Boring Portfolio Report
Friday, March 8, 1996

(FOOL GLOBAL WIRE)
by Greg Markus (MF Boring)

ANN ARBOR, Mi. Mar 8 - The U.S. Labor Department reported this morning that there were 705,000 more Americans working in February than in January. Good news, right?

Wrong--or at least that's the conclusion the financial markets reached today. Interest rates spiked out of concern that the domestic economy might not be inert after all. That in turn clobbered the stock market, the fear being that money would move out of stocks and into less risky bonds as rates of return on debt became more attractive (or at least somewhat less unattractive). By late afternoon, the Dow Jones Index was down more than 200 points. The stock and bond markets had not fallen that far since Aug. 6, 1990, after Iraq invaded Kuwait.

Pat Buchanan must view today's news as a gift from heaven for his flagging presidential campaign. I can hear him now: "Can you believe it folks? The American economy actually manages to find a few extra jobs for struggling American workers last month, and those corporate coupon clippers think the world has come to an end!"

Now I'm no Buchananite, but he'd have a point--or at least he will if he follows the script. Sure, the market has a valid concern. But while interest rates move markets, so do corporate earnings. And if U.S. businesses are finding that they need more workers to keep up with demand for the goods and services they produce, that's good news for stocks, not bad.

Consider also that what caused all the flurry today was one little monthly government number--a number that is prone to a fair amount of imprecision, considering the ambient noise attributed by horrible weather in January, variations in the time span being monitored (as a result of government shut-downs), some G-5 in some federal office building losing a slip of paper behind his desk, and who knows what else.

All of which is to say that, no, the sky is not falling. Indeed, closer to home, here in the Borefolio, the damage was relatively minor. In fact, the portfolio actually gained a bit of ground for the week as a whole: + 0.32%, by my reckoning. That doesn't sound like a whole lot, but annualize it out and you'd be up over 18% across 52 weeks. We aspire to doing even better than that, of course. But it does help to put things in some perspective--for me, anyway.

Let's not close without saying hello to the newest acquisition: Prime Medical Services, Inc. One would think that on a day like today, one would be able to pick up PMSI shares at a nice discount, yes? Well, one would be wrong. PMSI barely budged amidst all the turmoil. I paid $10 each for the Borefolio's 400 shares, and the closing bid was $9 15/16. How delightfully boring.

Friday is history. Have a great weekend.

Today's Moves

BGP   -   1/2
GNT   -1  1/2
KLIC  +   1/4
LRCX  -   3/4
POT   -1     
PMSI  -   1/16
TXI   -2  3/4