The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (Apr. 23, 1997)

There was a reversal of fortunes today among technology stocks. After lagging the blue chips desperately, the Nasdaq posted a hefty gain on the coattails of bellwethers INTEL <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTC)") else Response.Write("(Nasdaq: INTC)") end if %> and MICROSOFT <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MSFT)") else Response.Write("(Nasdaq: MSFT)") end if %>.

But the big stars weren't the only winners. Stocks like PEOPLESOFT <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PSFT)") else Response.Write("(Nasdaq: PSFT)") end if %> went ballistic after posting solid earnings. PeopleSoft jumped nearly 22% today after posting earnings of 14 cents per share. First Call estimates called for 12 cents. Also boosting the issue was an upgrade by Smith Barney from "outperform" to "buy."

With a decent gain in ASCEND COMMUNICATIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ASND)") else Response.Write("(Nasdaq: ASND)") end if %> as well, it was the first positive sign of life for the Unemotional Growth model this year. Earlier in the month, UG stock MOSINEE PAPER <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MOSI)") else Response.Write("(Nasdaq: MOSI)") end if %> made a strong move, but by itself, it wasn't enough to salvage the portfolio in April from a dreadful first quarter.

No one knows what lies ahead, of course, but April seems to be fulfilling a pattern the ten years of history for UG has demonstrated several times. After many periods of two or three weak months in a row, the model often comes back strong, even with many of the same stocks that lost ground in the previous months. I'm not willing to say I know why this has happened so often, but it does seem to happen with some regularity.

All told, it's still a weak beginning to 1997, but the year's a long way from over and a couple of strong months can bring the model right back. Today sure was a helpful push in the right direction.

Those wondering how volatile this model is, though, need only look at the first four months of this year. To ride the swings out in a completely disciplined manner may require a control over one's emotions most of us don't have. It's almost like Tiger Woods being five or six holes down going into the final 18 holes of his third U.S. Amateur. Any panic at that stage would have doomed him for sure. But he stuck with his game plan, focused, stayed disciplined, and of course, triumphed. A little Eye of the Tiger may be what's needed to be completely Unemotional.

Monthly Growth Screens
(Jan. 3 to present)
  9.52%  Relative Strength  
  3.42%  S&P 500 Index  
 -2.35%  Low Price/Sales  
 -7.31%  YPEG Potential  
-14.13%  Investing for Growth  
-22.06%  EPS Plus RS  
-22.14%  Unemotional Growth  
-28.54%  Formula 90  

Annual Value Screens
(Jan. 1 to present)
 6.64%  Dogs of the Dow  
 5.65%  Dow Jones Ind Avg  
 3.04%  Beating the S&P  
-2.26%  Unemotional Value  
-2.26%  Beating the Dow  
-3.29%  Dow Combo  
-7.63%  Foolish Four