The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (May 1, 1997)

In today's fribble, we ran a classic piece Tom Gardner wrote some year and a half ago. In the article, Tom revisited what he called a "simpleton" approach to investing, choosing top quality stocks with little or no debt, positive cash flow, and strong name brands.

Tom's thesis was that choosing a group of stocks this way gives investors the opportunity to play Rip Van Winkle with the market. Buy them, forget them, and wake up a decade later and re-evaluate.

Always keeping an eye towards accountability, let's look at the list of ten stocks Tom outlined when he first wrote about the approach in July of 1995. Here are the returns for the Simpleton 10 since July 10, 1995:

MICROSOFT <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MSFT)") else Response.Write("(Nasdaq: MSFT)") end if %> 153%
INTEL <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTC)") else Response.Write("(Nasdaq: INTC)") end if %> 125%
AMERICA ONLINE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AOL)") else Response.Write("(NYSE: AOL)") end if %> 77%
THE GAP <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GPS)") else Response.Write("(NYSE: GPS)") end if %> 77%
TEXAS INSTRUMENTS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TXN)") else Response.Write("(NYSE: TXN)") end if %> 26%
HEWLETT-PACKARD <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HWP)") else Response.Write("(NYSE: HWP)") end if %> 31%
SILICON GRAPHICS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SGI)") else Response.Write("(NYSE: SGI)") end if %> -65% oops!
SUN MICROSYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SUNW)") else Response.Write("(Nasdaq: SUNW)") end if %> 127%
CISCO SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CSCO)") else Response.Write("(Nasdaq: CSCO)") end if %> 93%
DELL COMPUTERS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DELL)") else Response.Write("(Nasdaq: DELL)") end if %> 440%

Average Return 108.4%
S&P 500 43.7%

Even with a 65% haircut in one of the ten stocks, there's no denying that the performance since Tom wrote his piece has been stellar. More than doubling the S&P 500 in a strong period for that index is no mean feat, and to do so with a "simpleton" approach requiring nothing beyond the initial purchases is wonderful.

Check back in another year or two and we'll peek in again. Fool on!

Don't forget that tomorrow closes out our "April" accounting in the Workshop and the May screens will take effect beginning Monday. Look for the new Workshop Database sometime late Saturday or early Sunday if you're on AOL (a little later if you're a web-based reader).

Monthly Growth Screens
(Jan. 3 to present)
 18.46%  Relative Strength  
  6.74%  S&P 500 Index  
  3.46%  Low Price/Sales  
 -3.72%  YPEG Potential  
 -7.41%  Investing for Growth  
-16.66%  EPS Plus RS  
-16.80%  Unemotional Growth  
-23.60%  Formula 90

Annual Value Screens
(Jan. 1 to present)
 8.19%  Dow Jones Ind Avg  
 7.60%  Dogs of the Dow  
 5.33%  Beating the S&P  
 0.64%  Unemotional Value  
 0.64%  Beating the Dow  
 0.44%  Dow Combo  
 -4.21%  Foolish Four