THE WIRED INVESTMENT PORTFOLIO
As the latest hurricane whips through Wall Street, our big-is-beautiful strategy has kept us reasonably well sheltered. All indices were in the red for July, with the small-cap Russell 2000 leading the way, correcting over 10 percent for the month. While the unsettled times might last, I'm not running for cover quite yet.
Still maneuvering for higher returns, I'm unloading the sleepy Sprint and buying Qwest. While its stock is far from inexpensive, the next-generation telco's fiber network is scheduled to be completed by mid-1999, and new marketing alliances should push the stock higher in the meantime.
Despite a quiet move up, I'm ready to unload Oracle as it faces increasing competition from Microsoft, SAP, and PeopleSoft. SAP recently listed American Depositary Receipts, which makes it easier for investors to buy the shares on the NYSE and may spur some institutional switching into the German company (compare SAP's stock movement to with Oracle's performance to see if this starts happening).
I'm also selling Dura Pharmaceuticals, which is an emerging pharma at a time when most investors prefer the large pharmas. Instead, I'm buying Power Integrations, which supplies high-voltage power converters for use in cellular phones, PCs, and cable and DBS systems. Even though it handily beat second-quarter estimates, the company has been trading close to its December IPO price of US$8 per share, and a healthier semiconductor sector should take it back to the previous high of $14. Meanwhile, as these troubled times dictate, I'll ride the coattails of the big-and-still-beautiful companies in the fund.
| Company| Primary Business| Symbol| Shares| Last Trade 8/3| Current Value| Since Purchase
HOLDING
| America Online | Online services | AOL | 2,000 | 116 15/16 | $233,875 | + 6%
| BioChem Pharma | Pharmaceuticals | BCHE | 8,000 | 23 1/2 | 188,000 | + 11%
| CellPro | Biotech medical dev | CPRO | 30,000 | 3 5/16 | 99,375 | – 9%
| Cisco Systems | Network hw/sw | CSCO | 3,000 | 96 1/2 | 289,500 | + 60%
| Fusion Medical | Medical eqpt | FSON | 45,000 | 3 1/4 | 146,250 | – 26%
| Intel | Microchips | INTC | 3,000 | 84 13/16 | 254,438 | + 85%
| Microsoft | Software | MSFT | 2,000 | 108 7/16 | 216,875 | + 29%
| MMC Networks | Microchips | MMCN | 7,500 | 19 7/16 | 145,781 | – 20%
| Pfizer | Pharmaceuticals | PFE | 1,500 | 109 11/16 | 164,531 | + 11%
| Remedy | Help desk sw | RMDY | 7,500 | 11 13/16 | 88,594 | – 47%
BUYING
| Power Integrations | Microchips | POWI | 10,000 | 8 1/2 | 85,000
| Qwest | Telecom | QWST | 3,000 | 39 | 117,000
SELLING
| Dura | Pharmaceuticals | DURA | 4,000 | 25 1/8 | 100,500 | + 6%
| Oracle | Database sw | ORCL | 5,000 | 26 5/8 | 133,125 | + 16%
| Sprint | Telecom | FON | 2,750 | 70 | 192,500 | + 6%
Cash| $| 274,906
Portfolio Value 8/3| $| 2,304,125
Portfolio Value 7/1| $| 2,399,234
One-Month Portfolio Performance-4.0%Russell 2000 Index| -10.11%
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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