The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (Aug. 18, 1997)

Last week's correction did a little bit of a number on the Sheard Blue Chip portfolio, but overall, the group of 15 holdings is still doing fine, even though it holds those two hideously over-valued stocks all the gooroos keep poking at, COCA-COLA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KO)") else Response.Write("(NYSE: KO)") end if %> and GILLETTE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: G)") else Response.Write("(NYSE: G)") end if %>.

This is the goup of 15 large-cap stocks I began tracking on July 1, 1996. Some 13.5 months old now, the overall portfolio is up 49% versus a 36% gain for the S&P 500 (both numbers exclude dividends). That represents an annualized rate of 43%.

 157%  Intel  (INTC)
 123%  Microsoft  (MSFT)
  81%  BankAmerica  (BAC)
  63%  Citicorp  (CCI)
  50%  Amer. Int'l. Group  (AIG)
  46%  Pfizer  (PFE)
  44%  Merck & Co.  (MRK)
  36%  Home Depot  (HD)
  33%  Gillette  (G)
  31%  Philip Morris  (MO)
  27%  Hewlett-Packard  (HWP)
  23%  Coca-Cola  (KO)
  17%  Johnson & Johnson  (JNJ)
   7%  McDonald's  (MCD)
   1%  PepsiCo  (PEP)

Towards the end of August, I will post a new list of 15 such blue chips if anyone wants to follow them. My general approach to these stocks is simple. I look for large-cap stocks with good long-term earnings growth, top financial strength, excellent brand equity, market leadership, and the final criterion is simply a little bit of intuition. With the new tax laws, anything we can do to hold stocks longer is Foolish. The difference between 28% and 20% capital gains taxes over many years can be huge; let's take advantage, Fools!

Monthly Growth Screens
(Jan. 3 to present)
62.69%  Relative Strength  
28.74%  Investing for Growth  
21.99%  S&P 500 Index  
19.44%  YPEG Potential  
15.92%  EPS Plus RS  
15.06%  Low Price/Sales  
11.37%  Unemotional Growth  
  3.10%  Formula 90  

Annual Value Screens
(Jan. 1 to present)
21.01%  Dow Jones Ind Avg  
20.20%  Dogs of the Dow  
16.21%  Dow Combo  
16.00%  Beating the S&P  
15.53%  Unemotional Value  
15.53%  Beating the Dow  
  8.27%  Foolish Four