Boring Portfolio Report
ANN ARBOR, Mich. (Sept. 9) -- The Boring Portfolio gained just under a third
of a percentage point in value today, helped by strength in Borders, Cisco
Systems, and Green Tree Financial.
That was a respectable gain, but it was no match for the impressive performance
of the broader market averages and, especially, blue chip stocks. The Dow
soared 74 points, or 1.31%. At its current value of 5,734, the DJIA is just
one good day away from regaining its record closing high of 5,778 set on
May 22. NYSE volume was a dainty 310 million shares, however.
The Nasdaq rose 9.3 points (+0.63%) to 1,149, while the S&P 500 was up
8 points (+1.23%), to 664.
Meanwhile, the yield on the 30-year T-bond dropped to 7.07%, from Friday's
7.11%. The value of Green Tree stock usually moves inversely with bond yields,
and GNT sprouted up $ 5/8 today.
Borders Group booked a $1 1/8 gain today, and on above average volume, too.
Either Wall Street analysts like what they see at the new Borders in the
World Trade Center or else word of my week-end book purchases has reached
the Street.
Shares of our other "Group" -- Shaw -- fell $1 1/8. Volume was quite light
and there was no news I could locate, however. So I'm not particularly concerned
about our leading percentage winner.
The story behind today's other noticeable losing stock, Oxford Health Plans,
is more substantial. On Friday, the U.S. Health Care Finance Administration
(HCFA) announced that Medicare payment rates to HMOs will rise by an average
of 5.9% next year. The rate varies by county and region, however, and the
New York City area is slated to see a rise of at most 2%.
Oxford has a fairly large portion of its business in the NYC area, of course,
and the stock sold off late Friday afternoon on the news. The selloff continued
on Monday, as well, before recovering somewhat after a few analysts voiced
their belief that the selling was unjustified.
According to a Reuters story that came out earlier today, analyst John Penshorn,
at Piper Jaffray, figures that Oxford will continue to do well because their
prime market areas remain highly underpenetrated. "In (Oxford's) case," he
said, "the Medicare opportunity in their market is absolutely huge."
A Bloomberg story quotes Todd Richter at Dean Witter Reynolds as saying,
"You can say it's bad for Oxford, but I' am not going to cry for anybody
getting paid $8.400 a year" per Medicare patient.
After the market closed this afternoon, Oxford issued its own press release.
The company said it had received notice from HCFA "that its Medicare Advantage
programs will receive weighted average premium rate increases of approximately
1.10% in New York, 6.92% in New Jersey and 4.93% in Connecticut for the year
beginning January 1, 1997. The overall weighted average increase in the New
York metropolitan area based on current enrollment is approximately 1.59%."
"The increase is within the range anticipated by the Company and will permit
us to continue to provide high-quality, cost-effective service to our more
than 110,000 Medicare beneficiaries," according to Andrew Cassidy, Oxford's
CFO.
I've got a call in to Oxford, and as soon as I learn anything, I'll let you
know. The Borefolio continues to hold OXHP.
Cisco gained a buck today, despite an unfavorable mention in a column by
Barron's Alan Abelson. For reasons I don't understand, Abelson persists in
using outdated data and inappropriate indicators of valuation to shore up
his complaints about the overvaluation of tech stocks, one and all. Abelson
apparently sees no difference between, on the one hand, Cisco and Microsoft
(which both appear on his hit list) and, say, Quintiles or SystemSoft.
In any event, Cisco and Intel announced today a series of technological advances
for mulitcast delivery of high quality multimedia over the Internet. A demo
will be shown between the Intel and MCI booths at the upcoming Networld+Interop
show in Atlanta, September 18-20. These underlying technologies are also
being used in networked multimedia trials announced in June by Cisco, Intel
and MCI.
Cisco is providing a new version of its IOS software that offers IP Multicast,
RSVP and RTP. According to the press release, IP Multicast allows a single
transmission along a path to service of Multicast receivers. With IP Multicast
a single server can transmit a single multimedia stream that can be received
by hundreds or even thousands of PC clients (that have the viewer software).
RSVP allows software developers to "reserve" bandwidth on the Internet to
deliver real-time video and audio data streams. Without RSVP, multimedia
streams are subject to break-up caused by congestion on the Internet.
Finally, RTP is a packet format that enables synchronization and recovery
from delay variation and packet loss.
For its part, Intel is providing PC-RSVP, which runs on a user's PC (using
Windows NT or Windows 95) and enables PC clients to take advantage of the
technologies provided by Cisco.
Windows NT and Windows 95 are computer operating systems, Mr. Abelson. They're
made by that company Microsoft that you mentioned in your column. A computer
is a -- oh, never mind.
(c) Copyright 1996, The Motley Fool. All rights reserved. This material is
for personal use only. Republication and redissemination, including posting
to news groups, is expressly prohibited without the prior written consent
of The Motley Fool.
Transmitted: 9/9/96
Monday, September 9, 1996
BGP +1 1/8 ...CSL + 1/8 ...CSCO +1...GNT + 5/8 ...OXHP -1 3/8
...PMSI - 1/8 ...SHAW -1 1/8 ...SPY +25/32...TXI - 3/4 ...
*Scroll down or expand screen for full portfolio accounting
Day Month Year History
BORING +0.31% -0.72% 7.13% 7.13%
S&P 500 +1.23% 1.81% 6.78% 6.78%
NASDAQ +0.82% 0.63% 10.35% 10.35%
Rec'd # Security In At Now Change
4/12/96 100 The Shaw Gr 18.84 30.38 61.21%
2/28/96 200 Borders Gro 22.51 32.75 45.48%
1/29/96 100 Texas Indus 54.50 65.38 19.95%
2/2/96 200 Green Tree 30.39 35.13 15.59%
3/8/96 400 Prime Medic 10.07 11.25 11.73%
7/23/96 100 S&P Deposit 64.15 66.72 4.00%
6/26/96 100 Cisco Syste 53.90 54.25 0.65%
8/13/96 100 Carlisle Co 52.65 52.38 -0.52%
5/24/96 100 Oxford Heal 48.02 41.50 -13.59%
Rec'd # Security Cost Value Change
2/28/96 200 Borders Gro 4502.49 6550.00 $2047.51
4/12/96 100 The Shaw Gr 1884.16 3037.50 $1153.34
1/29/96 100 Texas Indus 5449.99 6537.50 $1087.51
2/2/96 200 Green Tree 6077.49 7025.00 $947.51
3/8/96 400 Prime Medic 4027.49 4500.00 $472.51
7/23/96 100 S&P Deposit 6414.99 6671.88 $256.89
6/26/96 100 Cisco Syste 5389.99 5425.00 $35.01
8/13/96 100 Carlisle Co 5264.99 5237.50 -$27.49
5/24/96 100 Oxford Heal 4802.49 4150.00 -$652.49
CASH $4428.44
TOTAL $53562.82