<FOOLISH WORKSHOP>

Keystone: All Thirty      

by Jim Stevens ([email protected])

Burlington, VT (July 15, 1999) --The Keystone model portfolio is the only Workshop growth screen -- I think -- with a backtest that includes the historical performance of a whopping 30 stocks. As with any statistical sampling, the larger the sample, the less the results can be skewed by a handful of really bad or really good stocks. Since Robert Sheard first created the Keystone screen, we occasionally update the complete 30-stock history -- today's the day.

For an explanation of the Keystone model, including the reasoning behind the screen as well as the mechanics of Keystone stock selection, check out Moe Chernick's report Keystone, the Big Stock Growth Screen. Now let's look at how all 30 Keystone stocks have done this year (returns are for 12/31/99 through 7/14/99 and don't include dividends):

America Online <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AOL)") else Response.Write("(NYSE: AOL)") end if %>        58.58%
EMC Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: EMC)") else Response.Write("(NYSE: EMC)") end if %>             49.71%
Oracle Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ORCL)") else Response.Write("(Nasdaq: ORCL)") end if %>       32.39%
Int'l Business Mach. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IBM)") else Response.Write("(NYSE: IBM)") end if %>  48.88%
Intel Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTC)") else Response.Write("(Nasdaq: INTC)") end if %>        14.65%
Dell Computer <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DELL)") else Response.Write("(Nasdaq: DELL)") end if %>      17.28%
Cisco Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CSCO)") else Response.Write("(Nasdaq: CSCO)") end if %>      40.73%
Home Depot <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HD)") else Response.Write("(NYSE: HD)") end if %>              7.87%
BellSouth Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BLS)") else Response.Write("(NYSE: BLS)") end if %>      -11.03%
Time Warner <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TWX)") else Response.Write("(NYSE: TWX)") end if %>           24.57%
Philip Morris <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MO)") else Response.Write("(NYSE: MO)") end if %>         -27.10%
Freddie Mac <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FRE)") else Response.Write("(NYSE: FRE)") end if %>          -10.96%
Lilly (Eli) <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LLY)") else Response.Write("(NYSE: LLY)") end if %>          -16.81%
Wal-Mart Stores <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WMT)") else Response.Write("(NYSE: WMT)") end if %>       16.96%
Lucent Technologies <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LU)") else Response.Write("(NYSE: LU)") end if %>    36.44%
Microsoft Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MSFT)") else Response.Write("(Nasdaq: MSFT)") end if %>    36.91%
Fannie Mae <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FNM)") else Response.Write("(NYSE: FNM)") end if %>            -7.26%
Schering-Plough <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SGP)") else Response.Write("(NYSE: SGP)") end if %>       -3.73%
Tyco Int'l Ltd. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TYC)") else Response.Write("(NYSE: TYC)") end if %>       32.23%
Medtronic Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MDT)") else Response.Write("(NYSE: MDT)") end if %>         0.80%
Abbott Labs. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ABT)") else Response.Write("(NYSE: ABT)") end if %>         -14.80%
Xerox Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: XRX)") else Response.Write("(NYSE: XRX)") end if %>            0.00%
Vodafone  <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: VOD)") else Response.Write("(NYSE: VOD)") end if %> [was ATI]   62.56%
Gen'l Electric <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GE)") else Response.Write("(NYSE: GE)") end if %>         13.34%
Pfizer  Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PFE)") else Response.Write("(NYSE: PFE)") end if %>         -11.05%
Johnson & Johnson <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: JNJ)") else Response.Write("(NYSE: JNJ)") end if %>     14.61%
Merck & Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MRK)") else Response.Write("(NYSE: MRK)") end if %>           -1.36%
Warner-Lambert <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WLA)") else Response.Write("(NYSE: WLA)") end if %>        -8.98%
First Union Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FTU)") else Response.Write("(NYSE: FTU)") end if %>    -23.02%
Amer. Int'l Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AIG)") else Response.Write("(NYSE: AIG)") end if %>     22.12%
                    Top 5         40.84%
                    Top 10        28.36%
                    Top 15        18.81%
                    Top 20        17.06%
                    Top 25        15.65%
                    Top 30        13.16%

S&P Depositary Receipts <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: SPY)") else Response.Write("(AMEX: SPY)") end if %> 13.66%
The full 30-stock model is about tied with the market index this year. The top tiers of 26-week relative strength are again crushing the field. The much-predicted end to the domination of large cap growth stocks -- especially the "high fliers" -- hasn't happened. As is usually the case, it didn't pay to try to predict these things short-term. That's not to say that this strategy won't ever get brutalized over periods of weeks, months, or even years. It does show the tremendous cost an investor would have incurred had he been sitting on the sidelines for the first half of 1999.

You can really see the potential benefits of staying invested when looking at Keystone over a longer time horizon -- the last thirteen and half years. From January 1, 1986 through July 14, 1999, the annualized returns for the different Keystone ports are now:
31.70%  Keystone 5
28.90%  Keystone 10
25.85%  Keystone 15
24.81%  Keystone 20
23.17%  Keystone 25
22.48%  Keystone 30
These have edged all up a bit since my last look at the Keystone 30 history in February. These stocks continue to be some of the most rewarding assets to own and, although their stock prices are sure to fluctuate with current market sentiment, the companies are some of the most financially sound, fastest growing franchises in the world.

Invest for the long run, and may the Fool be with you!

New Rankings | Workshop Returns