Monday, June 01, 1998
Cash-King Portfolio
Report
by Phil Weiss
([email protected])
Towaco, NJ (June 1, 1998) -- Its Monday, otherwise known as Newsday here in Cash-King land. So, on to our stocks.
Cash-King Last This Change Gap Inc. $52.94 $54.00 + 2.0% T. Rowe $35.06 $35.38 + 0.1% Pfizer $105.44 $104.94 - 0.0% Coca-Cola $78.81 $78.38 - 0.1% Microsoft $85.56 $84.81 - 0.1% Intel $74.25 $71.38 - 4.0% Amer Exp* -- $102.63 -- Fool Four Last This Change E. Kodak $70.56 $71.38 + 1.1% Exxon $70.56 $70.50 - 0.0% Chevron $80.94 $79.88 - 1.3% GM $76.00 $71.88 - 5.4% S&P 500 1110.47 1090.82 - 1.8% Total CK $21,296 $21,152 - 0.7%
(*) Purchased on May 26, 1998
It was a down week for the C-K Portfolio, and losing money is nothing to be proud of, but beating the market is. We always take satisfaction in doing that -- though, measuring investment performance over a week is kinda silly.
Okay, time to check last week's news on our stocks. First of all, I think Im going to lodge a complaint against both the Department of Justice and the Federal Trade Commission for being monopolies of their own! We dont really mind seeing our companies in the news, but wed prefer to see them developing new products, expanding their market share, and serving the planet rather than battling in the courts. But... it comes with the territory here.
Leading off tonight is Microsoft Corp. (Nasdaq: MDST). As expected, there's been a lot of posturing in the press this week by both Mr. Softy and its competitors about the potential outcome of the suit by the Department of Justice (DOJ). Was it surprising to see two of Bill Gatess biggest foes -- Larry Ellison of Oracle and Scott McNealy of Sun Microsystems -- rah-rahing and claiming that the DOJ will win the lawsuit.
My take on these comments -- which is a belief I've had for years -- is that both of these companies would better serve their shareholders by directing their primary, secondary, and tertiary efforts toward better serving their customers. If youre interested in reading some of the comments made by McNealy you can check this link:
Sun chief wants Microsoft breakup
In response, on Wednesday Steve Ballmer, Microsoft's executive vice president for sales and support, said the company is confident that it will win in the legal action instituted by the DOJ.
On Wednesday, we also learned that Gateway has introduced a new consumer program giving customers the choice of configuring their new PCs with either Microsoft's Internet Explorer or Netscape's Navigator on their Windows 98-based systems. NEC, Hewlett Packard, and IBM are about to follow suit.
Not all the news for Microsoft last week was related to the DOJ lawsuit, though. On Thursday, Bill Gates said that the company will spend more than $3 billion on research and development in the coming fiscal year, a 15% increase over the $2.6 billion spent on R&D this year.
Next up, Intel (Nasdaq: INTC). During the week, we learned that the Federal Trade Commission is recommending civil antitrust charges against Intel alleging that the powerful chipmaker abused its dominant position and bullied its smaller rivals. The majority opinion on this lawsuit seems to be that it shouldn't have a significant impact on Intels operations.
After market close on Friday, Intel announced a delay in its Merced processor release schedule, saying that sample volumes of the 64-bit processor are now expected in 1999, with planned production volumes moved back from 1999 to mid-2000. As of this writing, Intel's stock is down $3 on the day.
Pfizer (NYSE: PFE) was another C-K company in the news last week. On Monday, the news hit the wires that 6 patients that took Viagra have died. The company said that, after reviewing the available information, it appears the deaths were attributed to either cardiovascular events associated with sexual activity in older men or a combination of Viagra and nitrates, which is contraindicated in the label approved by the FDA.
Here's a press release on the sixth deaths:
Some excellent responses to this Pfizer news are sitting in our Pfizer message folder on the Web.
On Friday, we learned that ICOS Corp. (Nasdaq: ICOS) currently has a drug in Phase II trials that could compete with Viagra. If youre interested in reading more on this you can check Fridays Evening News. It seems the media is at it again -- talking up something long before it exists.
On Monday, American Express announced the launching of its Blue Card for younger consumers in Britain, which has already been launched in seven countries worldwide. The company forecast that the number of its consumer cards in use in UK would grow by 50% over the next three years.
On Wednesday, AmEx announced that James Cracchiolo has been named president of the Travel Related Services International unit. He is now responsible for the companys credit card and travel agency business outside the U.S. These are two of the three international businesses that the company intends to focus on in the next few years. This appointment also puts Cracchiolo in line to serve one day as the head honcho at American Express -- so remember that name, Fools.
Finally, on Friday, Steven Alesio, president of small business services and consumer travel for AmEx was interviewed about the companys focus on expanding its financial service offerings to small businesses. The highlights of the interview are available at:
Next up -- Coca-Cola (NYSE: KO). On Wednesday, we were disappointed to learn that Pizza Inn has signed a 7-year contract giving PepsiCo exclusive pouring rights at its chain of more than 500 restaurants worldwide. We'll have to win them back in 2005.
On Friday, our soft drink giant responded to Pepsis antitrust lawsuit by filing a motion to dismiss saying that its competitor had misstated the facts. Pepsi has accused Coke of monopolizing fountain sales. I'm skeptical.
Both Gap Inc. (NYSE: GPS) and T. Rowe Price (Nasdaq: TROW) posted gains last week on no significant news -- another example of no news being good news, as these were our top performers in a down week. And, finally, as weve come to expect, there was no significant news to report for any of our Foolish Four stocks.
Thats it for tonights news update. Tomorrow night well have some exciting news about the unique approach that well be taking for our 8th Cash-King investment. The rest of this weeks reports will be taken up by that announcement, so Ill be back for a full week of reports next week.
But, before I give up the microphone and the stage, I'd like to share a story first that relates to one of the biggest advantages of Cash-King investing. It goes like this:
During Memorial Day weekend, my family and I were at my brother-in-laws house watching a video. Although it was still early in the evening, my wife had fallen asleep on the couch (chasing around a 10-month old all day does that to you), so I had one eye on the movie and the other on our son. He crawled around the room a little, kicking anything that looked like a ball and sticking his tongue out at the wall, and then he came over and lay his head against my leg. Within five minutes, he was fast asleep.
Now I hate to sound like a sap, but it brought a smile to my face. It just got me to thinking how lucky I am to have a family and to have time away from work to spend with them. I consider that to be one of the sweetest elements of Cash-King investing -- it's an approach designed to create more time for my family, one decade after another.
This runs contrary to many of my pre-Fool experiences -- where I felt work and money management would eat through my weekends. We've probably all known a lot of people who, for various reasons (apparent necessity and obsession, among them), have seen their personal life whittled down to nothingness. For me, the C-K approach stands alongside the Stones: T-ay-ay-ay-ime is on our side... yes it is!
We're lining up a victory over the next 20 years.
Fool on,
Phil Weiss
TODAY'S
NUMBERS
Stock Change Bid ---------------- AXP +1 3/16 103.81 CHV - 7/8 79.00 KO +1 1/8 79.50 GPS + 1/2 54.50 EK +1 3/16 72.56 XON + 1/8 70.63 GM - 3/4 71.13 INTC -3 3/8 68.00 MSFT -1 1/16 83.75 PFE -1 1/8 103.81 TROW -1 34.38 |
Day Month Year History
C-K -0.52% -0.52% 5.21% 5.21%
S&P: +0.01% 0.01% 8.96% 8.96%
NASDAQ: -1.80% -1.80% 5.68% 5.68%
Cash-King Stocks
Rec'd # Security In At Now Change
2/3/98 22 Pfizer 82.30 103.81 26.14%
2/27/98 27 Coca-Cola 69.11 79.50 15.04%
2/3/98 24 Microsoft 78.27 83.75 7.00%
5/1/98 37 Gap Inc. 51.09 54.50 6.67%
2/6/98 56 T. Rowe Pr 33.67 34.38 2.08%
5/26/98 18 American E 104.07 103.81 -0.24%
2/13/98 22 Intel 84.67 68.00 -19.69%
Foolish Four Stocks
Rec'd # Security In At Value Change
3/12/98 20 Eastman Ko 63.15 72.56 14.91%
3/12/98 20 Exxon 64.34 70.63 9.78%
3/12/98 17 General Mo 72.41 71.13 -1.77%
3/12/98 15 Chevron 83.34 79.00 -5.21%
Cash-King Stocks
Rec'd # Security In At Value Change
2/3/98 22 Pfizer 1810.58 2283.88 $473.30
2/27/98 27 Coca-Cola 1865.89 2146.50 $280.61
2/3/98 24 Microsoft 1878.45 2010.00 $131.55
5/1/98 37 Gap Inc. 1890.33 2016.50 $126.17
2/6/98 56 T. Rowe Pr 1885.70 1925.00 $39.30
5/26/98 18 American E 1873.20 1868.63 -$4.58
2/13/98 22 Intel 1862.83 1496.00 -$366.83
Foolish Four Stocks
Rec'd # Security In At Value Change
3/12/98 20 Eastman Ko 1262.95 1451.25 $188.30
3/12/98 20 Exxon 1286.70 1412.50 $125.80
3/12/98 17 General Mo 1230.89 1209.13 -$21.77
3/12/98 15 Chevron 1250.14 1185.00 -$65.14
CASH $2037.63
TOTAL $21042.01
*The year for the S&P and Nasdaq will be as of 02/03/98
