Boring Portfolio Report
Wednesday, April 3, 1996

(FOOL GLOBAL WIRE)
By Hank Mansbach (MF Rigs)

ROYAL OAK, MI/April 3 -- Quick, what are the market's top performing sectors over the last 12 months? Based on the Dow Jones Industry Groups (published in Barron's each weekend), the current best performers in order are: Oil Drilling, Banks (West), Biotechnology, Money Center Banks, and Aerospace/Defense. That's four Boring groups to one sexy group. When was the last time you bragged to your co-workers about how well your stock in Citicorp or Nabors Industries was doing? I think this underscores the power of MF Boring's approach: You don't have to uncover the latest, hottest, whiz-bang product, concept or technology to find sectors or stocks that far outpace the overall market.

Boring has put together a well-balanced portfolio of cyclicals (Texas Industries & Lam Research), growth stocks (Borders, LCS Industries, Prime Medical) and one interest-sensitive company (Green Tree Financial). A couple of words about cyclical companies before we review today's results. Cyclicals tend to be ignored by individual investors for a variety of reasons: 1) They often toil in obscure industries like oilfield services; 2) They can be highly affected by commodity prices -- like the aluminum and copper producers; 3) They usually don't sport 5-year growth rates above 15% or 20%; 4) Typical valuation methods like the PEG (see Fool School) are not helpful; 5) Earnings can be strongly tied to macroeconomic movements; and 6) They are, well, boring. BUT, note that 2 of the market's top 5 sectors over the past year are cyclicals (the oil drilling and aerospace sectors). When these sectors and stocks are good, they're very, very good. And when they are bad, they can be very, very bad.

Figuring out which cyclical industries are improving or getting ready to improve takes some detective work. But, then, so does figuring out which hot new technology can be translated into a real business with real earnings. If you work in an industry such as auto manufacturing or chemicals, you likely have an inside track to understanding the ups and downs of that sector. Put that knowledge to use. Fooldom, with its participants from all types of industries, is also a powerful place to help individual investors sort out which cyclical sectors are rising and which are falling. SO, next time you are searching for a new stock, don't automatically toss out those Boring cyclicals.

Now for today's action. No news to report on any of the stocks in the Borefolio. It was an excellent day with the Borefolio outpacing both the S&P 500 and the NASDAQ. Prime Medical it a 52-week high intraday but pulled back to close up 1/8. LCS continued its recovery from the last week's drop. Green Tree held up well despite a minor selloff in interest sensitive stocks. Borders was flat. And the portfolio's champion steed, Texas Industries, continues to fight back. It looks like all the profit-taking that hurt the stock following the most recent earnings announcement has faded away.

Transmitted: 4/3/96