Boring Portfolio Report
ANN ARBOR, Mich. (Oct. 3) The S&P 500, the Nasdaq composite index, and
the Boring Portfolio each lost approximately two-tenths of a percentage point
in value on Thursday in what could be characterized as quiet, somewhat
apprehensive trading in anticipation of tomorrow's monthly jobs report from
the Federal government.
Friday morning bright and early at 8:30am EDT, we'll get the official
pronouncement about how many new nonfarm jobs were created, what fraction
of the nation's labor force was out of work, and how hourly wages fared during
the month of September.
If you recall the hundred-point-plus nosedives that the market has taken
following a few of these reports earlier this year, you know the drill: fewer
new jobs is good for stocks, increasing unemployment is better yet, and lower
(or at least non-increasing) wages is best of all -- the idea being that
the worse off that workers are, the less likely it is that inflation will
rear its head, and hence the better the situation for equities investments.
I won't try your patience my pointing to all the various holes in this
conventional wisdom (such as that wage-push inflation becomes a valid concern
only if workers' wages are rising faster than the value of the stuff they
produce per hour's work -- and that there is zero evidence this is occurring
and at least some anecdotal data to the contrary).
Suffice it to say that the market doesn't listen to Boring, and so if the
numbers come out good -- which is to say, bad -- tomorrow morning, the market
turmoil could make you carsick if you let it. The fact that we're now in
the month of October, the month of Black Tuesday's and Thursday's and what-not,
probably doesn't help Mr. Market's equipoise much, either.
The wire service interviews with various economic gooroos tell me that what
Mr. Market is expecting tomorrow is nonfarm payrolls up something like 175,000
to (maybe) 250,000, an unemployment rate rising from August's 5.1% to perhaps
5.3%, and wages up at most 0.2% to 0.5%.
Whatever. So far this year, every time the market has panicked over a monthly
macrostat, it's offered us a fine opportunity to snatch a few bargains. Will
that happen again this time around? How in the world should I know? Do I
look like Michael Metz or something?
Oh yeah, Boring stocks. Quick summary: nuthin' much happened today. A couple
of Borefolio holdings went up on Thursday, a few fell (including Borders
Group, which gave back about half of yesterday's $2 1/2 gain), and a couple
were unchanged.
Cisco CEO John Chambers put on his cautious face at the Montgomery Conference
in San Francisco yesterday and tried, once again, to manage analysts'
expectations downward. This time, he pointed to "decreasing visibility" with
regard to future sales, due to customers' ordering equipment less far in
advance than they had in the past. This, he said, could lead "to more variation
in our revenue growth."
An alternative way to think of this is that Cisco's customers are ringing
up and saying, "I need a bushel of routers and a basket of switches -- and
I need them yesterday!!" -- which is a problem all businesses should hope
to have. In any event, CSCO rose $ 7/8 today on volume of over 8 million
shares and set a new intra-day high of $65 1/2 before settling in at $64
5/8 (bid).
Carlisle was the other Borefolio winner today, advancing $ 7/8, also. That
gain established a new high for CSL, at $57 even. Hooray!
(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: 10/3/96
Thursday, October 3, 1996
BGP -1 1/8 ..CSL + 7/8 ..CSCO + 7/8 ..GNT ---..OXHP - 3/8
PMSI ---...SPY - 1/16...TXI - 1/4 ...
*Scroll down or expand screen for full portfolio accounting
Day Month Year History
BORING -0.20% 0.89% 17.43% 17.43%
S&P 500 -0.18% 0.79% 11.45% 11.45%
NASDAQ -0.24% 0.51% 18.46% 18.46%
Rec'd # Security In At Now Change
2/28/96 200 Borders Gro 22.51 38.13 69.35%
3/8/96 400 Prime Medic 10.07 13.38 32.84%
2/2/96 200 Green Tree 30.39 40.13 32.04%
6/26/96 100 Cisco Syste 53.90 64.63 19.90%
8/13/96 100 Carlisle Co 52.65 57.00 8.26%
7/23/96 100 S&P Deposit 64.15 69.41 8.19%
1/29/96 100 Texas Indus 54.50 58.50 7.34%
5/24/96 100 Oxford Heal 48.02 47.38 -1.35%
Rec'd # Security Cost Value Change
2/28/96 200 Borders Gro 4502.49 7625.00 $3122.51
2/2/96 200 Green Tree 6077.49 8025.00 $1947.51
3/8/96 400 Prime Medic 4027.49 5350.00 $1322.51
6/26/96 100 Cisco Syste 5389.99 6462.50 $1072.51
7/23/96 100 S&P Deposit 6414.99 6940.63 $525.64
8/13/96 100 Carlisle Co 5264.99 5700.00 $435.01
1/29/96 100 Texas Indus 5449.99 5850.00 $400.01
5/24/96 100 Oxford Heal 4802.49 4737.50 -$64.99
CASH $8025.95
TOTAL $58716.58