The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (June 27, 1997)  About ten days ago in this column I outlined my personal investment strategy and a portfolio I set up for a friend at the end of June 1996. Since that portfolio is now coming to its anniversary, several readers expressed interest in having me set up another hypothetical group of fifteen blue chips.

So here's what I'm going to do: Today I'll present the Sheard Blue Chips for the next twelve months. It's a list of 15 stocks, all household names, that I believe will outperform the market over the next year. Unlike the screens here in the Workshop, though, my selections don't come from a mechanical screening process, so I can't explain to anyone exactly how I decide on these fifteen. I look at long-term earnings, brand equity, news reports on the stocks, financial statement info from EDGAR, and some plain old intuition. I can't swear it will work, but the group of 15 stocks I chose last year at this time did very well, roughly 50% compared to the market's 34% gain. (Precise numbers will close out with trading on Monday.) Since last year was so strong and we're watching the portfolio on an ongoing basis now, it's pretty much doomed, but so be it.

So as of the close of trading on Monday, here are the fifteen stocks I'll track for the next year (in alphabetical order):

Abbott Labs (ABT)
American Int'l Group (AIG)
Citicorp (CCI)
Coca-Cola (KO)
DuPont (DD)
Eli Lilly (ELY)
Gillette (G)
Intel (INTC)
Johnson & Johnson (JNJ)
Merck (MRK)
Microsoft (MSFT)
Pfizer (PFE)
Philip Morris (MO)
Procter & Gamble (PG)
Wal-Mart (WMT)

Next week I'll update you on the final numbers for the previous annual portfolio returns and post the "official" beginning values for the new list (whatever Monday's closing prices are).

In addition, in Monday's column I'll stick my neck out and give you Sheard's Thoroughbred stocks. While I don't actually invest in aggressive short-term holdings any longer (can't afford the time or trading costs every month), I still enjoy playing with lists of potentially strong growth stocks. So the Thoroughbred stocks are ones I think have decent fundamental value but that are also showing very good price growth of late. Again, the list I post on Monday isn't taken from a mechanical screen, but from a number of factors including personal intuition (not always the most reliable indicator).

Let me repeat: the stocks on this Thoroughbred list are NOT ones I hold or will buy. This is purely an academic exercise for me. My personal portfolio is managed using my Blue Chip thinking, not the Thoroughbred way. Keep that in mind before you put too much weight behind my comments. Do your own research!

Monthly Growth Screens
(Jan. 3 to present)
32.08%  Relative Strength  
18.61%  S&P 500 Index  
13.25%  Low Price/Sales  
 1.72%  Unemotional Growth  
-1.02%  Investing for Growth  
-6.96%  YPEG Potential  
-10.68%  EPS Plus RS  
-20.55%  Formula 90  

Annual Value Screens
(Jan. 1 to present)
19.22%  Dow Jones Ind Avg  
15.24%  Dogs of the Dow  
12.74%  Beating the S&P  
 9.53%  Unemotional Value  
 9.53%  Beating the Dow  
 6.93%  Dow Combo  
 2.53%  Foolish Four