The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (Sept. 30, 1997)

Scroll to the bottom for year-to-date Growth and Value Screen results.

It's model portfolio update time. Today's update concerns two model portfolios I've written about in this column in months past, a 15-stock Blue Chip Portfolio and a 15-stock Bits and Bytes Portfolio (large-cap computer and software stocks).

The Blue Chip Portfolio is a group of large-cap household names I chose for a friend last summer (July 1, 1996) as stocks to consider for his own portfolio. My reasoning for these stocks was that they're all market leaders, they all have solid earnings growth and financial strength, and their brand equity is strong.

It's been 15 months now and the portfolio is still outpacing the S&P 500 considerably. During the past 15 months, the S&P 500 is up 42%, a great run. But over the same period, the Blue Chip Portfolio is up 56%. That represents an annualized return of 43%. Not bad for boring stocks you can sock away for a year or two without sweating the market every day. Here's how the individual components have fared:

 156% Intel (INTC)
 124% Microsoft (MSFT)
  97% BankAmerica (BAC)
  71% Pfizer (PFE)
  64% Citicorp (CCI)
  61% American Int'l Group (AIG)
  56% Merck & Co. (MRK)
  47% Home Depot (HD)
  40% Hewlett-Packard (HWP)
  39% Gillette (G)
  26% Coca-Cola (KO)
  22% Philip Morris (MO)
  17% Johnson & Johnson (JNJ)
  14% PepsiCo (PEP)
   2% McDonald's (MCD)

The other portfolio, Bits and Bytes, represents a straightforward screen. I started with the industry sectors from the S&P 500 that were focused on computer technology, including software, semiconductors, and semiconductor equipment makers, and then selected the fifteen stocks with the largest market caps. So far, in 1997, it's been a terrific run for this group, up 78% versus the S&P 500's gain of 28%. Even scarier is the performance by the five stocks that in January sported the best Relative Strength rankings (Compaq, Dell, Microsoft, Intel, and Seagate Technology). Even with Seagate losing money so far in 1997, the group of five is up a whopping 105%.

Here is how the individual components have done for the year to date:

 275% Dell Computer (DELL)
 173% Applied Materials (AMAT)
 154% Compaq Computer (CPQ)
 115% Texas Instruments (TXN)
  88% Sun Microsystems (SUNW)
  77% Lucent Technologies (LU)
  63% Microsoft (MSFT)
  45% Computer Associates (CA)
  44% Intel (INTC)
  40% Int'l Business Machines (IBM)
  38% Hewlett-Packard (HWP)
  34% Oracle (ORCL)
  18% Motorola (MOT)
  16% Cisco Systems (CSCO)
  -8% Seagate Technology (SEG)

Fool on!

Monthly Growth Screens
(Jan. 3 to present)
90.56%  Relative Strength  
41.63%  Investing for Growth  
31.07%  EPS Plus RS  
26.64%  S&P 500 Index  
26.30%  YPEG Potential  
21.22%  Low Price/Sales  
21.20%  Formula 90  
20.56%  Unemotional Growth  

Annual Value Screens
(Jan. 1 to present)
24.51%  Dogs of the Dow  
23.81%  Beating the S&P  
23.60%  Dow Combo  
23.22%  Dow Jones Ind Avg  
22.33%  Unemotional Value  
22.33%  Beating the Dow  
16.56%  Foolish Four