Boring Portfolio

Boring Portfolio Report
Thursday, October 16, 1997
by Mark Weaver, MD (

St. Louis, MO (Oct 16, 1997) -- This was a very lackluster day for U.S. stock investors as the market took a pounding. The day started off in good order with a lower than expected gain in consumer prices and a report from the Philadelphia Fed that manufacturing pressures had decreased. This news led to a rally in bonds. However, the rally failed and as the bonds retraced their gains, and stocks moved lower.

Consumer prices are increasing at the lowest rate in 30 years. While this is good news for many of us, Social Security recipients were given the news today that their checks will increase only 2.1% next year. That amounts to an average monthly increase of $16.

The earnings report season continues to be choppy with a negative surprise today from Merck and a hint of trouble ahead from Sears. Technology stocks were particularly hard hit on the heels of Intel's disappointing showing yesterday. Computer stocks were particularly hard hit even though Compaq bested estimates.

The coupe de grace came late in the day as trade tensions with Japan heated up. The Federal Maritime Commission voted to ban Japanese cargo ships from U.S. ports and told the Customs Service to detain any Japanese ships currently in port. It is hard to believe that this is more than political posturing, but uncertainty moves markets and move they did.

When all was said and done the S&P 500 lost 1.08%, the Nasdaq Composite lost 1.38%. Bolstered by a heavy cash position the Borefolio lost only 0.87% and moved back to within 0.01% of the S&P's year to date return. This wasn't a pretty day.

Today there was absolutely no news on any Borefolio stock. In spite of the absence of substantive news seven stocks fell and only two were up.

One of the Borefolio stocks gaining ground was GREEN TREE FINANCIAL (NYSE: GNT) which was up $1/2. The company reported earnings ahead of expectations yesterday. Greg has posted the Green Tree conference call report. It makes for interesting reading. Green Tree has matched or exceeded expectations in every aspect of its business.

Greg is working on the CARLISLE COMPANIES (NYSE: CSL) conference call report and will post it in the near future. Carlisle also bested estimates yesterday but the stock continued to swoon today, down $5/8. A quick look at the PEG on CSL shows it to be trading a bit above "fair value." Even great stocks need an occasional breather.

CISCO SYSTEMS (Nasdaq: CSCO) was down $1 9/16. No technology issue was safe today even though there was no news affecting any of the major networking stocks. Expect rough sledding for tech stocks again tomorrow as, after the bell, SUN MICROSYSTEMS (Nasdaq: SUNW) reported earnings of $0.41 versus consensus expectations of $0.44.

OXFORD HEALTH PLANS (Nasdaq: OXHP) continued its practice of moving more than a point per day, as today it was down $1 1/8. Oxford will probably remain volatile until earnings are reported early next month. Check that... Oxford will probably continue to be volatile even after that report, if the past is any indication. You need to fasten your seat belt if you are going to ride the "Ox."

TIDEWATER (NYSE: TDW) was the other big Borefolio loser, down $1 3/16. Oil prices were up a bit today but oil services stocks continue under pressure after a big runnup in September. Most of the oil services companies reporting earnings have been coming in ahead of expectations. This seems to be a situation where surprises were expected and weren't "enough."

There has been a recent discussion in Washington of a rather steep tax on gasoline as a measure to diminish gasoline consumption and subsequently auto emissions. The tax is aimed at cutting down on greenhouse gases and ultimately easing global warming. This discussion may also be weighing on oil service stocks as the bullish argument for these shares hinges on continued increases in oil consumption.

In case readers aren't aware there is excellent discussion of the Borefolio stocks, Boring investing and new Boring stock ideas over in the Boring Stocks message folder. Greg is diligently looking for ways to spend the Borefolio cash, and any suggestions from the audience would be much appreciated.

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Stock  Change    Bid
ATLS  -  1/4   27.25
BGP   -  3/8   26.38
CSL   -  5/8   45.75
CSCO  -1 9/16  81.63
GNT   +  1/2   49.00
ORCL  -  1/2   34.38
OXHP  -1 1/8   72.38
PMSI  +  1/16  14.06
TDW   -1 3/16  63.94
                   Day   Month    Year  History
        BORING   -0.87%   1.48%  28.95%  48.38%
        S&P:     -1.09%   0.84%  28.96%  53.67%
        NASDAQ:  -1.38%   0.83%  31.65%  63.28%

    Rec'd   #  Security     In At       Now    Change
  2/28/96  400 Borders Gr    11.26     26.38   134.31%
  8/13/96  200 Carlisle C    26.32     45.75    73.79%
   2/2/96  200 Green Tree    30.39     49.00    61.25%
  6/26/96  100 Cisco Syst    53.90     81.63    51.44%
  5/24/96  100 Oxford Hea    48.02     72.38    50.70%
   3/8/96  400 Prime Medi    10.07     14.06    39.67%
 12/23/96  100 Tidewater     46.52     63.94    37.43%
   3/5/97  150 Atlas Air     23.06     27.25    18.18%
 11/21/96  150 Oracle Cor    32.43     34.38     5.99%

    Rec'd   #  Security     In At     Value    Change
  2/28/96  400 Borders Gr  4502.49  10550.00  $6047.51
  8/13/96  200 Carlisle C  5264.99   9150.00  $3885.01
   2/2/96  200 Green Tree  6077.49   9800.00  $3722.51
  6/26/96  100 Cisco Syst  5389.99   8162.50  $2772.51
  5/24/96  100 Oxford Hea  4802.49   7237.50  $2435.01
 12/23/96  100 Tidewater   4652.49   6393.75  $1741.26
   3/8/96  400 Prime Medi  4027.49   5625.00  $1597.51
   3/5/97  150 Atlas Air   3458.74   4087.50   $628.76
 11/21/96  150 Oracle Cor  4864.99   5156.25   $291.26

                             CASH   $8028.59
                            TOTAL  $74191.09