Boring Portfolio Report
ANN ARBOR, Mich. (Sept. 16) -- Stocks continued strong on Monday, with the
Dow and the S&P 500 eclipsing the record highs they set on Friday. The
DJIA gained 51 points to close at 5889. The S&P 500 added 3.44 points
(+0.51%). NYSE volume of 426 million shares was impressive for a Monday.
Meanwhile, the Nasdaq index added 5 points to close at 1194 (+0.44%).
The Boring Portfolio lagged the major market averages today but rose a decent
0.31% in net asset value, nevertheless. Weakness in shares of Carlisle Companies
and Texas Industries slowed the Borefolio's progress down a bit, but Oxford
Health Plans, Cisco Systems, and our stake in the S&P 500 (through the
Amex-traded Spiders) helped provide the fuel to motor into new high ground.
With Oxford's advance today, all nine holdings in the Boring Portfolio are
now in positive territory. Hurray!
A blizzard of news from networking companies hit the wires on Friday, and
a number of networking stocks were up sharply, Cisco among them. The stock
established a new high of $59 3/4 ($59 5/8, bid) today on healthy volume
of over 9 million shares.
The new high is appropriate, given the announcement that Cisco made this
morning: Cisco introduced a new multilayer switching technology for scaling
router and switch backbones, called "tag switching." The techno-geeks tell
me that this could be a very big deal.
As you may have noticed, a number of stories have appeared recently that
have predicted impending "brown-outs" on the Internet. The problem is the
exponential growth in traffic that is stressing the Internet's router backbone
-- approximately 80% of which carries the Cisco label. Tag switching is the
latest way that Cisco is addressing this issue.
According to Cisco's press releases, tag switching provides a new means for
routers to manage data traffic in ways currently offered only by switched
networks, while at the same time allowing switched networks to scale in the
same manner as today's routers.
Tag switching assigns a label or "tag" to data packets traversing the network
of routers and switches that constitute the physical Internet or companies'
private "intranets." In a conventional router network, each packet must be
processed by each router to determine the next hop of the packet toward its
final destination. In a tag switching network, tags are assigned to destination
networks or hosts. Packets then are switched through the network with each
node simply swapping tags rather than processing each packet. (Even I can
grok that this is much faster and more efficient.)
With tag switching, packet flows can be directed across the router network
along pre-determined paths rather than along the hop-by-hop routes
of normal routed networks. This enables routers to perform advanced traffic
management tasks, such as load balancing, in the same manner as ATM or Frame
Relay switches.
To quote Cisco's chief technology officer, Ed Kozol, "The best way to achieve
scalable performance is through multilayer switches, which combine the best
aspects of routers and switches." Cisco will introduce Tag Switching on its
high-end, Cisco 7500 series routers and Cisco StrataCom BPX switches. The
technology will later be available as a software upgrade on other routers
and switches.
"We believe the industry will greatly benefit from Tag Switching's ability
to alleviate bottlenecks in Internet and intranet backbones," Kozel continued.
"And we welcome the industry's help in refining and finalizing our Tag Switching
mechanism."
While the folks at Cisco were introducing their new technology, the podnahs
at Texas Industries were making some news of their own. TXI announced today
that the company is marketing a patented cement manufacturing process called
CemStar.
According to the company, the CemStar process can increase cement plant capacity
by 5 to 15 percent. The process uses "slag," a by-product of steel-making.
By adding the slag into a cement kiln along with other feedstock materials,
total production capacity of the kiln is increased.
TXI gets all the slag it needs from its 84%-owned Chaparral Steel plant,
a minimill that produces construction beams and other products by melting
down old cars and other steel scrap.
The cement produced is the same quality Portland cement as that made with
standard raw materials, TXI said. A subsidiary, CemStar Inc., has been formed
to market and license the product worldwide. According to the press release,
a licensing agreement with North Texas Cement Co. has been concluded, and
negotiations with other cement companies are in process.
"Developing new ideas for recycling has been a key strategy for both TXI
and Chaparral," said TXI's President Robert Rogers in the press release.
"With CemStar, cement production is increased with the additional positive
environmental benefits of reducing per unit fuel consumption and recycling
slag." Currently, slag utilization is generally limited to road base, fill
material and railroad ballast, the company noted.
There's Boring investing for ya -- great stocks of great companies, whether
they're developing new technologies for the information superhighway or for
the concrete driveway.
(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: 9/16/96
Monday, September 16, 1996
BGP +1 5/8 ...CSL -1 3/4 ...CSCO + 3/4 ...GNT - 1/2 ...OXHP +1 3/4
...PMSI + 1/8 ...SHAW - 1/2 ...SPY +17/64...TXI -1 1/2 ...
*Scroll down or expand screen for full portfolio accounting
Day Month Year History
BORING +0.31% 5.09% 13.39% 13.39%
S&P 500 +0.51% 4.91% 10.03% 10.03%
NASDAQ +0.44% 4.59% 14.70% 14.70%
Rec'd # Security In At Now Change
4/12/96 100 The Shaw Gr 18.84 31.75 68.51%
2/28/96 200 Borders Gro 22.51 36.63 62.69%
3/8/96 400 Prime Medic 10.07 13.13 30.35%
2/2/96 200 Green Tree 30.39 36.50 20.12%
1/29/96 100 Texas Indus 54.50 62.38 14.45%
6/26/96 100 Cisco Syste 53.90 59.63 10.62%
7/23/96 100 S&P Deposit 64.15 68.81 7.27%
5/24/96 100 Oxford Heal 48.02 48.50 0.99%
8/13/96 100 Carlisle Co 52.65 52.88 0.43%
Rec'd # Security Cost Value Change
2/28/96 200 Borders Gro 4502.49 7325.00 $2822.51
4/12/96 100 The Shaw Gr 1884.16 3175.00 $1290.84
2/2/96 200 Green Tree 6077.49 7300.00 $1222.51
3/8/96 400 Prime Medic 4027.49 5250.00 $1222.51
1/29/96 100 Texas Indus 5449.99 6237.50 $787.51
6/26/96 100 Cisco Syste 5389.99 5962.50 $572.51
7/23/96 100 S&P Deposit 6414.99 6881.25 $466.26
5/24/96 100 Oxford Heal 4802.49 4850.00 $47.51
8/13/96 100 Carlisle Co 5264.99 5287.50 $22.51
CASH $4428.44
TOTAL $56697.19