Boring Portfolio

Boring Portfolio Report
Thursday, November 06, 1997
by Mark Weaver, MD (mweav@aol.com)


St. Louis, MO (Nov. 6, 1997) -- The market treaded water today. The Borefolio declined a modest 0.80% while the S&P 500 was down 0.50% and the Nasdaq dropped 0.85%. The market's volatility is getting back to a more normal level after the wild times in October.

Among Borefolio holdings there was only 1 winner and there were 5 losers while 2 stocks were unchanged.

Notable as the only winner for the Bore was our newest holding FELCOR SUITE HOTELS (NYSE: FCH) up $5/8. We purchased 200 shares today at $37 1/2. Read all about FelCor in the outstanding report penned by Greg Markus. I think the section describing how we came to pick FelCor is extremely interesting reading. I am certain that most visitors to The Motley Fool are unaware of the outstanding Real Estate Industry Area which is overseen by Michael Dowd (TMF Yorick) and his colleagues. If you want to learn about REITS and real estate this has to be the best spot in cyberspace to do it. I am excited to have FelCor in the Borefolio. This stock will hopefully provide above average returns with below average volatility.

CISCO SYSTEMS (Nasdaq: CSCO) was off $11/16 today. The company reported better than expected earnings after the close on Tuesday. Greg Markus spent two hours listening to the conference call and has now posted the conference call report. Grab a soda and some chips and enjoy reading about the leader among the networking stocks.

Also on the conference call docket is former Borefolio holding OXFORD HEALTH PLANS (Nasdaq: OXHP). Read it and weep by clicking right here: Oxford Health Plans Q3 conference call. I should note that there have been a couple of additional shareholder lawsuits filed and that the CFO of the company, Andrew Cassidy, resigned yesterday. Actually, not all news is bad for Oxford. I noted that respected healthcare industry analyst Geoffrey Harris of Smith Barney raised Oxford to a buy rating yesterday. Whatever. The Borefolio disposed of its shares on Tuesday and we aren't looking back... for now.

ATLAS AIR (Nasdaq: ATLS) dipped $3/16 after announcing yesterday that delays in getting its new planes from Boeing might adversely affect earnings in the near term.

TIDEWATER (NYSE: TDW) sunk $1 1/8 today. Although you wouldn't know it by today's action, the oil services sector remains white hot. It leads all industries in relative strength according to Investor's Business Daily. I noted commentary in that publication yesterday which pointed out the continued bullish stance for this industry.

Oil rigs are now running at 95% of capacity and it will be years before new rigs come on line. Tidewater is the beneficiary of this all out drilling effort as it provides the boats that service the aforementioned rigs. I also noted that Tidewater moved up to Value Line's #1 ranking for Timeliness in last week's update. The Boring team welcomes the highly successful Value Line outfit onto the Tidewater team.

May I digress for a moment?...

In my day job as a doctor I am confronted with changes in the healthcare system on a relentless basis. Many of my colleagues, nurses and patients are thoroughly disgusted with the way the system is headed. Many laymen assume that doctors are frustrated because of declining incomes but, in fact, that is rarely mentioned as a problem among my peers. The problem is much more than dollars and cents. In yesterday's Wall Street Journal there were two very illustrative editorials and anyone trying to understand the angst of the healthcare community would do well to read them.

In the first editorial geriatrician Philip Alper asks the following question:

"If a doctor orders a stool specimen to test for occult blood -- which might indicate an early colon cancer -- is he engaging in good medical practice, or criminal behavior?"

His answer should shock you...

"It all depends. If the patient doesn't have symptoms and the bill is sent to Medicare, it's a criminal offense because these "preventive services" aren't covered benefits. Thus, billing them to Medicare is considered fraud. The absence of intent to "cheat" Medicare doesn't matter. Fines of up to $10,000 per "incident" of such "fraud" may be levied on the physician who simply orders the test from a lab at no personal profit."

This is living proof of the old adage "no good deed goes unpunished."

When you read stories about Medicare fraud, this is the kind of stuff they are often talking about. While there are undoubtedly bona fide fraudulent billing schemes that have been uncovered, much Medicare "fraud" is debatably fraudulent. Doctors have to spend an undue amount of time juggling their words and actions in order to avoid committing "fraud" while practicing good medicine. An overzealous Congress has created a monster.

Patients should be outraged. Doctors are frustrated.

The second editorial points to an even more ludicrous new law affecting the Medicare system. As is currently stands, as of January 1st, any doctor that sees a Medicare age patient as a private patient (ie. a patient decides that they want to pay cash instead of using Medicare to see the doctor of their choice) then that doctor can't see ANY Medicare patients for a period of two years. Because of this new law all persons of Medicare age are more or less forced to becoming a participant in Medicare part B whether they want to or not! No right minded physician would risk losing all Medicare patients by seeing a single Medicare age patient for cash. If that patient wished to forego Medicare benefits they would be unable to find a doctor to see them. So much for freedom of choice.

While I have never disputed that the healthcare system in this country needed to become more cost effective and that changes needed to be made, I don't think I ever envisioned something as cockeyed and convoluted as what has been promulgated by our public servants in Washington.

Stay Foolish.


TODAY'S NUMBERS
Stock  Change    Bid
ATLS  -  3/16  28.38
BGP     ---    28.69
CSL   -  11/16 44.75
CSCO  -  11/16 84.69
FCH   +  5/8   37.63
GNT   -  3/8   44.63
ORCL  -  15/16 35.31
PMSI    ---    13.00
TDW   -1 1/8   68.31
                   Day   Month    Year  History
        BORING   -0.80%   3.52%  21.56%  39.88%
        S&P:     -0.50%   2.56%  26.63%  50.90%
        NASDAQ:  -0.85%   1.87%  25.75%  55.96%

    Rec'd   #  Security     In At       Now    Change
  2/28/96  400 Borders Gr    11.26     28.69   154.86%
  8/13/96  200 Carlisle C    26.32     44.75    69.99%
  6/26/96  100 Cisco Syst    53.90     84.69    57.12%
   2/2/96  200 Green Tree    30.39     44.63    46.85%
 12/23/96  100 Tidewater     46.52     68.31    46.83%
   3/8/96  400 Prime Medi    10.07     13.00    29.11%
   3/5/97  150 Atlas Air     23.06     28.38    23.06%
 11/21/96  150 Oracle Cor    32.43     35.31     8.88%
  11/6/97  200 FelCor Sui    37.64     37.63    -0.03%

    Rec'd   #  Security     In At     Value    Change
  2/28/96  400 Borders Gr  4502.49  11475.00  $6972.51
  8/13/96  200 Carlisle C  5264.99   8950.00  $3685.01
  6/26/96  100 Cisco Syst  5389.99   8468.75  $3078.76
   2/2/96  200 Green Tree  6077.49   8925.00  $2847.51
 12/23/96  100 Tidewater   4652.49   6831.25  $2178.76
   3/8/96  400 Prime Medi  4027.49   5200.00  $1172.51
   3/5/97  150 Atlas Air   3458.74   4256.25   $797.51
 11/21/96  150 Oracle Cor  4864.99   5296.88   $431.89
  11/6/97  200 FelCor Sui  7527.49   7525.00    -$2.49

                             CASH   $3011.11
                            TOTAL  $69939.24


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