Boring Portfolio

Boring Portfolio Report
Thursday, March 13, 1997
by Greg Markus (MF Boring)

MARQUETTE, Mich. (March 13, 1997) -- I'm warmly ensconced tonight on the shore of stunningly beautiful Lake Superior, which is disappearing rapidly from view as a major-league snowstorm moves into Michigan's Upper Peninsula.

A million miles away on a small island just east of New Jerey and west of Brooklyn, equities and bond markets took a beating. The Dow closed at its low of the day, off 160 points, or more than 2%. That was the Dow's fourth biggest point loss ever. Or fifth biggest -- Maria and Sue apparently couldn't agree on that. (Yes, they have C-NBC in the Marquette Ramada -- something I haven't been able to get at some upscale hotels in major metro areas.)

For a change, other major market indices actually outperformed the Dow, percentage-wise. The S&P 500 fell "only" 1.83%, while the Nasdaq lost 0.83%.

The culprit was stronger than expected stats on February retail sales (up 0.8%) coupled with a revision in the January number to 1.5% -- triple what was originally reported. With that revision, the phrase "close enough for government work" takes on an entirely new dimension. A lower than anticipated reading on new jobless claims added yet another scare to traders concerned that the Fed might use all this as a justification for hiking interest rates.

Losses in the Boring Portfolio were limited to 0.40%, as strong showings by CISCO SYSTEMS (Nasdaq: CSCO), ORACLE (Nasdaq: ORCL), and CARLISLE (NYSE: CSL) offset losses in six other holdings, while PRIME MEDICAL (Nasdaq: PMSI) held fast.

But enough of this chit-chat. How'd Oracle do?

Answer: They did just fine, hitting the $0.29 consensus EPS number on the head, as compared with the year-ago $0.22. Fiscal third quarter sales of $1.37 billion represented a 35% gain over 1995's Q3, and the increase would have been 39% had it not been for the effect of the strong dollar on currency translation. Operating margins were steady. Prospects for the fourth quarter and on into fiscal '98 look very good, according to company execs.

I've spent the past 90 minutes on the conference call, so tonight's recap will necessarily be brief. I'll be filing a full summary of the conference call tomorrow (probably polishing it up on the flight home).

I suppose it's always possible that some analysts might not be fully satisfied with Oracle's results, but more than one said on the call tonight that he was sure everyone was breathing a sigh of relief.

As noted above, Cisco rebounded nicely, gaining a dollar. My intuition tells me that the "death of networking" story is beginning to bore the media, and so we may expect a round of "networking's death greatly exaggerated" stories soon.

You may remember that in their last conference call, Cisco execs noted that sales in some parts of Asia-Pacific were softer than they might prefer. A news item today from Australia reported that Cisco's managing director in the Land of Oz, one Gary Jackson by name, fired off a letter to the troops to urge them to get in gear and start selling more Cisco stuff. To wit: "To every sales person: get back to the gut-wrenching, fierce, bloody desire to win if you have in any way wandered off to fat-and happy-heaven, because Cisco is not a retirement village."

Good on ya, mate.

I also see that Cisco has acquired a minority interest in a company in wireless LAN technology. I'm interested -- and would like to say more tonight, but this one's gotta get filed before the snow takes the phone lines down.


(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
ATLS  -  5/8   23.25
BGP   -  1/2   41.63
CSL   +  5/8   31.50
CSCO  +1       51.88
GNT   -1       37.00
ORCL  +2       36.13
OXHP  -1 3/8   63.88
PMSI  ---      11.00
SLR   -  7/8   48.13
TDW   - 3/8   43.63
                   Day   Month    Year  History
        BORING   -0.40%  -1.02%  -1.04%  13.88%
        S&P:     -1.83%  -0.16%   6.59%  27.02%
        NASDAQ:  -0.83%  -1.20%   0.18%  24.24%

    Rec'd   #  Security     In At       Now    Change

  2/28/96  200 Borders Gr    22.51     41.63    84.90%
  5/24/96  100 Oxford Hea    48.02     63.88    33.00%
   2/2/96  200 Green Tree    30.39     37.00    21.76%
  8/13/96  200 Carlisle C    26.32     31.50    19.66%
   3/8/96  400 Prime Medi    10.07     11.00     9.25%
   3/5/97  150 Atlas Air     23.06     23.25     0.83%
  6/26/96  100 Cisco Syst    53.90     51.88    -3.76%
 10/15/96  100 Solectron     54.52     48.13   -11.74%
 11/21/96  100 Oracle Cor    48.65     36.13   -25.74%
 12/23/96  100 Tidewater     46.52     43.63    -6.23%

    Rec'd   #  Security     In At     Value    Change
  2/28/96  200 Borders Gr  4502.49   8325.00  $3822.51
  5/24/96  100 Oxford Hea  4802.49   6387.50  $1585.01
   2/2/96  200 Green Tree  6077.49   7400.00  $1322.51
  8/13/96  200 Carlisle C  5264.99   6300.00  $1035.01
   3/8/96  400 Prime Medi  4027.49   4400.00   $372.51
   3/5/97  150 Atlas Air   3458.74   3487.50    $28.76
  6/26/96  100 Cisco Syst  5389.99   5187.50  -$202.49
 11/21/96  100 Oracle Cor  4864.99   3612.50 -$1252.49
 10/15/96  100 Solectron   5452.49   4812.50  -$639.99
 12/23/96  100 Tidewater   4652.49   4362.50  -$289.99

                             CASH   $2662.96
                            TOTAL  $56937.96