The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (July 25, 1997) -- All of the growth screens in the Workshop are built upon the premise that the Value Line Investment Survey Timeliness ranking system is a fine quality screen on which to build. In the most recent edition of Value Line, they've updated the results of their ranking system through the end of June 1997.

And was the first half of 1997 ugly! The top-ranked stocks, Value Line's best 100, only managed to grow by 13%. (That's for the frozen record, which does not allow for changes in the rankings throughout the year.) The unfrozen record, which accounts for the weekly changes in the rankings, did even worse, a paltry 6% gain for the top group. (That might have something to do with the under-performance of several growth screens to date.)

But lest we get caught up in the short-term performance and miss the importance of history, let's recap Value Line's total record, which now extends for more than 32 years. The frozen record from April 16, 1965 to June 30, 1997 has posted a cumulative gain of 11,939%. Annualized, that represents a return of 16.03%, several points a year better than the S&P 500 and Dow Jones Industrials.

The unfrozen record has fared considerably better, posting a cumulative gain of 46,451%. That equates to an annual rate of 21.00%. In dollar terms, a $10,000 investment in 1965 would now be worth $4,655,100 (excluding trading costs and taxes, of course).

Naturally, individuals aren't going to buy all 100 stocks and make four to ten trades each week as the rankings change, but the fact remains that the Timeliness ranking has proven a phenomenal real-time (not back-tested) approach, and if we choose well from within the framework of those rankings, we should improve on the long-term record by skimming the best off the top of that group of 100 stocks. It's nice to have history on our side.

For those of you following along with the original Investing for Growth model, the top ten just became more heavily weighted in technology stocks with the addition today of SUN MICROSYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SUNW)") else Response.Write("(Nasdaq: SUNW)") end if %>.

New IFG Order:
Helen of Troy (HELE)
Western Digital (WDC)
Dell Computer (DELL)
Quantum (QNTM)
Sun Microsystems (SUNW)
Compaq Computer (CPQ)
Price, T. Rowe (TROW)
Franklin Resources (BEN)
Robert Half Int'l (RHI)
CDI Corp. (CDI)

Monthly Growth Screens
(Jan. 3 to present)
50.61%  Relative Strength  
25.50%  S&P 500 Index  
22.24%  Investing for Growth  
14.45%  Low Price/Sales  
13.81%  Unemotional Growth  
12.15%  EPS Plus RS  
10.00%  YPEG Potential  
-5.43%  Formula 90  

Annual Value Screens
(Jan. 1 to present)
25.82%  Dow Jones Ind Avg  
20.34%  Dogs of the Dow  
19.10%  Beating the S&P  
13.80%  Unemotional Value  
13.80%  Beating the Dow  
13.50%  Dow Combo  
 2.85%  Foolish Four