The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (Nov. 17, 1997)

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

How about an offer you can't refuse? Ever heard a come-on like that which didn't come wrapped up in a huge catch? Well, I'm going to make you such an offer today and the catch is a small one, I think you'll agree.

A friend of mine has graciously supplied me with quarterly historical Value Line data extending back to 1987. What this means is that a researcher's dream has come true. Within the limitations of the database format, I can screen this nearly eleven years worth of historical material easily for any strategy we'd like to test.

Here's where you come in. I'm going to post a list of the variables I'll be able to screen for in tomorrow's Workshop column and what you must do is put together your theories about what factors will make the best combinations, and then together, we'll test them. True, it's not 30 or 40 years of data, but eleven isn't too bad.

Here's how the process will work. When you have a model you want tested (and with time constraints being what they are, I'll probably only be able to run one of these screens occasionally), post it in the message folder and let's have a discussion of its relative potential merits. I'll choose a model every chance I get from these discussions and run the screens and generate the list of stocks.

Calculating the historical returns will require some help from you, however. If a stock still trades today and the model is based on an annual holding period from January 1 to January 1, I can look up the annual total return easily for each year back to 1987 (this will probably shift to 1988 soon) in the current Value Line database. For stocks no longer trading or for periods other than annual gains on a January to January cycle, the returns will have to be generated by you. I think one of the best resources for this is actually a print one, the S&P Daily Stock Price Record, since it includes splits, dividends, and most spin-offs.

Then we'll start keeping a log of the various screens we've tested, even the big losers. (You probably learn more from failures than from easy successes.)

So there you have it, an offer to make this Workshop even more interactive. And as we discover the best screens, we'll continue to track them in real time informally. Each year we will probably be able to revise the Workshop screens we track formally to include the best models we've uncovered. Sound like a deal? Look for the list of screening variables in tomorrow's column and let's put our heads together. Fool on!

Year-to-Date Returns
Monthly Growth Screens
77.31%  Relative Strength  
29.89%  Investing for Growth  
26.49%  S&P 500 Index  
23.99%  EPS Plus RS  
14.13%  Formula 90  
10.67%  Unemotional Growth  
  8.20%  Low Price/Sales  
  7.85%  YPEG Potential  

Year-to-Date Returns
Annual Value Screens
26.45%  Beating the S&P  
23.08%  Dogs of the Dow  
20.62%  Dow Combo  
20.13%  Foolish Four  
20.01%  Unemotional Value  
20.01%  Beating the Dow  
19.38%  Dow Jones Ind Avg  

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