The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (July 23, 1997) -- As we enter the last part of July, let's update the three portfolios I've been tracking independently of the Workshop screens: The Blue Chip Portfolio, the Thoroughbred Portfolio, and the Technology Portfolio.

The Blue Chip Portfolio began its second year of data at the beginning of July with a new group of fifteen stocks (see my column of June 27). I chose them, not with a purely mechanical approach like the other Workshop screens, but using some basic fundamental elements such as earnings growth in recent years, financial strength, brand equity and industry leadership. None of the names in this group will be a surprise, but to date the portfolio has beaten the S&P 500 handily.

The list which began this month is trailing the S&P 500 by a point so far, 6% versus 5%, but the annualized gain from July 1, 1996 through today, however, records a decent advantage for the Blue Chip Portfolio over the market, 50% versus 37%.

The Thoroughbred Portfolio is a new creation, begun this month (see my column of June 30). While fundamental analysis is included (earnings growth particularly), I also rely heavily on short-term momentum in choosing the fifteen stocks. I intend to follow a new group monthly. Note well, however, that this portfolio is completely experimental. I'm not using it for my real portfolio, nor would I recommend it to anyone else yet.

So far this month, the Thoroughbred Portfolio has also kept pace with the S&P 500, each gaining 6%. But as you might expect, this group of fifteen stocks is much more volatile than the Blue Chip Portfolio. In the last three weeks, the group is sporting successes like DELL COMPUTER <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DELL)") else Response.Write("(Nasdaq: DELL)") end if %>, up 40%; NAVISTAR <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NAV)") else Response.Write("(NYSE: NAV)") end if %>, up 20%; and UNITRODE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: UTR)") else Response.Write("(NYSE: UTR)") end if %>, up 14%. But it also includes SMITHFIELD FOODS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SFDS)") else Response.Write("(Nasdaq: SFDS)") end if %>, which has dropped 21% since the month began.

The star so far in 1997, of course, has been the Technology Portfolio. These stocks are chosen mechanically, including the fifteen largest technology stocks (by market cap) from a select group of S&P 500 Industry groups (see my column of May 9). Since the start of 1997, the S&P 500 is up 26% while this group has screamed ahead 67%. Even more stunning is the 82% gain recorded by the five stocks on the list that had the strongest Relative Strength scores at the start of the year: COMPAQ COMPUTER <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CPQ)") else Response.Write("(NYSE: CPQ)") end if %>, DELL COMPUTER <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DELL)") else Response.Write("(Nasdaq: DELL)") end if %>, INTEL <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTC)") else Response.Write("(Nasdaq: INTC)") end if %>, MICROSOFT <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MSFT)") else Response.Write("(Nasdaq: MSFT)") end if %>, and SEAGATE TECHNOLOGY <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SEG)") else Response.Write("(NYSE: SEG)") end if %>.

I'll keep you posted on the progress of all three portfolios and I'll have a new list of Thoroughbred stocks before the end of the month. Fool on!

Monthly Growth Screens
(Jan. 3 to present)
51.04%  Relative Strength  
25.20%  S&P 500 Index  
21.44%  Investing for Growth  
16.93%  Unemotional Growth  
15.43%  Low Price/Sales  
12.04%  EPS Plus RS  
 9.50%  YPEG Potential  
-6.02%  Formula 90  

Annual Value Screens
(Jan. 1 to present)
25.43%  Dow Jones Ind Avg  
20.29%  Beating the S&P  
17.86%  Dogs of the Dow  
16.19%  Unemotional Value  
16.19%  Beating the Dow  
14.65%  Dow Combo  
 3.95%  Foolish Four