The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (June 06, 1997)

Today closes our May accounting period for the Workshop, so let me take today to deal with some administrative issues.

Our monthly screens are changed at the close of trading on the first Friday of each month (to coincide with the weekly publication schedule for the Value Line Investment Survey). The assumption with all our models is that at each update, the model starts the new period evenly weighted across all positions.

There are two reasons for this, one practical, one theoretical. For practical reasons, this is easy to track. All we have to do is track the price appreciation of the stocks and take the mean gain/loss for all of the stocks in the model. That eliminates our having to track cash positions and share amounts (too much trouble for a theoretical model with this many variations).

But more relevant perhaps is the idea that periodic rebalancing spreads the risk evenly across all of your stocks. If you have a superstar performer and it gets to be too large a proportion of your portfolio, when it declines (and it undoubtedly will eventually), too much of your total value is at risk in the one stock. Rebalancing once in a while is a simple insurance policy against a single-stock meltdown. In real life, it doesn't have to be done every month as we do it here in the hypothetical models, but once a quarter or once every six months should keep your portfolio in good shape.

Two changes to our database this week (full details will be posted in the Workshop by midnight Saturday). INTEL <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTC)") else Response.Write("(Nasdaq: INTC)") end if %> and QUALITY FOOD CENTERS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: XQ)") else Response.Write("(NYSE: XQ)") end if %> drop out of the field, to be replaced by ONEIDA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: OCQ)") else Response.Write("(NYSE: OCQ)") end if %> and TIMKEN <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TKR)") else Response.Write("(NYSE: TKR)") end if %>.

Monthly Growth Screens
(Jan. 3 to present)
31.46%  Relative Strength  
14.70%  S&P 500 Index  
13.89%  Low Price/Sales  
-2.46%  Investing for Growth  
-3.32%  YPEG Potential  
-4.48%  Unemotional Growth  
-12.11%  EPS Plus RS  
-21.00%  Formula 90  

Annual Value Screens
(Jan. 1 to present)
16.15%  Dogs of the Dow  
15.31%  Dow Jones Ind Avg  
9.37%  Beating the S&P  
7.91%  Dow Combo  
7.44%  Unemotional Value  
7.44%  Beating the Dow  
0.21%  Foolish Four