The Daily Workshop Report
by Jim Stevens (MF Tools)

BURLINGTON, VT. (Mar. 20, 1997) -- Well what do you know, finally a day when the broader markets outpaced the big blue chips. Technology stocks didn't take the drubbing they've been taking of late, and I noticed that some of the tech stocks held in the Workshop growth models posted some healthy gains. Whoopee! What's that you say? You were stopped out of all those stocks days or weeks ago? Oh well, back to the Stop Loss Strategy drawing board.

The optional part of the growth investing models that involves setting sell stops is really getting a workout of late. Have we learned anything in real time, or are we left with the information we started with? I'm talking about MF DowMan's sample test that suggested setting relatively loose (20%) sell stops on every stock at each monthly update may improve returns by a few points per year, while tighter selling stops of 15% and 10% may produce too many "whipsaws" and hurt returns.

Personally, I think the very punishing market for the growth models that we've been enduring lately may have begun to illustrate some truths on sell stop performance, but to me there are never going to be any "absolute" truths. As for what will ultimately prove to be the best sell stop discipline for a monthly, quarterly, or yearly growth stock model, the class is still very much in session. I think we have this subject up on the workbench with the bright lights shinning on it. We need to hammer, tweak and prod this question without mercy, but I also think we need not rush to any conclusions that may end up working in some market conditions and fail in others.

Well Fools, time for me to put one of my most treasured tools to work: my bottle opener. Cheers!

Monthly Growth Screens
     (Jan. 3 to present)
   5.10%   Relative Strength   
   4.62%   S&P 500 Index   
   3.73%   Low Price/Sales   
  -0.81%   YPEG Potential   
  -8.65%   Investing for Growth   
 -14.90%   EPS Plus RS   
 -21.50%   Formula 90   
 -23.06%   Unemotional Growth   

Annual Value Screens
     (Jan. 1 to present)
  5.77%   Dow Jones Ind Avg   
  4.45%   Dogs of the Dow   
  4.06%   Beating the S&P   
  0.14%   Dow Combo   
  0.36%   Unemotional Value   
  0.36%   Beating the Dow   
 -4.22%   Foolish Four