For Thursday, July 1, 1999 Drummer Column, Gibbs, 751 words

Lock, stock, and bare all

 

This week I present Part II of my Stock Market Trilogy. I will expose my entire portfolio so you can watch me sink or swim.

I invested $10,000 for the long term in technology stocks and made all my purchases in the last three months. I like the companies I bought, but my timing could have been better. I'm presently in the red down 10-percent. If I had to do it over again, I would have spread my purchases over a year, waiting patiently for each company's stock to dip to a discount.

Oh, well. I'm on the freight train and it has left the station.

Here is my present portfolio and performance:

PSINet 15 shares                     down 16 points

Qwest 20 shares                      down 11 points

AT&T 20 shares                      down 6 points

Sunrise lasers 375 shares        down 1 point

OpenRoute 50 shares              even

DCH Tech. 200 shares            even

Federal Express 20 shares      up 2 points

VISX lasers 12 shares             up 11 points

At some point I hope to at least double my investment. I don't intend to add many more companies. Mostly, I'll be increasing the stock in my best performers and practicing my timing. There may be a big Y2K sale this fall or winter. Ho. Ho. Ho.

Here is summary of my reasons and excuses:

PSINet is the oldest and largest independent-facilities-based Internet Service Provider for business accounts in the world. It is the AOL of the business sector. Presently they are buying small ISPs around the world with a goal of being at least 3rd in the top 20 global markets. Presently they are doing more buying than selling.

Qwest has run 40 times more fiber optic cable across the USA than the entire Internet uses today. It leases its lines to any communications company that wants them. It is an essential component for a higher-speed Internet, which is a future certainty. It is also the 4th largest long-distance phone company in the USA. It recently lost a bid to acquire U.S. West and Frontier Communications, pushing its normally rising stock down far below what I paid for it.

AT&T because I believe. The Big T, now known as Ma Cable, has purchased TCI, MediaOne, and several other cable companies in its grand attempt to consolidate Internet, TV, local and long-distance phone service into one wire. I see that clustering of services as an inevitable future event and want to be there at the onset.

Sunrise (SNRS) I talked about last week. It is my big gamble. I have $4,635 dollars invested. It will either make or break my first-generation portfolio.

OpenRoute makes expansion routers for businesses that have outgrown their core CISCO systems. They add extra connectivity to existing branch offices, tying their intranet closer together. At $3 a share, we bought them on impulse, and because they made a deal to provide routers to PSINet. OpenRoute is my wife's favorite stock. I don't know why. She doesn't know a router from a Roto-Rooter.

DCH Technologies I bought because I'm fascinated by their product, which is a good decade away from full utilization. They make fuel cells -- cheap-hydrogen-based electricity. Fuel cells will one day power everything from cell phones to houses, vehicles, ocean liners and towns. Ford just revealed its P2000 fuel cell car in January. DCHT makes portable fuel cells and is heading a Dept of Energy research team of 22 companies in designing fuel cells for ocean liners. To see a clarifying animation of fuel cells visit www.ballard.com. DCHT also makes hydrogen detectors for tracking the decay of steel bridges and buildings. They are a penny stock at 87-cents.

Federal Express delivers. I see two new business models -- 1) stores without inventories. When a customer purchases a floor model item, a duplicate is shipped overnight by FedEx, not trucked out from the back room. 2) Internet shopping extraordinaire. I don't know if FedEx will dominate over UPS, a private company, or the US Postal Service, but it will grow considerably.

VISX lasers, I mentioned last week. I got VISX at a great price by accident. On a whim I put in a limit order to buy if VISX dropped 8 points, which I didn't expect to happen. Then a law suit against a VISX patent surfaced. The stock dove 9 points. My order completed. VISX got the suit tossed out, and the next day it rose 17 points.

Next week -- a consolidation of experts.