Boring Portfolio

Boring Portfolio Report
Thursday, January 15, 1998
by Mark Weaver, MD (MWEAV@aol.com)


St. Louis, MO (Jan. 15, 1998) - The markets tumbled today on rekindled fears about Asian markets. Stocks fell in Asian markets overnight after gaining in the two previous sessions. After the dust had settled the S&P 500 was off 0.75% while the Nasdaq Composite eased back a modest 0.11%. If there was any strength today it was in technology stocks.

The Boring portfolio was down 2.10% with 2 stocks gaining and 6 losing ground. We chose today as the day to make our sale of 400 shares of Prime Medical (Nasdaq: PMSI) which left the portfolio at a price of $10 1/2. The sale price of PMSI was responsible for 0.83% of today's decline. As stated in last night's report, we will continue to monitor the company and the stock.

There were a few news items of interest involving Borefolio stocks today. First up is Borders Group (NYSE: BGP) which announced that earnings for the fiscal year are expected to come in a bit ahead of consensus estimates. This good news was accompanied by the news that the Borders.com Internet site launch would be delayed due to the need for additional tests. The launch is now expected at some time during the first quarter. Borders was the recipient of a new buy recommendation from ABN AMRO Chicago Corp yesterday. In spite of what appears to be overall good news, Borders dropped $5/8.

ABN AMRO Chicago Corp.??? Some corporate egos could stand some taming don't you think?

Cisco Systems (Nasdaq: CSCO) was up $1/2 on a good day for big tech stocks. However, the Kid was in part responsible for the big drop in the price of Check Point Software (Nasdaq: CHPK.O). Morgan Stanley Dean Witter (egos again) lowered its rating on Check Point citing the anticipation that Cisco and Microsoft (Nasdaq: MSFT) will soon announce collaborative strategies aimed at continuing Cisco's move into the data security industry.

The other Borefolio winner was Felcor Suite Hotels (NYSE: FCH) which announced the closing of a $114 million fixed rate 10 year loan at a rate of 6.988 percent. The proceeds will pay down higher interest rate debt related to its joint venture with Promus Hotel Corporation (NYSE: PRH). This refinancing will enhance returns to shareholders. Felcor is outpacing the S&P since we've added it to our portfolio and that doesn't include our hefty dividend.

The only other news of note comes from the oil patch where oil service stocks continue to confound. Tidewater (NYSE: TDW) was down $12/16 today in spite of all sorts of news which could be construed to be bullish. Maverick Tube (Nasdaq: MAVK) was taken out and shot after reporting earnings ahead of estimates, lower steel prices (good news) and that they saw no sign of a decrease in orders. Who can figure. Global Marine (NYSE: GLM) bested estimates (after accounting for one time charges) as well. Drill bit maker Smith International (NYSE: SII) received an upgrade from SBC Warburg today as well. On top of that good news December Oil futures traded well above $18 per barrel even though the near contract fetched only $16.33. If anyone can figure this out, post your reasoning over on the Boring Stocks message board. I'd love to hear it.

On a sad note a Tidewater boat collided with a boat carrying 6 duck hunters in a stormy Louisiana bayou. Among the six were the head of sports marketing for RJR and a former CEO of Gulf & Western.

Finally, have you been to a bookstore lately? If you have you have undoubtedly been barraged with book titles like "Keeping Life Simple", "Financial Peace", "A-Z for a Richer Life", "Don't Sweat the Small Stuff", "Your Money or Your Life" and on and on. There is a message in the titles. That message can't be good news for a consumption based economy.

When I scan the books I see advice to spend less, consume less and in general chill out. It sounds mighty appealling to me. I doubt I am the Lone Ranger in feeling that way. I have been ruminating about which stocks would benefit from a societal move to "Just not Do It". Fortunately, I see that the Borefolio has stocks that should benefit from a move to less work, more play.

Borders should benefit from increased time to sit back and read a good book. Carlisle (NYSE: CSL) should benefit as golf continues to boom and less busy folks actually mow their own yards. Carlisle certainly doesn't depend on conspicuous consumption to make a buck. Felcor should benefit from a boom in leisure time travel. Even Cisco could benefit as folks continue to "get connected".

A move to decreased consumption has to be bad news for retailers. They might be worth thinking about on the short side. But is short selling boring? Hmmm, let me think about that.

FoolWatch -- It's what's going on at the Fool today.

Buy a Book and Get It Signed! -- Book Tour '98


TODAY'S NUMBERS
Stock  Change    Bid 
 CGO   -  7/16  23.13 
 BGP   -  5/8   29.81 
 CSL   -1 15/16 41.94 
 CSCO  +  1/2   57.44 
 FCH   +  7/16  36.88 
 GNT   -  3/4   23.94 
 TDW   -  13/16 44.31 
 
                   Day   Month    Year  History 
         BORING   -2.10%  -5.56%  -5.56%  18.83% 
         S&P:     -0.75%  -2.03%  -2.03%  52.95% 
         NASDAQ:  -0.07%  -1.48%  -1.48%  48.62% 
  
     Rec'd   #  Security     In At       Now    Change 
   2/28/96  400 Borders Gr    11.26     29.81   164.85% 
   6/26/96  150 Cisco Syst    35.93     57.44    59.84% 
   8/13/96  200 Carlisle C    26.32     41.94    59.31% 
    3/5/97  150 Atlas Air     23.06     23.13     0.29% 
   11/6/97  200 FelCor Sui    37.59     36.88    -1.90% 
  12/23/96  100 Tidewater     46.52     44.31    -4.76% 
    2/2/96  200 Green Tree    30.39     23.94   -21.23% 
  
     Rec'd   #  Security     In At     Value    Change 
   2/28/96  400 Borders Gr  4502.49  11925.00  $7422.51 
   6/26/96  150 Cisco Syst  5389.99   8615.63  $3225.64 
   8/13/96  200 Carlisle C  5264.99   8387.50  $3122.51 
    3/5/97  150 Atlas Air   3458.74   3468.75    $10.01 
   11/6/97  200 FelCor Sui  7518.00   7375.00  -$143.00 
  12/23/96  100 Tidewater   4652.49   4431.25  -$221.24 
    2/2/96  200 Green Tree  6077.49   4787.50 -$1289.99 
  
                              CASH  $10424.47 
                             TOTAL  $59415.10