Monday, February 23, 1998

The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (February 23, 1998) -- Value Line has apparently reloaded its data from Friday to clean up the problems in the statistics, but I've been unable to access a complete download yet. (I get bounced part-way through each time.) As soon as I'm able to get a full and accurate data update, I'll fill in the gaps in our Current Database, YTD Workshop screens and the Current Rankings.

In the meantime, let's update the Keystone Dozen holdings.

For those of you new to the Keystone Dozen, this is a plan where the investor chooses the highest-ranked Keystone stock each month that's not already in the portfolio. By the end of the first year, the portfolio holds a full slate of 12 stocks, each chosen on a different date. From then on, it's a matter of replacing one stock each month as it becomes a year and a day old.

With this plan you always own a dozen Keystone stocks, chosen from the very top slots in the rankings at the time of acquisition. All holdings are still eligible for the medium-term capital gains treatment (maximum of 28% tax rate). And commissions are limited to 24 per year (from $192 to $240 a year on the low end of the deep-discount scale.

For the first year, one possibility for parking your cash in reserve is to put it into the S&P 500 Index Spyder <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: SPY)") else Response.Write("(AMEX: SPY)") end if %>. That way the cash you're holding for future months the first year will at least keep pace with the major market index.

In our hypothetical model, we began with $12,000 on 12/31/97. Our first purchase was Fifth Third Bancorp <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: FITB)") else Response.Write("(Nasdaq: FITB)") end if %> and a month later we added Schering-Plough <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SGP)") else Response.Write("(NYSE: SGP)") end if %>. The bulk of the money remains in the Spyder.

Shortly before today's market close, here's how the early Keystone Dozen Portfolio is faring:

Shares  Stock   Price      Value 
  12      FITB   79.44     953.25 
  14       SGP   76.75   1,074.50 
 103       SPY  104.00  10,712.00 
                  Cash      10.00 
  
                 Total  12,749.75 
                  Gain       6.25% 
 

The third stock will be added based on the current rankings and closing values on Friday, February 27. 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.]