Monday, May 4, 1998

The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (May 4, 1998) -- The new Unemotional Growth rankings are posted if you missed them this weekend. The only change in the top five for April's model portfolio is that AirTouch Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ATI)") else Response.Write("(NYSE: ATI)") end if %> and Cambridge Technology <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CATP)") else Response.Write("(Nasdaq: CATP)") end if %> swapped in and out of the top group.

If you've read the section in The Unemotional Investor on "A Year in the Life," you'll remember that in that example, I didn't make such minor changes around the fringes (although in the model's full back-testing, I followed the rankings rigidly). When a stock drops to position #6, it may be back in the top five the next month, and being extremely rigid about such "technical" rankings changes isn't crucial. In fact, they may even cost you more in commissions, taxes, and spreads than the change is worth. Use your best judgment on whether to make such a minor change.

Everything else in the Workshop looks very much the same as it's been for the last couple of months. The Relative Strength-based portfolios are doing very well, and the original monthly Unemotional Growth portfolio is soaring, up 31% so far in 1998.

Many readers have noticed that we're tracking the Unemotional Growth model on an annual basis in our Workshop Returns area this year -- don't read this as a sign that I've changed my mind on the holding period for the model. It's still best used on a monthly (or quarterly) cycle in a tax-deferred account, where the short-term gains don't hurt. In the Workshop Returns section in 1998, we just wanted all eight screens compared on the same basis, so we're tracking it there on an annual basis, too.

You'll notice that the more aggressive model is doing significantly better than the 10-stock model, which doesn't change throughout the year. I'm also continuing the historical file for Unemotional Growth returns (featured in my book) on a monthly basis. You can get updated performance numbers in this file for our UG history dating back to 1987.

Fool on!

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

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