Boring Portfolio

Boring Portfolio Report
Wednesday, October 1, 1997
by Greg Markus (

ANN ARBOR, Mich. (Oct. 1, 1997) -- The Dow and S&P 500 each ran up nearly nine-tenths of a percentage point Wednesday, with the Dow closing above the 8000 mark for the first time since mid-August.

The Nasdaq closed higher by 5 points, or 0.27%, after being down for a good part of the day. Nasdaq volume approached 1 billion shares, easily surpassing the old record for the most active session thanks in part to enormous interest in shares of WORLDCOM (Nasdaq: WCOM) and MCI COMMUNICATIONS (Nasdaq: MCIC) after the former launched a surprising effort to acquire the latter.

The Boring Portfolio, alas, suffered its third consecutive loss, falling 1.00%. Had it not been for a $7/8 advance by stalwart CARLISLE COMPANIES (NYSE: CSL), the entire Borefolio lineup would have whiffed today.

Softness in our two healthcare holdings have accounted for most of the Borefolio's losses so far this week, and today was no exception. PRIME MEDICAL SERVICES (Nasdaq: PMSI) dipped $3/8 in unremarkable trading and no news. Meantime, OXFORD HEALTH PLANS (Nasdaq: OXHP) slumped $3 1/8 on above-average volume.

A story in today's Wall Street Journal detailed problems that some HMOs have experienced lately in paying medical claims. Although the story didn't mention Oxford by name, it said that New Jersey state regulators have announced a voluntary agreement with 10 major HMO companies under which the HMOs must pay fully documented, or "clean," claims within 60 days of receipt or else pay 10% late fees and possibly face fines of as much as $1,000 per violation. Oxford is a leading HMO in New Jersey, and so presumably the agreement applies to them.

If anyone sold their Oxford shares based on this news -- and of course I have no way of knowing whether anyone did -- then they may have overlooked the fact that in August Oxford voluntarily extended to New Jersey and Connecticut the agreement the company had stuck with the State of New York guaranteeing payment of clean claims within 30 days, not 60.

At that time, Oxford management said the company was turning around well over 90% of clean claims within 30 days and intended to reach 100% compliance very soon. Indeed, Oxford had taken the extraordinary step of advancing cash to some providers in advance of processing the claims, and recently Oxford said is it actually receiving refunds of excess advances from providers.

Moving on, BORDERS GROUP (NYSE: BGP) stock dropped $3/4 to $26 3/4. I saw no news on Borders, but Merrill Lynch issued a report on rival BARNES & NOBLE (NYSE: BKS), naming B&N its "Focus 1" stock of the week. Perhaps good news for B&N was interpreted by some folks as bad news for Borders?

Finally, shares of CISCO SYSTEMS (Nasdaq: CSCO) eased $5/16 despite an upgrade to "outperform" from "perform in line" by an analyst at Schroders.

For its part, Cisco announced an $18 million initiative to establish networking laboratories for an estimated 400 U.S. schools. During the coming year, the Kid plans to train instructors at 40 regional Cisco Networking Academies, with each regional center responsible for training and supporting teachers at 10 high schools, community colleges, or technical schools in their regions. Cisco will also contribute networking gear for the labs.

The program is already underway in 57 schools in Arizona, California, Florida, Minnesota, Missouri, New York and North Carolina. By the start of the 1998 school year, it is expected to be operational in all 50 states.

Students who complete the two-year program will be prepared to pass an exam certifying them for the position of network administrator, a job that pays an average of $43,000 to $67,000 a year, according to a recent survey conducted by Computerworld magazine.

So if your sons and daughters are wondering what to be when they grow up, maybe Cisco has an idea for them? Or, with apologies to Waylon Jennings, "Mammas, please let your babies grow up to be net czars."

Drip Portfolio -- Health Care companies.
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Stock  Change    Bid
ATLS  -  1/8   27.88
BGP   -  3/4   26.75
CSL   +  7/8   45.31
CSCO  -  5/16  72.75
GNT   -  1/16  46.94
ORCL  -  7/16  36.00
OXHP  -3 1/8   71.75
PMSI  -  3/8   13.50
TDW   -  1/8   59.13
                   Day   Month    Year  History
        BORING   -1.00%  -1.00%  25.80%  44.77%
        S&P:     +0.86%   0.86%  28.98%  53.70%
        NASDAQ:  +0.28%   0.28%  30.93%  62.38%

     Rec'd   #  Security     In At       Now    Change
  2/28/96  400 Borders Gr    11.26     26.75   137.65%
  8/13/96  200 Carlisle C    26.32     45.31    72.13%
   2/2/96  200 Green Tree    30.39     46.94    54.46%
  5/24/96  100 Oxford Hea    48.02     71.75    49.40%
  6/26/96  100 Cisco Syst    53.90     72.75    34.97%
   3/8/96  400 Prime Medi    10.07     13.50    34.08%
 12/23/96  100 Tidewater     46.52     59.13    27.08%
   3/5/97  150 Atlas Air     23.06     27.88    20.89%
 11/21/96  150 Oracle Cor    32.43     36.00    11.00%

     Rec'd   #  Security     In At     Value    Change
  2/28/96  400 Borders Gr  4502.49  10700.00  $6197.51
  8/13/96  200 Carlisle C  5264.99   9062.50  $3797.51
   2/2/96  200 Green Tree  6077.49   9387.50  $3310.01
  5/24/96  100 Oxford Hea  4802.49   7175.00  $2372.51
  6/26/96  100 Cisco Syst  5389.99   7275.00  $1885.01
   3/8/96  400 Prime Medi  4027.49   5400.00  $1372.51
 12/23/96  100 Tidewater   4652.49   5912.50  $1260.01
   3/5/97  150 Atlas Air   3458.74   4181.25   $722.51
 11/21/96  150 Oracle Cor  4864.99   5400.00   $535.01

                             CASH   $7890.00
                            TOTAL  $72383.75