Friday, April 17, 1998

The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (April 17, 1998) -- The 1998 Workshop now has four stocks topping the 50% profit mark (and a fifth dangerously close). And one of those four has already rung the Double Gong. Through April 15th, Best Buy Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BBY)") else Response.Write("(NYSE: BBY)") end if %> has championed the relative strength models by surging to a gain of 103% year-to-date.

The second tier of All Stars contains the likes of AccuStaff <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ASI)") else Response.Write("(NYSE: ASI)") end if %>, up 63%, Alaska Air Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ALK)") else Response.Write("(NYSE: ALK)") end if %>, up 55%, Dell Computer <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DELL)") else Response.Write("(Nasdaq: DELL)") end if %>, up 62%, and Texas Industries <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TXI)") else Response.Write("(NYSE: TXI)") end if %>, up 47%.

But the Workshop's also the semi-proud home of a fair number of bog dwellers this year. ADC Telecom <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ADCT)") else Response.Write("(Nasdaq: ADCT)") end if %> is into shareholders for 35%, Adaptec <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ADPT)") else Response.Write("(Nasdaq: ADPT)") end if %> has kissed 44% goodbye, and Iomega <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IOM)") else Response.Write("(NYSE: IOM)") end if %> wiped out 41% of its owners' stakes so far in 1998.

The overall encouraging news from the Workshop, however, is that all but one of the eight screens are doing better than the Standard & Poor's 500, which is on an impressive rate of return for the year so far in its own right. The one loser? How about this for bad stock picking? The Classic Investing for Growth (IFG) approach has not one, not two, but all three Bog Dwellers in its ten-stock holdings for 1998. And hard as it may be to fathom, it's still in the black overall, although barely.

As many of you know, I've long since been convinced that the original IFG model would be improved by eliminating the final Industry Ranking screen and replacing it with a relative strength screen. This allows one to lengthen the holding period (and reduce trading costs and taxes) and select a more powerful subset of the IFG stocks. So far in 1998, it's the difference between an 18% return and a 2% gain. In recent years, it's also outperformed the classic IFG approach.

If you're interested in the returns for the 5-stock versions of our Workshop screens, the Relative Strength screen based on the previous 26-week total returns is in the lead by far, up more than 44% for the first 105 days.

All in all, it's a very good start for the Workshop in 1998. Anytime you can claim a batting average of .875, you're doing nicely. And considering the S&P 500's not exactly pitching meatballs (with a 16% return as the standard to beat), the Workshop screen performance is even more exciting. But we're really only in the third inning (to play this metaphor for all it's worth), so it's not time to pop any champagne corks yet. Have a Foolish weekend.

Check out the latest file updates for the Workshop:
New Rankings | 1998 Returns | New Database

[Robert Sheard is the author of The Unemotional Investor (Simon & Schuster, 1998) available now at Amazon.com and soon at your local bookseller.]