The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (Oct. 20, 1997)

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

I'm fearful that we'll have to open a Betty Ford clinic for numbers junkies. When we first launched the Workshop, my goal was to provide a place where a number of us, staff and readers alike, could come together and hash out our own theories about screening techniques and stock-selection strategies in some kind of a community effort at making us all better investors.

And to a degree, we've had some good successes. For example, a number of readers carried out an extensive test on sell-stop strategies, only to find that no one discipline really appeared to improve total long-term returns. We've had a number of other readers share their own research results into various screening techniques (e.g., Cormend's Beating the S&P approach). And we've had a very active message board folder where daily conversation continues.

But a huge side-effect has been a growing feeling that a lot of readers have just become dependent on the monthly database rankings, investing in a list of stocks based on techniques they only vaguely understand. And frankly, that represents a failure for the area. Our real goal is to make readers independent investors, not dependent ones.

Here's a quick test to see if you're "fully empowered," in today's vague parlance, or simply a Fool database junkie on your way to some nasty withdrawal symptoms: if the Motley Fool were to shut down tonight, could you continue to invest indefinitely using the strategies you're now using or would you be lost without our database updates? If the former, congratulations. If the latter, it's time to put in some hours and make sure you understand exactly what it is you're putting your money into and why.

Anyone with access to a decent public library (for Value Line), a newsstand (for Investor's Business Daily), and a computer (for the rest of the data, and this is a given if you're reading this), you can re-create any part of our database relatively quickly and cheaply. (You can get earnings estimates and Price/Sales ratios in the AOL research center and undoubtedly from a variety of Web sources, or you can substitute Value Line's numbers in a pinch.)

For most investors, the bulk of the database isn't relevant to your portfolio anyway. For example, an investor using Unemotional Growth or High Relative Strength models can get page 27 from Value Line at the library, pick up a current IBD for a buck, and generate the rankings in thirty or forty-five minutes. You don't need the rest of our database, and you'll probably start performing better research if you don't rely on the numbers we do provide.

As we come to the close of 1997, the Workshop will be undergoing some big revisions. Some of our experiments have worked, some haven't, and I haven't yet heard what the new Workshop will look like, so as a word to the Foolishly Prepared, make sure you're capable of generating the rankings you personally use on your own in case the new Workshop no longer provides something you rely on rather than checking for yourself. If you can't, perhaps it's time to examine your strategies and preparation and work towards independence.

The teacher still alive in me balks at the idea of providing information for readers who are depending too much on the Workshop area for their rankings and haven't yet understood the screens they're using. Just as with the Dow Approach, you'll be a better investor if you understand the principles and practices you use from the Workshop screens in all their complexities.

Monthly Growth Screens
(Jan. 3 to present)
87.94%  Relative Strength  
37.86%  Investing for Growth  
32.00%  EPS Plus RS  
27.75%  S&P 500 Index  
24.83%  YPEG Potential  
23.94%  Unemotional Growth  
20.78%  Formula 90  
18.81%  Low Price/Sales  

Annual Value Screens
(Jan. 1 to present)
29.14%  Dow Combo  
27.13%  Unemotional Value  
27.13%  Beating the Dow  
26.66%  Dogs of the Dow  
23.95%  Beating the S&P  
22.85%  Dow Jones Ind Avg  
22.18%  Foolish Four