The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (Feb. 12, 1997)

He shoots. He scores! They steal the inbounds pass. And it's another 3-pointer! The market racked up gains today almost as fast as my beloved Kentucky Wildcats score when their pressure defense is in high gear.

Picking up more than 100 points today, the Dow slammed through 6,900 and is within a free throw of 7,000. The S&P 500 also scored a record high today. And while the Nasdaq Composite didn't set a new record, it won the three-point shooting contest, picking up more than 27 points, or the rough equivalent of 135 Dow points.

In other words, the recent slide for technology stocks saw an abrupt end today, partly the result of a wonderful earnings report by semiconductor-equipment maker APPLIED MATERIALS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMAT)") else Response.Write("(Nasdaq: AMAT)") end if %>. After dropping for a few days as the networking stocks dragged the group down, today's rebound for technology stocks was fast and powerful.

It was a little bit of a curious rally, though, in that the bond market was down slightly. It's not terribly often that we'll see a huge rally in the Dow with the bond market going the opposite direction. But with renewed evidence that people are still investing regularly in the market (albeit in mutual funds), Wall Street bid up most stocks today.

Will the rally continue tomorrow, next week, the rest of February? I have no idea. And frankly, I don't spend much time thinking or worrying about it since I know how bad my intuition on these things generally is. (You should see me on my once-a-year trip to the horse races. Talk about a reverse indicator!)

But declines like we've seen recently and then somewhat rapid increases like today's are all part of the long season in investing. In fact, my basketball comparison is pretty accurate in that the best teams, like the best investing approaches, rarely go undefeated. Even the best of the best will lose a game or so along the way. But by winning the majority of the time, you create basketball (and investing) dynasties.

The stock market is about as efficient as the NCAA. You think Dean Smith, Rick Pitino, and Coach K are just luckier than their peers? Not likely. Over the long haul, the best approaches will out, in sports, investing, whatever. Grab yourself a home-court advantage and start your own dynasty.

Monthly Growth Screens
     (Jan. 3 to present)
21.12%  Relative Strength  
17.64%  YPEG Potential  
10.04%  Low Price/Sales  
  7.32%  S&P 500 Index  
  3.34%  Investing for Growth  
 -7.08%  EPS Plus RS  
 -7.78%  Unemotional Growth  

Annual Value Screens
     (Jan. 1 to present)
  7.96%  Dow Jones Ind Avg  
  7.13%  Beating the S&P  
  6.74%  Dogs of the Dow  
  3.61%  Dow Combo  
  3.09%  Unemotional Value  
  3.09%  Beating the Dow  
  0.96%  Foolish Four