New World-Beating Dozen
(TMF Sheard)
LEXINGTON, KY. (July 24, 1998) -- Yesterday I updated the six Dozens models I've been tracking this year. Today I want to add a seventh such model. We've been following the Relative Strength Dozen based on the 26-week total return method for calculating relative strength. But there was no specific reason for choosing this method over the one using Investor's Business Daily's RS scores. Since our regular models this year are showing a decided advantage for the RS-IBD method so far, I backed up and tested this Dozens version, too. And what a mistake I made in not watching this one sooner. Cha-ching!
On December 31, last year, the first stock picked up for the RS-IBD Dozen would have been Best Buy Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BBY)") else Response.Write("(NYSE: BBY)") end if %>. As of today, that stock's up 169.6%
On January 30, the second stock would have been Dell Computer <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DELL)") else Response.Write("(Nasdaq: DELL)") end if %>. As of today, Dell's up 111.5% since January 30.
On February 27, we would have added Safeskin <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SFSK)") else Response.Write("(Nasdaq: SFSK)") end if %>. As of today, we'd have a 35.4% gain.
On March 31, we would have added Ethan Allen <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ETH)") else Response.Write("(NYSE: ETH)") end if %> as our fourth stock. This one's been a loser since we added it, down 21.5%.
On April 30, the fifth stock would have been Capital One Financial <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: COF)") else Response.Write("(NYSE: COF)") end if %>. We have a 15.8% profit in Capital One.
On May 29, stock number six would have been America Online <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AOL)") else Response.Write("(NYSE: AOL)") end if %>, which is now up 43.2% since being added.
And finally, on June 30, the seventh stock was The Gap <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GPS)") else Response.Write("(NYSE: GPS)") end if %>, which has given up 4.9% this month.
Altogether, the RS-IBD Dozen is on a pace to record an annual gain of 233.9%!!! That blows away all the other Dozens models I've been tracking. And compare it to an identical investment of $1,000 into the Standard & Poor's 500 Index Spyder <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: SPY)") else Response.Write("(AMEX: SPY)") end if %> each month. That benchmark has an annualized return right now of 23.9%.
So for future Dozens updates, I'll continue to track both Relative Strength models. If you're wondering what the Dozens are, please see yesterday's Workshop column for a little background.
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.]