57%   7.37%  27.94%
        NASDAQ:  +0.17%   0.17%   1.56%  25.96%

    Rec'd   #  Security     In At       Now    Change
  2/28/96  200 Borders Gr    22.51     42.00    86.56%
  8/13/96  200 Carlisle C    26.32     32.50    23.46%
   2/2/96  200 Green Tree    30.39     37.38    22.99%
  5/24/96  100 Oxford Hea    48.02     55.50    15.57%
   3/8/96  400 Prime Medi    10.07     10.88     8.01%
  6/26/96  100 Cisco Syst    53.90     54.13     0.42%
 10/15/96  100 Solectron     54.52     50.00    -8.30%
 12/23/96  100 Tidewater     46.52     41.88    -9.99%
 11/21/96  100 Oracle Cor    48.65     39.38   -19.06%

    Rec'd   #  Security     In At     Value    Change
  2/28/96  200 Borders Gr  4502.49   8400.00  $3897.51
   2/2/96  200 Green Tree  6077.49   7475.00  $1397.51
  8/13/96  200 Carlisle C  5264.99   6500.00  $1235.01
  5/24/96  100 Oxford Hea  4802.49   5550.00   $747.51
   3/8/96  400 Prime Medi  4027.49   4350.00   $322.51
  6/26/96  100 Cisco Syst  5389.99   5412.50    $22.51
 10/15/96  100 Solectron   5452.49   5000.00  -$452.49
 12/23/96  100 Tidewater   4652.49   4187.50  -$464.99
 11/21/96  100 Oracle Cor  4864.99   3937.50  -$927.49

                             CASH   $6121.70
                            TOTAL  $56934.20