Screens and Dreams

by Jim Stevens ([email protected])

Burlington, VT. (Sept. 24, 1998) -- Whew! September 23, 1998 goes down as another bullish day that had people who have all their investments in stocks chuckling. I'm writing this Wednesday evening, folks, so you can all have a good laugh at me if the markets plummeted today! For better or worse, I'll be riding it out, fighting the good fight, for years to come.

From all of you with a penchant for mechanical screens and that same happy-go-lucky long-term view, I've been getting the impression we share some common wishes and attitudes about this ol' Workshop. Thanks for the e-mails, by the way, they made me feel like a very cool Fool. As far as any requests for changes in the Workshop format, the more ideas the better. Remember that there is still a bit of a transition going on here, though. At least for a while, it will be the regular content only.

The quest for the perfect screen and the most complete understanding of the current screens goes on in earnest among the community. What I hear from Fools and feel myself is a need for additional backtesting, raw data to test, and more uniform, thorough analysis of the results -- for both new models and old. Here are the questions that burn in our minds: What about before 1987? What about different starting times in the year? Longer or shorter hold times? Maybe a different starting list? How about different or additional screen criteria? More stocks? Less stocks? Skipped stocks? What did each position return? Risk? Statistical significance? Etc., etc., etc.

Why more tests, you say? Was Robert a charlatan? Will we turn up models with 80% returns? Do we enjoy dragging and clicking boxes in never-ending spreadsheets? No to all of the above. The reason we want more number crunching is our quest toward Zenlike unemotionalism.

We are almost sure we've got the Wall Street Wise beaten senseless while barely lifting a finger. Now, we want to stack up more evidence in our favor. As portfolios get larger, the stakes get higher.

By now all of you are likely declaring: "All right already, grab the halyard and hoist the main, ye Fool! Bring on the tests and data!" Well, to be honest, folks, I'm new at this. While I can certainly hold my own manipulating a spreadsheet and the ValueLine data, up until now I've never researched a historical backtest. And these things take time.

Presently, I can't add anything in the way of firm commitments to what will transpire here and when, except to repeat that the Current Rankings and Workshop Returns will be maintained. I don't think things are looking that bad at all, though. There is a flurry of research going on daily in the Foolish Workshop web message board. It took more than two years to create what the Workshop currently offers in the way of backtested data and screen choices. That's what brought us all here, but it didn't get built in a day.

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

What Happened to Robert Sheard?