The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (May 15, 1997)

One of the dangers of an enterprise such as ours in the Workshop is to run pell-mell with each promising idea before we've thoroughly tested it and examined all the possibilities. I'm guilty of the very thing myself with my feeble attempts to build an easy stop-loss system into the Unemotional Growth approach. As many investors using the screen know, stops are not nearly as easy to manage as we had hoped. "Striving to better, oft we mar what's well." (King Lear, I, iv, 371)

As I frequently like to do then, let me reiterate the purpose of the Workshop and how it can help us explore ideas together. It's best not to see any screen here as the magic bullet that will make us all rich. Even the screen with the longest history (Unemotional Growth) carries with its impressive track record some potential problems (high turnover costs and short-term gains).

The attitude we want to suggest here is to use these screens as first passes to narrow the field of thousands of stocks down to a manageable number that one can research thoroughly. So looking at UG and/or any of the other screens can be a good way to filter out some promising prospects to pursue further.

While I'm a bit rigid with the Dow Approach (given its stability and extremely long and successful history), believing one should use it "by the book," I don't see any problem with extending any number of fundamental tests to the stocks in the various "models" here.

Growth-stock investing, by its very nature, requires more attention than the Dow Approach anyway, so don't let the mechanical nature of my backtests lock you into that mindset with the screens going forward. I suspect there are any number of investors who have used these screens as a starting point and have done even better by filtering out some weak stocks with even more research.

Make these screens your own, Fools, and make use of the best information you can get. We're all in this together; the competition isn't between us, but rather the Fools versus the rest of the Wise. Set to!

Monthly Growth Screens
(Jan. 3 to present)
26.22%  Relative Strength  
12.54%  S&P 500 Index  
6.58%  Low Price/Sales  
4.85%  YPEG Potential  
-0.91%  Investing for Growth  
-9.28%  Unemotional Growth  
-11.76%  EPS Plus RS  
-19.54%  Formula 90  

Annual Value Screens
(Jan. 1 to present)
13.73%  Dow Jones Ind Avg  
13.20%  Dogs of the Dow  
8.82%  Beating the S&P  
4.36%  Unemotional Value  
4.36%  Beating the Dow  
2.80%  Dow Combo  
-3.00%  Foolish Four