The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (Apr. 14, 1997)

A couple of Dow stocks posted decent earnings today, but the market was in neutral for most of the day. Only a last-hour buy program managed to move the index, but even that was on anemic volume. GENERAL MOTORS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GM)") else Response.Write("(NYSE: GM)") end if %>, COCA-COLA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KO)") else Response.Write("(NYSE: KO)") end if %>, TRAVELERS GROUP <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TRV)") else Response.Write("(NYSE: TRV)") end if %> and GOODYEAR <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GT)") else Response.Write("(NYSE: GT)") end if %> all beat consensus estimates for the first quarter of 1997.

The real focus today is on bellwether INTEL <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTC)") else Response.Write("(Nasdaq: INTC)") end if %>, which reported earnings after the bell. Ahead of the announcement, Intel gained a couple of points on optimism that Intel would match those mythical "whisper" numbers that analysts don't publish, but pass on privately to their clients. And lo and behold, Intel indeed met the whisper number of $2.20 a share. The consensus number was $2.07. In after-hours trading, the stock rebounded a few points immediately following the earnings release, then dropped a few points as traders tried to parse out the details from the report.

It's hard to get a handle on the interplay between rising interest rates and good first-quarter profits, however, since the Fed didn't hike rates until recently. The affect of rising rates isn't going to show up in this first-quarter earnings season. So predicting where earnings go from here will be an even dicer-than-usual enterprise.

That doesn't mean there aren't good stocks in which to invest in a rising interest-rate environment, but it does mean you can't simply buy almost anything and expect it to fare well, as seemed to be the case in 1995 and 1996 when the market recorded historically high gains.

Homework and collaborative research, then, becomes all the more helpful in the future. Recently we've seen a number of group projects undertaken by readers of the Foolish Workshop, fulfilling precisely the goals of the area: bringing interactivity to a new level for the individual investor as a way of leveling the playing field between the individual and the institutional investor.

In recent months we've seen how hard it is to choose even a handful of good stock ideas. We should be thankful we're not having to choose hundreds for a mutual fund portfolio. That remains the biggest advantage the individual investor has over institutional investors.

Hang in there. It may well get uglier and what's required is calm, well-reasoned decisions, not panic-driven impulses. Let's work on the tasks together and we'll all be better off for it.

Monthly Growth Screens
(Jan. 3 to present)
 16.24%  Relative Strength  
  1.16%  YPEG Potential  
 -0.58%  S&P 500 Index  
 -3.90%  Low Price/Sales  
 -4.68%  Investing for Growth  
-16.93%  EPS Plus RS  
-22.45%  Unemotional Growth  
-23.84%  Formula 90  

Annual Value Screens
(Jan. 1 to present)
 3.08%  Dogs of the Dow  
 0.55%  Beating the S&P  
 0.06%  Dow Jones Ind Avg  
-5.36%  Unemotional Value  
-5.36%  Beating the Dow  
-5.42%  Dow Combo  
-8.72%  Foolish Four