Thursday, April 30, 1998
The Daily Workshop Report
by Robert Sheard (TMF Sheard)
LEXINGTON, KY. (April 30, 1998) -- At today's closing bell, the Dozens Portfolios will pick up their fifth stocks of the year. If you're not familiar with the Dozens Approach, it's a portfolio management technique where one buys a single new stock every month, staggering a dozen positions across an entire year. As each stock grows to be a year old, it's reevaluated and replaced, if necessary, with the highest ranking stock not already in the portfolio.
One can use any number of combinations of strategies to allocate the dozen positions, but we're following six different models, each one devoted to a single screening technique.
Through late this afternoon (excluding dividends), here are the returns for the six models. Keep in mind that the returns only include four of twelve eventual stocks and only include one-third of a year's history. The annualized numbers swing wildly on such a short history and such concentrated portfolios.
Strategy Annualized YTD Equivalent
S&P 500 Index 52.3% 14.8%
Relative Strength 140.1% 33.4%
Formula90 114.6% 28.5%
Keystone 49.6% 14.2%
Unemotional Value 48.9% 14.0%
Low Price/Sales 38.7% 11.4%
Dow Racers 6.2% 2.0%
(high rel. strength)
The stocks we'll be adding to these models at today's close are from the Workshop rankings from last Friday. Since the stock must be added using today's closing values, we won't have tomorrow's new rankings available, so we go with whatever's current at the time.
The Relative Strength Dozen will be adding Capital One Financial <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: COF)") else Response.Write("(NYSE: COF)") end if %>. It already holds Best Buy <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BBY)") else Response.Write("(NYSE: BBY)") end if %>, Ethan Allen <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ETH)") else Response.Write("(NYSE: ETH)") end if %>, Alaska Air Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ALK)") else Response.Write("(NYSE: ALK)") end if %>, and Whole Food Markets <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: WFMI)") else Response.Write("(Nasdaq: WFMI)") end if %>.
The Formula90 portfolio will also be adding Capital One Financial. It currently holds Safeskin <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SFSK)") else Response.Write("(Nasdaq: SFSK)") end if %>, Dell Computer <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DELL)") else Response.Write("(Nasdaq: DELL)") end if %>, United Stationer <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: USTR)") else Response.Write("(Nasdaq: USTR)") end if %>, and Ethan Allen.
The Keystone Dozen will be adding America Online <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AOL)") else Response.Write("(NYSE: AOL)") end if %> to its current holdings: Fifth Third Bancorp <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: FITB)") else Response.Write("(Nasdaq: FITB)") end if %>, Schering-Plough <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SGP)") else Response.Write("(NYSE: SGP)") end if %>, Pfizer <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PFE)") else Response.Write("(NYSE: PFE)") end if %>, and Telecommunications, Inc. 'A' <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TCOMA)") else Response.Write("(Nasdaq: TCOMA)") end if %>.
The Low Price/Sales Dozen will be adding Pillowtex <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PTX)") else Response.Write("(NYSE: PTX)") end if %>. The other four stocks include VWR Scientific <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: VWRX)") else Response.Write("(Nasdaq: VWRX)") end if %>, Alaska Air Group, Whole Food Markets, and Lowe's Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LOW)") else Response.Write("(NYSE: LOW)") end if %>.
The Dow Dozen (using the Unemotional Value approach) will probably include General Motors <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GM)") else Response.Write("(NYSE: GM)") end if %> in its holdings. This is to be determined by the final Dow rankings today, but barring a significant rankings change from yesterday's numbers, GM looks likely. The other four stocks are Union Carbide <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: UK)") else Response.Write("(NYSE: UK)") end if %>, International Paper <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IP)") else Response.Write("(NYSE: IP)") end if %>, AT&T <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: T)") else Response.Write("(NYSE: T)") end if %>, and Eastman Kodak <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: EK)") else Response.Write("(NYSE: EK)") end if %>.
And finally, the Dow Racers (which have done anything but so far), will be adding Sears Roebuck <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: S)") else Response.Write("(NYSE: S)") end if %> to the fold. This approach includes the highest-ranking Dow stock based on 6-month relative strength. The first four stocks are AT&T, Disney <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DIS)") else Response.Write("(NYSE: DIS)") end if %>, Merck <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MRK)") else Response.Write("(NYSE: MRK)") end if %>, and Wal-Mart <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WMT)") else Response.Write("(NYSE: WMT)") end if %>.
Stay tuned as we build these models in the coming months. Once they have a full stable of twelve ponies each, the racing form will make more sense. (Can you tell it's Kentucky Derby week?) Fool on!
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.]