Dozens Update

by David Forrest ([email protected])

West Roxbury, MA. (Oct. 30, 1998) -- What a relief. I anxiously opened the Value Line file this morning praying that it would contain the right data. Ba-boom! It was right on the money. All of the pages should be updated shortly. You'll notice in our Rankings page that nine companies were deleted and nine added to the database. This represents two weeks of changes. Thanks to everyone for their support of our decision to not post bad data last week.

Now, it's time to update our Dozens portfolios. For those of you who read our last update of the Dozens portfolios, we decided not to keep following the Dow Dozens and Dow Racers. We also decided to add the Spark5 (explained here) as a Dozens portfolio. So, let's see which 5 stocks will be added to the Dozens ports this month:

Keystone -- Philip Morris <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MO)") else Response.Write("(NYSE: MO)") end if %> -- 20 shares @ $51.25
RS-26 Week -- EMC Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: EMC)") else Response.Write("(NYSE: EMC)") end if %> -- 15 shares @ $64.75
Formula 90 -- EMC Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: EMC)") else Response.Write("(NYSE: EMC)") end if %> -- 15 shares @ $64.75
Low PSR -- Quicksilver <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ZQK)") else Response.Write("(NYSE: ZQK)") end if %> -- 48 shares @ $20.69
Spark5 -- Warner-Lambert <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WLA)") else Response.Write("(NYSE: WLA)") end if %> -- 13 shares @ $78.38

The whole point of the Dozens approach is to let you buy a new stock each month with a smaller amount of money and ease yourself into the approach. So far this year, the Dozens portfolios have performed as follows:

Model Return S&P Return
Keystone 25.15% 3.06%
RS - 26 Week 14.72% 3.10%
Formula 90 4.85% 3.00%
Low PSR -12.31% 4.83%
Spark 5 -1.80% 4.73% *

* This is after just one month; all the rest are from the beginning of the year.

Finally, on this beautiful autumn Friday afternoon, let me bring you up to date on my own pet screen. Those of you who follow the Workshop reports daily know that I suggested picking a portfolio based on timeliness ranking and beta. Check out the original column for an in-depth explanation. In short form, "beta" is a measure of volatility. Stocks with high betas are supposed to do better than the market in good times and worse than the market in bad times. The volatility works in both directions.

Well, just for fun, on September 9, I took all of the Timeliness 1 stocks and sorted by beta. I chose the 10 stocks with the highest betas and put them in a mock portfolio. Almost immediately after I started this, the market got clobbered, sending my high-beta portfolio way down. At one point, the portfolio was off 15% in a month.

However, with the market rockin' back, the Beta Portfolio is up 11.52% versus the Standard & Poor's 500, which is up 7.35% in the same time period. For anyone who'd like to know what the 10 stocks were, I have put a list of them on the web message board. Take a look at the web boards and follow along with me in this new experiment.

Take care,
Bogey

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