Boring Portfolio

Fed Cuts
...Stocks droop

by Greg Markus (TMF Boring)

ANN ARBOR, Mich. (Sept. 29, 1998) -- A 25 basis-point cut in the fed funds rate by the FOMC did little for stocks Tuesday. The S&P 500 managed to post a nominal advance, but the Dow, Nasdaq, and (naturally) Russell 2000 all closed lower.

As did the Boring Portfolio. Shares of Northern Telecom (NYSE: NT) tumbled 12% in heavy trading today, taking virtually all telecommunications equipment stocks down with them, including the Borefolio's own Cisco Systems (Nasdaq: CSCO) and Andrew Corp. (Nasdaq: ANDW).

Nortel's CEO John Roth hosted an event in New York this morning to celebrate the merger of Bay Networks in Nortel and to unveil the new "Nortel Networks" brand. Apparently, Roth's comments were insufficiently upbeat to satisfy the assembled industry analysts, a group that probably walked into the meeting more than a bit skittish following cautionary comments from Newbridge Networks (NYSE: NN) last week, the implosion of Alcatel (NYSE: ALA) the week before that, and the god-awful Tellabs (Nasdaq: TLAB) and Ciena (Nasdaq: CIEN) fiasco before that.

If there's any silver lining in this gray cloud for Cisco shareholders, it is perhaps that at least some of the difficulties facing the traditional telco equipment guys are attributable to their belated efforts to expand their product offerings so as to compete with the new Kid on the block. At any rate, CSCO dipped $1 5/8 to $64 5/8, and ANDW fell $1/2 to $13 1/2.

(By the way, Ciscophiles who missed it yesterday may want to check out our radically condensed and highly unauthorized version of Cisco's recent 10-K annual filing with the SEC.)

Borders Group (NYSE: BGP) was no help today, as its stock dropped $1 1/8 to $25 3/16. Here we are at the end of the next-to-last day in the month of September and still no sighting of the long, long awaited grand-opening celebration for Borders.com, an event that Borders execs affirmed and reaffirmed would occur this month. Well, they've still got tomorrow -- if, indeed, anyone really cares that much anymore. (Disappointed? Bitter? Who? Me?)

News from across the pond that bookseller W.H. Smith is contemplating revamping some of its stores into a superstore format to compete better with the Borders invasion may have added some additional downward pressure on BGP -- although, ever the optimist, one (not I, at least not today) might argue that, imitation being the sincerest form of flattery, this report from England only serves to underscore Borders' success there.

So did anything rise today in the Borefolio?

You bet. Atlas Air (NYSE: CGO), which descended to a 52-week low of $20 5/8 less than three weeks ago, continues to show strength, gaining $7/16 today to $28 5/8. And shares of our favorite St. Paul-based maker of power tools, pumps, and electrical enclosures, Pentair (NYSE: PNR), picked up $1 11/16 to close at $32 1/4.

We'll be looking for Atlas and Pentair -- along with Andrew, Carlisle (NYSE: CSL), and FelCor (NYSE: FCH) -- to report their quarterly results in a few weeks.

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


09/29/98 Close

Stock  Change    Bid 
 ANDW  -  1/2   13.50 
 CGO   +  7/16  28.63 
 BGP   -1 1/8   25.19 
 CSL   -  1/2   38.13 
 CSCO  -1 5/8   64.63 
 FCH     ---    24.31 
 PNR   +1 11/16 32.25 
 TBY   -  1/16  6.13 
 
                   Day   Month    Year  History 
         BORING   -1.43%  13.56% -11.75%  11.04% 
         S&P:     +0.03%   9.55%   8.10%  68.75% 
         NASDAQ:  -0.30%  15.66%  10.42%  66.58% 
  
     Rec'd   #  Security     In At       Now    Change 
   6/26/96  225 Cisco Syst    23.96     64.63   169.77% 
   2/28/96  400 Borders Gr    11.26     25.19   123.77% 
   8/13/96  200 Carlisle C    26.32     38.13    44.82% 
    3/5/97  150 Atlas Air     23.06     28.63    24.14% 
   4/14/98  100 Pentair       43.74     32.25   -26.27% 
   11/6/97  200 FelCor Sui    37.59     24.31   -35.32% 
   5/20/98  400 TCBY Enter    10.05      6.13   -39.02% 
   1/21/98  200 Andrew Cor    26.09     13.50   -48.26% 
  
     Rec'd   #  Security     In At     Value    Change 
   6/26/96  225 Cisco Syst  5389.99  14540.63  $9150.64 
   2/28/96  400 Borders Gr  4502.49  10075.00  $5572.51 
   8/13/96  200 Carlisle C  5264.99   7625.00  $2360.01 
    3/5/97  150 Atlas Air   3458.74   4293.75   $835.01 
   4/14/98  100 Pentair     4374.25   3225.00 -$1149.25 
   5/20/98  400 TCBY Enter  4018.00   2450.00 -$1568.00 
   1/21/98  200 Andrew Cor  5218.00   2700.00 -$2518.00 
   11/6/97  200 FelCor Sui  7518.00   4862.50 -$2655.50 
  
                              CASH   $5750.59 
                             TOTAL  $55522.47