Boring Portfolio

Boring Portfolio Report
Monday, November 24, 1997
by Greg Markus (TMF Boring@aol.com)


ANN ARBOR, Mich. (Nov. 24, 1997) -- The failure of Japan's fourth largest brokerage firm, Yamaichi Securities, roiled markets around the world Monday -- except for Japan's, which is closed for a holiday. The Dow dropped 113 points, the S&P 500 fell 1.7% and the Nasdaq, more than 2%.

Technology, energy, and financial stocks -- the leaders of the market this year -- led the decline. When stocks in those sectors are weak, you can be fairly certain that the Boring Portfolio, with its heavy exposure there, will get hurt.

Man, did it ever. The Borefolio tumbled 3.2% as eight of nine holdings lost ground. Only Borders Group (NYSE: BGP) managed to stay put on its top shelf.

What would have been a tough day for Green Tree Financial (NYSE: GNT) because of the skittish bond market was made just that much tougher by the company being the focus of this morning's "Heard on the Street" column in the Wall Street Journal. The column largely rehashed week-old news, but it may have shaken a few more already nervous shareholders out of the Tree. GNT shed $2 3/16 on trading volume in excess of 2 million shares.

Energy stocks continued to weaken ahead of the OPEC meetings that formally begin on Wednesday. Tidewater (NYSE: TDW) sank $3 1/2. Glub.

The Borefolio's two tech gorillas, Cisco Systems (Nasdaq: CSCO) and Oracle (Nasdaq: CSCO) fell today, as well. The Kid dropped $1 13/16 in light trading and on no news of consequence. Not so for Oracle, though. That stock lost $2 7/16 in heavy trading following a cautious update from brokerage firm Morgan Stanley.

Analyst Chuck Phillips cut his revenue forecast for Oracle's fiscal second quarter (ending this month) by $16 million to $1.68 billion, citing potential weakness in the Asia-Pacific region. He left is Q2 earnings estimate alone, at $0.23 per share, believing that profit margins will exceed his original model for the quarter. But he trimmed his FY98 estimate by a penny, to $1.10 per share.

Oracle's international sales have been problematic all year. The combination of a strong dollar, lagging technology spending in parts of Europe, and economic turmoil in Asia are challenges largely beyond the control even of Larry Ellison.

The Borefolio purchased its (split-adjusted) 150 shares of Oracle one year ago last Friday, and the stock of this second-largest software company in the world is today within a few pennies of our original purchase price. The fact that we've found Oracle to be an exceptionally difficult company to communicate with hasn't exactly bolstered our comfort with the stock, particularly as we've watched uneasily while Ellison squandered much of the past year touting the ephemeral Network Computer in his monomaniacal campaign against Microsoft (Nasdaq: MSFT). Suffice it to say, we're actively evaluating Oracle's presence in the Borefolio.

Even stalwart Carlisle Companies (NYSE: CSL) succumbed to a $2 11/16 loss today. Carlisle has almost zero exposure to Asian markets. Moreover, last week the company received its single largest order in history -- to deliver 2,590 refrigerated aluminum shipping containers for a cool $68 million.

Carlisle announced today that Bob Parmacek will retire at the end of this year as head of Carlisle's FoodService Products division "after 42 years in the foodservice, housewares and tabletop industry." He'll be succeeded by David Shannon, Jr., current president of that division, who will also become its CEO.

Parmacek shouldn't take today's drop in the stock personally. Total volume was only 53,500 shares. It appears that there just weren't many folks looking to buy CSL on this jittery day in the market.


TODAY'S NUMBERS
Stock  Change    Bid
CGO   -  9/16  26.44
BGP     ---    30.06
CSL   -2 11/16 40.31
CSCO  -1 13/16 83.25
FCH   -  1/2   36.69
GNT   -2 3/16  31.31
ORCL  -2 7/16  32.50
PMSI  -  3/16  13.13
TDW   -3 1/2   57.25
                   Day   Month    Year  History
        BORING   -3.18%  -4.01%  12.71%  29.70%
        S&P:     -1.71%   3.50%  27.80%  52.29%
        NASDAQ:  -2.08%  -0.41%  22.92%  52.45%

    Rec'd   #  Security     In At       Now    Change
  2/28/96  400 Borders Gr    11.26     30.06   167.07%
  6/26/96  100 Cisco Syst    53.90     83.25    54.45%
  8/13/96  200 Carlisle C    26.32     40.31    53.13%
   3/8/96  400 Prime Medi    10.07     13.13    30.35%
 12/23/96  100 Tidewater     46.52     57.25    23.05%
   3/5/97  150 Atlas Air     23.06     26.44    14.66%
   2/2/96  200 Green Tree    30.39     31.31     3.04%
 11/21/96  150 Oracle Cor    32.43     32.50     0.21%
  11/6/97  200 FelCor Sui    37.59     36.69    -2.40%

    Rec'd   #  Security     In At     Value    Change
  2/28/96  400 Borders Gr  4502.49  12025.00  $7522.51
  6/26/96  100 Cisco Syst  5389.99   8325.00  $2935.01
  8/13/96  200 Carlisle C  5264.99   8062.50  $2797.51
   3/8/96  400 Prime Medi  4027.49   5250.00  $1222.51
 12/23/96  100 Tidewater   4652.49   5725.00  $1072.51
   3/5/97  150 Atlas Air   3458.74   3965.63   $506.89
   2/2/96  200 Green Tree  6077.49   6262.50   $185.01
 11/21/96  150 Oracle Cor  4864.99   4875.00    $10.01
  11/6/97  200 FelCor Sui  7518.00   7337.50  -$180.50

                             CASH   $3021.10
                            TOTAL  $64849.23