Investing For Growth
Investing For Growth
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FOOL GLOBAL WIRE
LEXINGTON, Kentucky (December 26) -- The new year is approaching quickly, and that means planning time for some of the areas here on the Fool. Specifically for me, it means how I plan to monitor the Foolish Workshop in 1997. Here's what I propose, and I'd appreciate your feedback in the Investing for Growth message folder if you're an AOL reader, or via e-mail if you're a web reader. I won't promise to answer all your e-mails or messages concerning this particular topic, but I'll definitely read and consider them. I plan to track both Value and Growth screens in the Workshop for 1997. The Value screens are relatively easy. We'll track the Dow approaches (a straight high yield screen, a Beating the Dow screen, an Unemotional Value screen, a Combo screen, a Beating the S&P screen, and perhaps one or two more). I'll track simple 5- and 10-stock versions for the entire year, including dividends, but no trading costs. (I need to keep the tracking process as simple as possible.) The starting point will use the rankings on January 1, and the year extends through the end of 1997. The Growth screens will be a little more elaborate because I'll be tracking four different holding periods: monthly, quarterly, semi-annually, and annually. Again, for simplicity's sake, I'll track simple 5- and 10-stock versions, and in this case, I'll exclude dividends and trading costs. The update cycle will use the first Friday of each period since we're linked to Value Line's publication dates for the field of top stocks we use in these screens. The screens I plan to include are highest EPS rankings, highest RS rankings, highest sum of EPS and RS rankings, highest potential between current and YPEG target prices, and lowest Price/Sales ratios. I'll have to decide on a tie-breaking order so we can limit our models to the exact number of stocks. It's likely that a combination of such screens will prove the best way to hunt for stocks, but to keep single factors isolated in these tests, I plan to begin with these screens. In future years, we can reconsider which ones we choose to follow and what combinations we plan to add. The entire database I've been posting in the temporary Foolish Workshop file will be posted for now only once per month (the first Friday), but I'll update the performance files for all of these screens weekly. Also, I'll be creating an archive of the monthly database so anyone interested in testing other options in the future will have access to the data. Approaches like Investing for Growth and Unemotional Growth, since they are actually combinations of such screens, won't be tracked in the Workshop itself, but I'll continue to track them separately on a weekly basis as I have in the past. Let me know what you think, but please, no suggestions to include screens based on various combinations. For example, "what about stocks with EPS over 95, RS over 90, and PSR under 1.5?" This may well be a powerful combination, but such combinations are nearly infinite and I can't include them all. So what I'm going to provide is the raw screens with which readers can create their own powerful combinations. Then the plan is that we'll all discuss, analyze, and share our successes and failures in the message folder as a way of refining what we track in future years. (And with any luck, we'll have such folders on the Web site in the "near" future, too.) Fool on! (Don't forget, entries for January's Thoroughbred Stock Challenge are due by the opening bell on January 2. Don't miss out.)
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