Monday, February 09, 1998

The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (February 9, 1998) -- Last week, I announced the Keystone-a-Month portfolio, which is a plan whereby one picks up the highest-ranked Keystone stock each month and holds it for a year. As each stock grows to be a year old in the portfolio, it's replaced by the current highest-ranked stock not already held in the portfolio.

With such an ugly name for the approach, I'm changing it to a reader's suggestion -- The Keystone Dozen! Since it's only February, the portfolio only holds two stocks (with the balance of the original mythical $12,000 parked in the S&P 500 Index Spyder <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: SPY)") else Response.Write("(AMEX: SPY)") end if %>.

Through Friday, February, 6, here's how the Keystone Dozen Portfolio is holding up. On the last day of February, we'll add the third Keystone stock to the group.

Shares  Stock    Price       Value  
  12      FITB   $79.13     $949.50 
  14       SGP   $73.31   $1,026.38 
 103       SPY  $101.63  $10,467.38 
          Cash                $10.00 
                
         Total            $12,453.25 
        Return                  3.8% 
 

There's been some confusion surrounding the regular Keystone Approach historical returns. So let me post again the table of returns for the 5-, 10-, and 15-stock versions from 1986 through last week (February 4).

Year    Top 5    Top 10      Top 15 
 1986     22.0      23.8       29.9 
 1987      8.1      11.3       10.0 
 1988      8.5       6.9       11.7 
 1989     59.2      52.6       47.4 
 1990     (0.3)     (1.0)       2.3 
 1991     71.8      60.0       51.4 
 1992     12.4       3.3        2.8 
 1993     36.3      15.1        8.0 
 1994      9.0      11.3        9.7 
 1995     43.8      45.5       44.1 
 1996     38.2      34.2       30.9 
 1997     56.6      55.6       49.4 
 1998      3.1       8.4        7.5 
 

Compared to the S&P 500 Index and the Beating the Dow 5- and 10-stock portfolios, here's a table listing the annualized returns from 1/1/86 through 2/4/98:

28.6%  Keystone 5 
 25.4%  Keystone 10 
 23.9%  Keystone 15 
 22.9%  Keystone 20 
 21.0%  Keystone 25 
 20.5%  Keystone 30 
 18.9%  Beating the Dow 5 
 18.8%  Beating the Dow 10 
 17.2%  S&P 500 Index 
 

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.]