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There may have been a few who broke early to get to the tables, but most of the group seemed to think that they would ultimately make more money, and even have more fun, listening to the ins and outs of mechanical stock selection techniques.
What was even more amazing was that the group showed very little interest in the tech market slaughter that had gone on all last week (and is continuing with a vengeance today). Here were hundreds of people, most of whom were heavily invested in tech stocks -- since that is what the Foolish Workshop screens have tended to recommend recently -- and almost no one knew what their portfolio had done on Friday (most had been on the road or in the air), and no one that I ran into cared.
This was true unemotional investing. Even though almost everyone's portfolio was down at the time, the prevailing attitude was faith in the long-term viability of properly designed and tested mechanical strategies. (Of course, after today, some of them may be halfway to the sidewalk about now, but I don't think so.) What was really expressed was not faith in the screens so much as faith in the community -- that the power of working together and sharing information would give them an edge no matter how the market changed.
Our own blue-chip Foolish Four, the original mechanical investing strategy, has been moving steadily upward as the Nasdaq crash has sent investors looking for a refuge from the storm. At the moment we are beating both the Dow and the S&P 500 in the short term and since the portfolio started.
The most interesting discussion (to me) at the conference centered on a recently completed backtest that pushes back the testing period on some strategies to 1969. The information is still somewhat raw and is still being digested by the Mechanical Investing community, but there is no doubt about the broad findings which show that relative strength strategies are very "robust." They work well in all kinds of markets, over a long time period.
The Workshop was separated from the Foolish Four area in order to give Fools a place to experiment. In the case of the relative strength strategies, this recent backtest says to me that they are no longer experimental. They are far more proven and tested than the Foolish Four was when it was first presented to the world. So you can expect to hear more about relative strength investing in this space.
Another broad finding from the backtest was that the Keystone 100 strategy, which we have discussed as a possible complementary strategy to the Foolish Four (see "A Foolish Five of Growth Stocks"), is not as robust. It is very successful during times when large companies do best, but when the investing cycle favors smaller companies, its emphasis on large market cap companies hurts it. On the other hand, a relative strength screen, which does not look for companies of a particular size, performs well in either situation.
MICon2000 has given me much to think about and mull over and share with you in the coming days. But the experience was even more valuable as a way to get to meet and talk with Fools from all over the country, many of whom started out with the Foolish Four because they were drawn to its simple, quantitative approach to investing. The conference was a message board come to life, and the respect and friendship that has been built up on the message board came to life as well. Amazing! All that glitter, but the real gold was just sitting in a room with an overhead projector.
Fool on and prosper!
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