The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (Sept. 12, 1997) -- An interesting result of our watching the Growth screens this year over four holding periods (ranging from monthly updates to an annual holding period) has been the evidence that some of the models seem to fare just as well (if not better) on longer holding periods, which, of course, would save on trading costs, and in some cases, perhaps even taxes.

For example, the Investing for Growth approach, which was originally designed for a quarterly update, has produced better returns so far in 1997 by updating only at mid-year. Obviously one example doesn't mean all that much, but it lends itself to the goal I've had for many months of extending holding periods even with seemingly aggressive strategies.

As a quick acid test, I compiled the results for 1995, 1996, and year-to-date 1997 for all of the stocks that qualify as Investing for Growth stocks, not just the top ten we normally include in the model. That is, I looked at any stock with a Timeliness ranking of 1 that appeared as part of Value Line's High Growth Stock screen on page 39 of their Summary and Index.

I tallied the total return for each stock as if it were held the full year and found that even a simple approach with the whole group did reasonably well. In 1995, the group averaged 39%. In 1996, it averaged 28%. And so far this year, it has averaged 39%. The results weren't entirely consistent, naturally. In most groups of fifteen to twenty stocks, at least one or two will perform markedly worse than average. But the fact that the entire group still held up reasonably well is encouraging. Using a relative strength screen, perhaps, may have weeded out some of those losers, but it's not something I've had time to test.

And speaking of time, for the next two weeks, I'll be taking a sabbatical from the Motley Fool to work on my book manuscript. I believe you'll have a series of guest writers in my daily columns and I hope some of the more veteran readers of the Workshop will step in and help answer any questions on the message board. I won't be wading through e-mail during the two weeks so please direct any questions you do have to the message board folder. You'll probably get a quick reply that way from one of our readers pinch hitting. Fool on!

Here is the new Investing for Growth order for 9/12:

Iomega (IOM)
Western Digital (WDC)
Dell Computer (DELL)
Quantum (QNTM)
Sun Microsystems (SUNW)
Compaq Computer (CPQ)
Helen of Troy (HELE)
Dollar General (DG)
Franklin Resources (BEN)
Price, T. Rowe (TROW)

Monthly Growth Screens
(Jan. 3 to present)
78.88%  Relative Strength  
34.21%  Investing for Growth  
26.28%  YPEG Potential  
23.52%  S&P 500 Index  
22.74%  Low Price/Sales  
22.29%  EPS Plus RS  
16.42%  Unemotional Growth  
13.08%  Formula 90  

Annual Value Screens
(Jan. 1 to present)
23.07%  Dogs of the Dow  
20.08%  Dow Jones Ind Avg  
20.05%  Dow Combo  
19.31%  Unemotional Value  
19.31%  Beating the Dow  
18.78%  Beating the S&P  
14.37%  Foolish Four