Is Viagra Dangerous?
by Phil Weiss
Towaco, NJ (July 6, 1998) -- I trust that all of you had a chance to spend a little time outdoors, throw a few burgers on the grill, enjoy family and friends, and get in at least one complaint about the full-service brokerage industry over the holiday weekend!
It's hard to believe how fast my weekends go. Mine ended with a dash of reality. I had a car pick me up at 5 a.m. this morning to take me to the airport for a trip to Kansas City. Yowch! That's a real tough way to start your week, if you're a night owl like me. Worst of all it's the All-Star break, which means that I can't even try to catch a ballgame at another ballpark on this trip.
(Note: These are the sorts of things you can find out about me -- and other Fools -- by clicking the Interview feature on the great new Fool boards on the Web. Click here: Interview with Phil Weiss).
Ok, here's how our Cash-King stocks did last week:
Cash-King Last This Change Gap Inc. $61.00 $63.56 + 4.2% Cisco $89.88 $92.56 + 3.0% Microsoft $104.38 $107.19 + 2.7% T Rowe $36.69 $37.63 + 2.6% AmEx $110.50 $111.63 + 1.0% Coca-Cola $85.81 $85.25 - 0.1% Pfizer $111.94 $107.50 - 4.0% Intel $76.38 $73.19 - 4.2% Fool Four Last This Change Kodak $70.13 $73.31 + 4.5% GM $66.88 $68.88 + 3.0% Chevron $83.63 $85.13 + 1.8% Exxon $72.25 $72.88 + 0.9% S&P 500 1133.20 1146.42 + 1.2% Total CK $22,623 $22,870 + 1.1%
All but Intel (Nasdaq: INTC), Pfizer (NYSE: PFE), and Coca-Cola (NYSE: KO) were up for the week. The only downer is that we narrowly lost to the S&P. But, it's nice to see that we're fully invested now, and I expect to see our portfolio wriggle its way free from the competition and burst into a full sprint away in the years ahead.
For another take on the possibilities of this portfolio you might also want to check this post by MYCROF4 on our Coca-Cola message board. MYCROF has designed an equation for fundamental valuation, out of the work of analyst George Michaelis. His findings are heart-warming for Fools: MYCROF's Analysis of the C-K Portfolio.
Now, to the news...
I'll start out with Intel, which last week announced its Xeon chip. The powerful chip should help keep Intel's profit margins at the high levels to which we've become accustomed. We expect this will also strengthen Intel's position in the high-end workstation market. As a matter of fact, some are saying that Xeon could help Intel make some inroads in the Unix market.
Now, there was a bug found in the Xeon chip, but word is that it's unlikely to affect shipment plans. "It doesn't impact any of the workstation products that are announced today," Michael Fister, Intel's vice president in charge of microprocessor products group, told a news conference in Tokyo to announce the Xeon. "These errata (bugs) have workarounds. We're just completing our validation over the next two weeks, and our customers will announce their server products starting later this month, in July, and continuing on through the summer."
Intel also announced on Wednesday that two of its older chip-making plants would be shut down for nine days, putting more than 1,700 workers on unpaid leave. The plants are being shutdown to help reduce chip supplies. For more info you can click the following link: Intel to shut plants temporarily.
Over to Microsoft (Nasdaq: MSFT). Initial sales of our company's Windows 98 operating system have been better than expected. Here's a link to Intel's exploration into what's changed between Win95 and Win98 -- a fine article: Inside Windows 98.
Elsewhere, as seems to be the custom of our company, delays related to Windows NT 5.0 were announced last week. A second major beta version of the operating system is expected sometime this summer. Mike Nash, director of marketing for Windows NT Server, told Reuters that the software giant plans a third, wider beta version and then a "release candidate" version before the long-awaited system is put on the market.
Nash did not provide a time frame for the latter versions, declining to project a final release date for the product, which aims to move Windows into the biggest corporate enterprise systems. "Right now we're managing the product milestone to milestone," he told Reuters. The delay in NT 5.0 could actually lead to more business users deciding to take a look at Windows 98.
Gap Inc. (NYSE: GPS) signed leases this week to open nine additional units in more than 104,500 square feet in Crown American shopping malls. Four Old Navy Clothing Co. and five Gap combination stores will be opening in Fall 1998 and Spring 1999.
Cisco Systems (Nasdaq: CSCO) announced a joint venture along with MCI Communications (Nasdaq: MCIC) and IBM (NYSE: IBM) to offer a combination of hardware, software and services for customers seeking to modernize their older mainframe systems to make them more Internet accessible. Cisco will contribute mainframe network equipment and IBM will provide software to MCI.
Federal regulators continue to receive reports of men dying after taking Viagra, the male impotence drug manufactured by Pfizer. As of mid-June, the FDA had received 30 such reports and close to 100 reports of adverse reactions. According to The Wall Street Journal, most of the men who died were elderly, with other health problems. A team of specialists assembled by the FDA has probed the cases, but found nothing unusual. The FDA continues to maintain that the drug is safe when used according to the package's instructions.
I found no significant news about any of our other Cash-King holdings last week. The fixed holding period of our Fool Four holdings enables us to not worry about following the trials and tribulations related to the strikes by employees of General Motors (NYSE: GM) that have essentially shut down the company's production of new vehicles. We were, of course, very pleased to see our Foolish Four stocks perform so well this past week.
Finally, if you've read this far, you're about to be rewarded for it! This past week, an excellent article in Fortune Magazine popped up online, featuring a town hall meeting between Bill Gates and Warren Buffett. The two stood before 350 business students at the University of Washington to share their philosophies. It's terrific: The Bill and Warren Show.
I'll be back tomorrow with a discussion about voting the proxy statements that are sent with each of the annual reports that we receive in the mail.
Have a Foolish evening,
Stock Change Bid ---------------- AXP +1 5/8 113.25 CHV - 1/2 84.63 CSCO + 3/8 92.94 KO +1 7/16 86.69 GPS +2 65.56 EK + 3/16 73.50 XON + 7/16 73.31 GM +2 70.88 INTC + 1/4 73.44 MSFT + 1/2 107.69 PFE +1 15/16 109.44 TROW + 1/16 37.69
Day Month Year History C-K +1.11% 1.37% 15.61% 15.61% S&P: +0.95% 2.07% 15.58% 15.58% NASDAQ: +0.82% 0.78% 15.52% 15.52% Cash-King Stocks Rec'd # Security In At Now Change 2/3/98 24 Microsoft 78.27 107.69 37.59% 2/3/98 22 Pfizer 82.30 109.44 32.98% 5/1/98 37 Gap Inc. 51.09 65.56 28.33% 2/27/98 27 Coca-Cola 69.11 86.69 25.44% 2/6/98 56 T. Rowe Pr 33.67 37.69 11.92% 5/26/98 18 American E 104.07 113.25 8.82% 6/23/98 23 Cisco Syst 86.35 92.94 7.63% 2/13/98 22 Intel 84.67 73.44 -13.27% Foolish Four Stocks Rec'd # Security In At Value Change 3/12/98 20 Eastman Ko 63.15 73.50 16.39% 3/12/98 20 Exxon 64.34 73.31 13.95% 3/12/98 15 Chevron 83.34 84.63 1.54% 3/12/98 17 General Mo 72.41 70.88 -2.11% Cash-King Stocks Rec'd # Security In At Value Change 5/26/98 18 American E 1873.20 2038.50 $165.30 2/3/98 24 Microsoft 1878.45 2584.50 $706.05 2/3/98 22 Pfizer 1810.58 2407.63 $597.05 5/1/98 37 Gap Inc. 1890.33 2425.81 $535.48 2/27/98 27 Coca-Cola 1865.89 2340.56 $474.67 2/6/98 56 T. Rowe Pr 1885.70 2110.50 $224.80 6/23/98 23 Cisco Syst 1985.95 2137.56 $151.61 2/13/98 22 Intel 1862.83 1615.63 -$247.21 Foolish Four Stocks Rec'd # Security In At Value Change 3/12/98 15 Chevron 1250.14 1269.38 $19.23 3/12/98 20 Eastman Ko 1262.95 1470.00 $207.05 3/12/98 20 Exxon 1286.70 1466.25 $179.55 3/12/98 17 General Mo 1230.89 1204.88 -$26.02 CASH $51.68 TOTAL $23122.87 *The year for the S&P and Nasdaq will be as of 02/03/98