Quarterly portfolio report.

investmenttool.com Cover Story

When recovering from a weekend bout with the flu (it won TKO) and lacking any real energy there is always a way out of writing anything serious. Take a look at past results. As luck would have it the fiscal quarter ended on Friday and that’s a great time to look at our portfolios and evaluate our by and hold strategy.

S&P 500

In a very stealthy manner our suffering S&P 500 portfolio gradually clawed its way to profitability since the last time we looked hard at it. With a profit of 2.38% the S&P is right on course for an annualized increase of 9.52%. If one of Mr. Greenspan’s goals is bringing stock growth back to historical norms, he has succeeded here. Over the past 70 years, the S&P has grown at a rate of just under 11%.

Technology

Our technology portfolio turned in a pretty decent quarter with growth slightly over 18%. The big winners were Intel(60%) and Cisco(44%). IBM turned in a solid (9.7%) quarter. Dell started the quarter badly but snuck out with a 5.8% gain. Lucent dropped 18% on an earnings warning and Microsoft lost 9% on worries about its future after losing its anti trust law suit with the government.

Band Width

No losers here. Ciena, up 119% for the quarter led the pack. JDS Uniphase came in second at 49% even after a serious stumble at the end of the quarter on earnings expectations. PMCS brought up the rear at 27%. Any of these stocks would have been a welcome addition to any portfolio. The portfolio is up 65% for the quarter. At 30% cash, this portfolio is well positioned to take advantage of any serious market pullback.

Internet

Yahoo and AOL had tough quarters and as a result this portfolios dipped almost 17%. Based on these companies actual revenues and earnings, that is a pretty decent performance.

Mutual Fund.

Led by Intel and Cisco, this diversified fund provided a solid return with sharply lower risk than any of our other portfolios. Sun Microsystems 21% quarter represents a slowdown for the giant. Banc One’s decision to change management turned a loser quarter into a winner quarter for the financial giant. America Online and Lucent were the drags on this 8.1% first quarter gainer.

Now look at that. We spent nothing on brokerage commissions this quarter and still managed to make money. Take that daytraders.

Shmuel Protter
investmenttool.com

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