Thursday, January 22, 1998

The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (Jan. 22, 1998) -- Chalk one up for the Dope-Slap Department! I recently wrote about the reconfiguration we made to the Keystone model to stabilize the rankings at 30 stocks each week. And after back-testing this revised version, I posted the historical returns for the approach.

Well, I goofed in 1990, big time. Fortunately, I had someone double-check my test results and he found the error in 1990. I had used the right returns, but the wrong list of stocks. Doh!

The good news is that he caught the error and the actual returns for 1990 were better than the results I came up with (always helps to look at the right list of stocks, I guess). For the 12-year history, though, the returns are very little changed from what I've reported in the past.

Today, then, let me post the table again, including different sized-portfolios, from 5 stocks to 30 stocks, and the S&P 500 Index.

Year Top5  Top10  Top15  Top20  Top25  Top30  S&P 500 
 1986 22.0   23.8   29.9   28.5   24.6   23.4     18.5 
 1987  8.1   11.3   10.0    6.7    6.2    5.5      5.2 
 1988  8.5    6.9   11.7   12.2   10.0   10.7     16.8 
 1989 59.2   52.6   47.4   47.7   47.0   41.4     31.5 
 1990 (0.3)  (1.0)   2.3    3.4    1.7    0.6     (3.2) 
 1991 71.8   60.0   51.4   52.5   50.9   46.1     30.6 
 1992 12.4    3.3    2.8    1.4    0.1   (1.2)     7.8 
 1993 36.3   15.1    8.0    5.9    4.4    2.8     10.1 
 1994  9.0   11.3    9.7    9.6    7.9    7.4      1.6 
 1995 43.8   45.5   44.1   43.2   41.0   39.9     37.5 
 1996 38.2   34.2   30.9   30.4   29.9   36.6     23.3 
 1997 56.6   55.6   49.4   44.4   39.3   41.6     33.2 
 1998  0.1    1.4    0.4   (0.0)  (0.0)  (0.0)    (1.3) 
 CAGR 28.4%  24.9%  23.4%  22.4%  20.5%  19.8%    16.8% 
 

I'll be building a file next week to record the individual lists of stocks for each year. Stay tuned also tomorrow for the new weekly updates to the Current Rankings, the Current Database, and the Workshop Returns for 1998.

If by chance you're still pulling up the Workshop data files from 1997, please go to the main screen for the Workshop (on either AOL or the web site) and you'll find all of the links to our 1998 files. The three main Workshop files are updated each Friday this year. Fool on!

[Want to be the first Fool on your block to get a copy of Robert Sheard's forthcoming book? Click here to pre-order your copy of The Unemotional Investor.]