By Jeffery Wardell (jwardell@hamquist.com)
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May's market downturn sent many investors into bonds or Dow blue chips. To me, the dip was a signal to do some damage control and to buy big, depressed tech stocks, which historically recover faster than small fry.
Thus I've lost patience with Forte Software's protracted non-turnaround. The WIP is also taking short-term losses in KLA-Tencor and (even though I bought it just a month ago) Sanmina, both of which crashed through crucial support levels in May. I'm also keeping an eye on CellPro; if it loses its pending patent-infringement appeal, it's dead money. I'll quickly put more cash into small caps when they start to show some spark.
For now, I'm putting my faith in the trusts. Competition in sub-US$1,000 PCs and a delayed next-generation Merced chip have beaten Intel awfully low – too low to resist. And there's a certain Redmond, Washington, firm that's way off its 52-week high of 991/8 . The Justice Department tango has presented an opportunity to pick up MSFT shares at a sale price.
Excel misadventure: An accounting error associated with my short position in Yahoo! caused us to understate the WIP's cash by $297,000 in each of the past four months. The fund's overall performance, though, has been accurately reported throughout.
Company Primary Business Symbol Shares Close 6/1 Current Value Since Purchase
HOLDING
| BioChem Pharma | Pharmaceuticals | BCHE | 8,000 | 25 11/16 | $205,504 | +21%
| CellPro | Biotech medical dev | CPRO | 30,000 | 2 15/16 | 88,140 | -19%
| Cisco Systems | Network hw/sw | CSCO | 3,000 | 73 9/16 | 220,686 | +22%
| Dura Pharmaceuticals | Pharmaceuticals | DURA | 4,000 | 26 1/32 | 104,125 | + 9%
| Fusion Medical | Medical eqpt | FSON | 45,000 | 3 15/16 | 177,210 | -10%
| Intel | Microchips | INTC | 2,000 | 68 | 136,000 | +96%
| MMC Networks | Microchips | MMCN | 7,500 | 25 7/8 | 194,063 | + 6%
| Oracle | Database sw | ORCL | 5,000 | 22 13/16 | 114,060 | – 1%
| Pfizer | Pharmaceuticals | PFE | 1,500 | 103 7/8 | 155,813 | + 5%
| Remedy | Help desk sw | RMDY | 7,500 | 15 11/16 | 117,660 | -29%
| Sprint | Telecom | FON | 2,750 | 71 15/16 | 197,830 | + 9%
| Yahoo! (short) | Internet sw | YHOO | -1,500 | 104 3/8 | 156,563 | -58%
BUYING
| Microsoft | Software | MSFT | 2,000 | 83 3/4 | 167,500
| Intel | Microchips | INTC | 1,000 | 68 | 68,000
SELLING
| Forte Software | Software | FRTE | 15,000 | 5 1/16 | 75,930 | – 60%
| Sanmina | Tech contract mfg | SANM | 1,750 | 74 13/16 | 130,921 | – 20%
| KLA-Tencor | Semiconductor eqpt | KLAC | 3,500 | 31 1/4 | 109,375 | – 24%
Cash | $ | 527,093
Portfolio Value 6/1 | $ | 2,317,120
Portfolio Value 5/1 | $ | 2,527,633
One-Month Portfolio Performance | -8.3% Russell 2000 Index | -7.0%
Legend: This fund started with US$1 million on December 1, 1994. We are trading on a monthly basis, so profits and losses will be reflected monthly, with profits reinvested in the fund or in new stocks. The Wired Investment Portfolio (formerly TWIT$) is a model established by Wired, not an officially traded portfolio. Jeffery Wardell is a senior vice president executive financial services representative for Hambrecht & Quist LLC and may have a personal interest in stocks listed in the WIP. The opinions expressed herein are those of the author and not necessarily those of H&Q's research department. H&Q has not verified the information contained in this article and does not make any representations to its accuracy and completeness. Wired readers who use this information for investment decisions do so at their own risk.
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