Boring Portfolio

Boring Portfolio Report
Thursday, October 23, 1997
by Mark Weaver, MD (

St. Louis, MO (Oct. 23, 1997) -- What an awful day for equities markets around the world. Currency worries and a subsequent stock market "crash" in Hong Kong sent worldwide markets reeling. The U.S. equities markets were down right out of the gates and finished the day in about the same shape. It was pretty ugly out there. There was a "flight to quality" rally in the bond market as yields dropped to 6.32%. A greater-than-expected increase in jobless claims also comforted those lovers of bad news, bond traders.

Some sense of serenity came to this writer upon reading that Oppenheimer's Michael Metz, a perpetually wrong and consistently bearish market pundit, made the statement that the global market reaction to the Hong Kong debacle was "symptomatic of a worldwide equity mania that is coming to an end." Of course, he's said that before. He will be right some day, but if I were a betting man, I'd wager today won't be the day. I'll get scared when he senses a rally is coming.

The Borefolio held up reasonably well in comparison the indices. Boring stocks fell 1.68% while the S&P 500 dropped 1.84% and the Nasdaq Composite sagged 2.16%. While this wasn't a great day, consider the plight of the Hong Kong investor who saw profits trimmed 10% today. It is all relative.

When the dust settled, 8 Boring stocks fell while there was a solitary Boring winner. Interestingly enough, there wasn't a speck of news on any of our holdings.

The lone winner was BORDERS GROUP (NYSE: BGP), up $3/4. I note that competing booksellers BARNES AND NOBLE (NYSE: BKS) and AMAZON.COM (Nasdaq: AMZN) were both down. There is probably little reason for the divergence. Since there is little news to report, I thought I might boost Borders' sales by recommending a couple of good books I've read in the past couple of weeks. If you haven't read Into Thin Air by Jon Krakauer or The Perfect Storm by Sebastian Junger, I highly recommend them. They both tell tales that left me in awe.

Shares of ATLAS AIR (Nasdaq: ATLS) fell $15/16 today. Atlas does business with China Air (Taiwan), transporting goods from all parts of the Pacific Rim. This China connection probably didn't help the shares today, as stocks with exposure to Asian markets were particularly hard hit.

In spite of the bond rally, shares of GREEN TREE FINANCIAL (NYSE: GNT) dropped $1 9/16. There is a lot of rumbling ahead of November's meeting of the Federal Reserve Board and that may wear on financial stocks. Competitor HOUSEHOLD INTERNATIONAL (NYSE: HI) reported strong earnings today, but also pointed out a significant rise in delinquencies and charge-offs. That, combined with the troubles at CITYSCAPE FINANCIAL (Nasdaq: CTYS), may have hurt Green Tree. And then again, it may have had nothing to do with it! Greg and I remain sanguine about prospects for Green Tree.

CISCO SYSTEMS (Nasdaq: CSCO) was down $2 7/16 as part of the particularly severe drop in the Nasdaq. There was no news today. Insomniacs might be comforted to know that Cisco filed its 10-K with the SEC yesterday. This is must reading for Cisco shareholders, but you might want to slip over to Borders for a cappuccino before digging in. You can check it out on the Edgar website or at the FreeEDGAR site.

Coming soon for Borefolio aficionados are the earnings reports from PRIME MEDICAL SYSTEMS (Nasdaq: PMSI) and ATLAS AIR (Nasdaq: ATLS). Both companies report next week and both will follow their earnings reports with conference calls. The Motley Fool will cover all of the action.

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Stock  Change    Bid
ATLS  -  15/16 25.94
BGP   +  3/4   26.06
CSL   -1 1/8   43.94
CSCO  -2 7/16  81.50
GNT   -1 9/16  46.44
ORCL  -  7/8   34.13
OXHP  -2 3/16  71.00
PMSI  -  9/16  13.00
TDW   -  7/16  67.56
                   Day   Month    Year  History
        BORING   -1.68%  -0.50%  26.43%  45.49%
        S&P:     -1.84%   0.36%  28.34%  52.94%
        NASDAQ:  -2.16%  -0.86%  29.45%  60.55%

    Rec'd   #  Security     In At       Now    Change
  2/28/96  400 Borders Gr    11.26     26.06   131.54%
  8/13/96  200 Carlisle C    26.32     43.94    66.90%
   2/2/96  200 Green Tree    30.39     46.44    52.82%
  6/26/96  100 Cisco Syst    53.90     81.50    51.21%
  5/24/96  100 Oxford Hea    48.02     71.00    47.84%
 12/23/96  100 Tidewater     46.52     67.56    45.22%
   3/8/96  400 Prime Medi    10.07     13.00    29.11%
   3/5/97  150 Atlas Air     23.06     25.94    12.49%
 11/21/96  150 Oracle Cor    32.43     34.13     5.22%

    Rec'd   #  Security     In At     Value    Change
  2/28/96  400 Borders Gr  4502.49  10425.00  $5922.51
  8/13/96  200 Carlisle C  5264.99   8787.50  $3522.51
   2/2/96  200 Green Tree  6077.49   9287.50  $3210.01
  6/26/96  100 Cisco Syst  5389.99   8150.00  $2760.01
  5/24/96  100 Oxford Hea  4802.49   7100.00  $2297.51
 12/23/96  100 Tidewater   4652.49   6756.25  $2103.76
   3/8/96  400 Prime Medi  4027.49   5200.00  $1172.51
   3/5/97  150 Atlas Air   3458.74   3890.63   $431.89
 11/21/96  150 Oracle Cor  4864.99   5118.75   $253.76

                             CASH   $8028.59
                            TOTAL  $72744.22