THE WIRED INVESTMENT PORTFOLIO
It's usually been the WIP's style to focus on small companies, but with the small-cap-oriented Russell 2000 up only 6 percent this year versus the S&P 500's 18.7 percent, last month's large-cap tech purchases of Microsoft and additional Intel shares proved to be the right move. Despite my obviously bad strategy of shorting Yahoo! shares (the last of which I've now covered), the WIP was up 3.5 percent in June.
I'm playing the seemingly ceaseless demand for Internet stocks by buying America Online. I like its business model better than Yahoo!'s: AOL has 12 million actual paying subscribers, and its content dwarfs the competition's. Best of all, it's trading just over a mere six times expected 1999 sales, a bargain by Net stock standards.
BioChem Pharma fared very well at June's World AIDS conference: DuPont reported that early clinical trials of its Sustiva drug, in combination with AZT and BioChem's 3TC, yielded suppressed HIV replication in 95 percent of patients receiving this therapy.
Chipset maker MMC Networks is up 30 percent since I got in, and I think more design wins should spark further appreciation. I'm looking for an announcement that Fusion has partnered with a big pharmco to market its FloSeal Matrix blood coagulant; I think it'll make Fusion stock jump, at which point I'll take profits. I'm also looking for further telecom consolidation to drive up Sprint. If nothing happens over the next few months, I'll move elsewhere.
Company Primary Business Symbol Shares Close 7/1 Current Value Since Purchase
HOLDING
| BioChem Pharma | Pharmaceuticals | BCHE | 8,000 | 24 3/8 | $195,000 | + 15%
| CellPro | Biotech medical dev | CPRO | 30,000 | 3 1/16 | 91,875 | – 16%
| Cisco Systems | Network hw/sw | CSCO | 3,000 | 94 9/16 | 283,688 | + 57%
| Dura Pharmaceuticals | Pharmaceuticals | DURA | 4,000 | 22 5/16 | 89,250 | – 6%
| Fusion Medical | Medical eqpt | FSON | 45,000 | 4 | 180,000 | – 9%
| Intel | Microchips | INTC | 3,000 | 75 3/16 | 225,563 | + 64%
| MMC Networks | Microchips | MMCN | 7,500 | 31 3/4 | 238,125 | + 30%
| Microsoft | Software | MSFT | 2,000 | 109 3/8 | 218,750 | + 31%
| Oracle | Database sw | ORCL | 5,000 | 24 1/16 | 120,313 | + 5%
| Pfizer | Pharmaceuticals | PFE | 1,500 | 107 3/16 | 160,781 | + 8%
| Remedy | Help desk sw | RMDY | 7,500 | 17 | 127,500 | – 23%
| Sprint | Telecom | FON | 2,750 | 71 5/16 | 196,109 | + 8%
COVERING SHORT
| Yahoo! | Internet sw | YHOO | -1,500 | 169 7/8 | 254,813 | -157%
BUYING
| America Online | Online services | AOL | 2,000 | 110 3/4 | 221,500
Cash $ 50,781
Portfolio Value 7/1 $ 2,399,234
Portfolio Value 6/1 $ 2,317,120
One-Month Portfolio Performance +3.5% Russell 2000 Index +1.9%
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.
"The problem with telling novice investors how to buy over-the-counter stocks is that it's like telling people you can get high from a can of Reddi Whip – they just might go out and do it." Cromwell Coulson, publisher of Pink Sheets, a professional quotation directory of thinly traded small-caps.
– Jeffery Wardell (jwardell@hamquist.com)
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