Boring Portfolio

Boring is as Boring does
Thursday, March 12, 1998
by Mark Weaver

St. Louis, MO (March 12, 1998) -- Early in the week bone chilling cold swept through the midwest and it has been a chilly week for the Borefolio as well. Today it began to thaw here and after a couple of subpar days the Borefolio perked up a bit as well. I hope this is the start of a new trend on both fronts.

For the day the Borefolio outpaced the S&P 500, up 0.22% vs. 0.14% for the index. The Nasdaq takes the prize today, up 0.41%. Borefolio winners edged losers 3 to 2.

Andrew (Nasdaq: ANDW) slid a bit further today, down $3/16. Andrew is the latest in the Borefolio's collection of snakebit stocks. Surprises are just that, surprises, but they certainly can be painful.

Also on the downside was Borders Group (NYSE: BGP). The market has yawned at the latest earnings report. This may be, in part, due to delays starting its web-based business. I would expect to see a positive reaction when that project is finally launched. Borders was off $5/16 today.

On the plus side was Atlas Air (NYSE: CGO), up $3/16 on no news. There have been positive vibes coming from Federal Express about increased Asian business. This may be bouying the overseas air cargo sector in general.

FelCor Suites Hotels (NYSE: FCH) has also gained ground this week. Today the stock was up $3/8 on no news. As reported by Greg Markus last Friday, things are reported to be on track at FelCor. At current prices the stock looks like a bargain to these eyes. Evidently some other eyes saw it the same way today.

The big gainer for the Borefolio was Cisco Systems (Nasdaq: CSCO). Cisco has been active this past week. Greg reports that there is a growing partnership with both Northern Telecom (NYSE: NT) and AT&T (NYSE: T). AT&T has contracted with CitiCorp (NYSE: CCI) to build and maintain Citicorp's global data network. AT&T has chosen to use Cisco routers for this project.

AT&T Solutions president and CEO, Rick Roscitt, put it this way: "We are in the process of a much closer alliance with Cisco and we're delighted to be working this closely with them on this important large engagement," Roscitt said. He said Ma Bell and The Kid had been doing some "behind the scenes sharing of software protocols" and collective long-range planning.

That sounds like a winner to me!

If that isn't enough, I also note that Cisco announced the acquisition of privately held Precept Software yesterday. Cisco believes that this will add to its leadership in Multimedia Networking. Precept makes software to enable the user to send live or recorded digital video and audio to a large number of users over either a LAN or a WAN.

Cisco also named Precept's president and CEO, Judith Estrin, to be senior vice president and chief technology officer.

Oh yeah, Cisco was up $1 3/8 today.

One of the regular contributors to the AOL Boring Stocks message board, Wordwrites, sent this comment along:

"No comment on Andrew 'disaster du jour.' However, I must say the interim between selection and 'earnings disappointment' is becoming shorter. When I used to write articles about publicly-held companies, I used to tell the CEO or CFO, or whoever was being interviewed, "If there's a chance of bad news in the next year I can't write a favorable article." To a man, they all assured me that all was rosy with their companies. Yet, I still had three (out of about 50 articles) that lied through their teeth. But you know who doesn't lie? Basic industrial companies headquartered in the Midwest. And those are the companies to own."

I find these comments compelling. The Boring portfolio has been the victim of too many "surprises." If that didn't lead to some soul searching, we would have failed on more than one front. Wordwrites comments about "basic industrial companies" gets to the core of what I believe Boring investing is about.

Boring investing is nuts and bolts, lawnmowers, auto parts, steel mills, GI Joe, sheet glass, breakfast cereal, bib overalls, machine tools, cement trucks and backhoes. It is about putting people to sleep when you talk about your favorite stock. It is the joy of knowing you've doubled your money on a stock which sells the mundane things we use every day.

If we've made any mistake it has been to have too few of these types of companies in the fold. We are diligently working to remedy that situation.

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

Stock  Change    Bid 
 ANDW  -  3/16  21.94 
 CGO   +  3/16  31.31 
 BGP   -  5/16  33.50 
 CSL     ---    47.94 
 CSCO  +1 5/16  63.94 
 FCH   +  3/8   35.75 
                   Day   Month    Year  History 
         BORING   +0.22%  -1.27%  -0.76%  24.88% 
         S&P:     +0.14%   1.96%  10.25%  72.12% 
         NASDAQ:  +0.41%  -0.36%  12.33%  69.46% 
     Rec'd   #  Security     In At       Now    Change 
   2/28/96  400 Borders Gr    11.26     33.50   197.61% 
   8/13/96  200 Carlisle C    26.32     47.94    82.10% 
   6/26/96  150 Cisco Syst    35.93     63.94    77.93% 
    3/5/97  150 Atlas Air     23.06     31.31    35.80% 
   11/6/97  200 FelCor Sui    37.59     35.75    -4.89% 
   1/21/98  200 Andrew Cor    26.09     21.94   -15.92% 
     Rec'd   #  Security     In At     Value    Change 
   2/28/96  400 Borders Gr  4502.49  13400.00  $8897.51 
   8/13/96  200 Carlisle C  5264.99   9587.50  $4322.51 
   6/26/96  150 Cisco Syst  5389.99   9590.63  $4200.64 
    3/5/97  150 Atlas Air   3458.74   4696.88  $1238.14 
   11/6/97  200 FelCor Sui  7518.00   7150.00  -$368.00 
   1/21/98  200 Andrew Cor  5218.00   4387.50  -$830.50 
                              CASH  $13625.51 
                             TOTAL  $62438.01