The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (July 22, 1997) -- Recipe for a sell-off? MCAFEE ASSOCIATES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MCAF)") else Response.Write("(Nasdaq: MCAF)") end if %> posted quarterly earnings today of 44 cents a share, 3 cents a share better than Wall Street expected. Yet the stock dropped 10% today. What's the deal?

The deal is litigation. Symantic Corp. is suing McAfee for alleged copyright infringement and seeking a preliminary injunction against the software company. On Monday, Symantic added McAfee's core application, VirusScan, to the list of products it claims McAfee infringes.

McAfee is filing a countersuit for defamation of character and interference of business. McAfee's CEO Bill Larson labeled the copyright infringement suit as frivolous. Nevertheless, investors were spooked today and poured through the exits. McAfee is in the current Unemotional Growth portfolio -- ouch!

Looking to the bigger picture, several readers have asked how a portfolio consisting of both Unemotional Growth and Unemotional Value would have fared over the last decade. Such a combined portfolio, of course, requires a fairly substantial investment to keep costs under control (you might consider a flat-fee account to manage costs), a minimum of $32,000. And the UG approach also generates short-term profits, so the best use of this approach might be within a large IRA.

That said, here is how a portfolio with 50% of assets in UG and 50% of assets in UV4+ would have performed since 1987:

1987 22.37%
1988 10.58%
1989 51.63%
1990 -10.98%
1991 120.13%
1992 36.47%
1993 29.88%
1994 2.75%
1995 37.70%
1996 55.24%

The annualized rate of growth equals 31.66% for the decade. In other words, a $50,000 portfolio at the beginning of 1987 would have grown to more than $780,000 by the end of 1996 (excluding trading costs and taxes, of course). Just one possibility if you're interested in melding value and growth strategies. Fool on!

Monthly Growth Screens
(Jan. 3 to present)
48.40%  Relative Strength  
24.86%  S&P 500 Index  
17.43%  Investing for Growth  
16.69%  Unemotional Growth  
14.59%  Low Price/Sales  
10.37%  EPS Plus RS  
 5.95%  YPEG Potential  
-6.75%  Formula 90  

Annual Value Screens
(Jan. 1 to present)
25.02%  Dow Jones Ind Avg  
21.18%  Beating the S&P  
18.96%  Dogs of the Dow  
16.32%  Unemotional Value  
16.32%  Beating the Dow  
14.37%  Dow Combo  
 4.44%  Foolish Four