Boring Portfolio Report
ANN ARBOR, Mich. (Nov. 11) -- The stock market continued with its own version
of the "Macarena" today: the same upbeat tune, over and over and over. On
Monday the Dow rose *another* 36 points, to a record 6255.60. The S&P
500 gained a point (+0.14%), extending last week's record, and the Nasdaq
climbed 5 (+0.41%), also setting a new high. Hey-y-y, Macarena!
The Boring Portfolio managed a 0.17% increase despite its somewhat defensive
posture, what with a quarter of net assets parked in the money market. Four
Boring stocks advanced, most notably Cisco, while two declined fractionally
and one (Oxford Health) was "unch."
As with the market generally, trading in Borefolio holdings was muted as
the bond market, banks, and government offices were closed in observance
of Veterans Day.
Cisco Systems accounted for all Borefolio-relevant news today. First, Cisco
announced a suite of soup-to-nuts networking packages aimed at Internet Service
Providers. The packages include all the hardware, software, and technical
assistance required to open up your own Internet or intranet operation --
even a financing plan and an array of marketing incentives to ensure that
"it has never been easier or more affordable to do business with Cisco."
Cisco's line-up of "Easy Connection" packages now includes: one for ISDN;
an enhanced version for ISDN and analog dial-up access; a Web Link package
for small and medium-sized businesses that want to set up and maintain their
own Web sites; one for businesses using Novell NetWare in their local environment
to give them complete access to the Internet; and a "Secure Access" offering
that contains "a complete Internet access package and Intranet system for
medium-sized enterprise businesses," containing the PIX firewall and a Cisco
1600 series or 2503 router. I'm waiting for the package for mountain bike
mobile networking.
Cisco also announced that they've gotten Toshiba on board to cooperate in
Cisco's efforts to define standards for next-generation multilayer switching
technology. According to the press release, the joint effort will draw on
Cisco's Tag Switching technology and Toshiba's Cell Switch Router (CSR)
technology. Toshiba demonstrated a prototype of its CSR at Networld+Interop'96
London last week.
If this weren't enough, Cisco basked in the glow of a 40 column-inch puff
piece in Monday's New York Times. Entitled "Routing makes Cisco a powerhouse
of computing," the story details how Citicorp decided "for sanity's sake"
to go with a single contractor to handle all the stuff required to link their
worldwide enterprise. At that point, "the choice became obvious: Cisco."
The Times story proposes that Cisco has quietly come to dominate the networking
business much as Microsoft has become the standard for PC operating systems.
The argument hardly needs repeating to folks who follow Cisco. But it's so
much fun to tell, that I never tire of repeating it. (Ergo, Boring.)
First, Cisco's "supremacy" stems from its leadership position as a hardware
supplier: more than 80% of the routers that help make up the backbone of
the Internet bear the Cisco brand. Cisco is also the #1 or #2 supplier in
virtually every other facet of networking hardware, such that the company
receives 44% of the profits in the entire networking industry.
The second, and perhaps less obvious, element of Cisco's dominance is its
software, which like Windows has become a de fact standard that "runs across
all of our products, our partners' products, and in some cases our competitors'
products," according to Cisco's president and CEO, John Chambers, who is
quoted in the story.
The third ingredient is Cisco's focus on the customer. As noted in the Morgan
Stanley "Internet Report," Cisco's mission statement is: #1, sell networks;
#2, do anything else that promotes #1. Cisco has learned, deep down, that
the big thing that "promotes #1" is a relentless focus on customer satisfaction,
whether the customer is a major multinational corporation or a five-person
start-up. Not only is each Cisco employee's compensation pegged to feedback
on customer satisfaction, CEO Chambers spends a good chunk of his time visiting
customers. Colin Crook, senior tech officer for Citicorp is quoted in the
Times story as saying that "John comes to visit me here in New York once
a quarter. Other companies say 'we listen to the customer,' but you don't
often get the chief executive sitting down with you like that."
I close tonight by noting that Borders will be reporting quarterly earnings
later this week. As always, you'll get the full scoop right here in The Motley
Fool.
Transmitted: 11/11/96
Monday, November 11, 1996
Stock Change Bid
--------------------
BGP + 1/4 35.25
CSL - 3/4 55.13
CSCO +1 3/4 66.38
GNT + 1/8 40.00
OXHP --- 52.25
PMSI - 1/4 11.00
SLR + 1/4 57.00
Day Month Year History
BORING +0.17% 3.24% 15.92% 15.92%
S&P 500 +0.14% 3.77% 17.74% 17.74%
NASDAQ +0.41% 3.37% 21.30% 21.30%
Rec'd # Security In At Now Change
2/28/96 200 Borders Gr 22.51 35.25 56.58%
2/2/96 200 Green Tree 30.39 40.00 31.63%
6/26/96 100 Cisco Syst 53.90 66.38 23.14%
3/8/96 400 Prime Medi 10.07 11.00 9.25%
5/24/96 100 Oxford Hea 48.02 52.25 8.80%
8/13/96 100 Carlisle C 52.65 55.13 4.70%
10/15/96 100 Solectron 54.52 57.00 4.54%
Rec'd # Security In At Value Change
2/28/96 200 Borders Gr 4502.49 7050.00 $2547.51
2/2/96 200 Green Tree 6077.49 8000.00 $1922.51
6/26/96 100 Cisco Syst 5389.99 6637.50 $1247.51
5/24/96 100 Oxford Hea 4802.49 5225.00 $422.51
3/8/96 400 Prime Medi 4027.49 4400.00 $372.51
8/13/96 100 Carlisle C 5264.99 5512.50 $247.51
10/15/96 100 Solectron 5452.49 5700.00 $247.51
CASH $15435.93
TOTAL $57960.93
Transmitted: 11/11/96