by David Forrest ([email protected])
Fargo, ND (Feb. 19, 1999) -- Hey, Fools! Happy weekend to you all. As promised last week, I went on the experimentation trail this week and tried to put together a mock portfolio that would isolate those stocks that appeared the most times in the weekly rankings. The underlying logic here is that stocks that appear on a lot of different radar screens might be decent performers, as Dell Computer (Nasdaq: DELL) was for 1998.
Here's exactly what I did. I used a pseudo Dozens model, adding stocks just once a month. Each month (the first ranking of the month), I allocated $1000 fake bucks and bought as much as I could of the appropriate company at the day's closing price.
There were two caveats. First, a stock had to appear in at least half of the screens to be considered (4 of 8 last year). Second, I didn't buy something I already owned. These two conditions gave us two months without stocks to buy, which is just fine. Also, if there was a tie, I split the $1000 up and bought proper amounts of each stocks. (There was actually one month where 4 stocks were bought!) Okay, here is what was bought, and when, in this model portfolio:
January 9 - Dell Computer (Nasdaq:DELL)
February 6 - ICN Pharm (NYSE: ICN), Alaska Air (NYSE: ALK)
March 6 - Best Buy (NYSE: BBY), Whole Foods (Nasdaq: WFMI)
April 3 - HBO & Co. (Nasdaq: HBOC) [now McKesson (NYSE: MCK)], PeopleSoft (Nasdaq: PSFT)
May 1 - No addition
June 5 - Lowes (NYSE: LOW), Gap Stores (NYSE: GPS)
July 3 - No addition
August 7 - Lexmark Intl. (NYSE: LXK), Recoton (Nasdaq: RCOT), Staples (Nasdaq: SPLS)
September 4 - Symbol Tech (NYSE: SBL), Wal-Mart (NYSE: WMT)
October 2 - EMC Corp. (NYSE: EMC)
November 6 - Aegon (NYSE: AEG), Biogen (Nasdaq: BGEN), Paychex (Nasdaq: PAYX), Quicksilver (NYSE: ZQK)
December 4 - Solectron (NYSE: SLR)
The results are pretty impressive. To date, the "Most Appearances" portfolio is up 58.50% versus the Standard & Poor's 500 Index, which is up 18.19% in the same period. That said, I have not added in the new stocks for January and February yet. I'll do that soon and get back to you all in next week's report. In the meantime, I'd be interested in anyone's thoughts on this out on the message boards [web link].