Workshop Portfolio

<FOOLISH WORKSHOP>

Workshop Money Machine      

by Jim Stevens (JimStevens@aol.com)

Burlington, VT (April 26, 1999) -- I hope everyone gets a chance to read up on the Fool's special coverage of Mr. Wade Cook's financial seminar business. For those of you who haven't had the pleasure, Wade Cook is a self-proclaimed expert on making fast money in the stock market. To learn his supposed "no brainer" options trading strategies, one must pony up almost $4,000. Mr. Cook's rates, as you can see, are a bit steeper then the cost of surfing into the Foolish Workshop and enduring a few often useful banner advertisements to get mechanical investment ideas.

So aside from the fact that the Foolish Workshop is practically free and the Wade Cook methods cost thousands to learn, how do the two purveyors of quantitative investment ideas compare? Considering the Wade Cook charges a small fortune, you'd expect to find tons of documented empirical tests of his techniques in action, right? Well, the only thing I could find at the website were some testimonials from his seminar customers. Some had made money using his methods, I guess.

What do you get here at the Foolish Workshop? Backtests a plenty and more backtests on the way, going on three years of real-time investment model testing, and many verifiable real money investments shared anecdotally by Workshop readers.

How about risk and trading costs? Does Mr. Cook promise you'll never lose a penny or send an option trader's kid to college on the way to your quick millions? Not hardly. Even without referring to Wade Cook's teachings, a look at any broker's account application will clue you in to the fact that using margin leverage and trading options (both encouraged by Cook) are incremental steps up the risk ladder from straight equity investing. Speed trading options can undoubtedly run up a big brokerage commission tab, no matter how little you pay per trade.

In the Foolish Workshop, all the model returns followed regularly are non-leveraged straight equity investments. Translation: less risk. We do discuss using margin occasionally, and there are some more experienced Workshop regulars who have the time and experience to apply some Workshop-style investing to option trading. As for trading costs, the Foolish Workshop aspires to keep you totally miserly in this regard, suggesting a maximum cost be set at 2.5% of your total investment, with the eventual goal of getting it down under the cost of a cheaply run mutual fund's management fee.

The real distinction, the one that makes all the difference in the world, apparently, is the amount of sales pitch and other rhetorical hype. On the Wade Cook front, it's basically 100% sales pitch and very little in the way of things potential investors could actually check out or perform easily themselves without first spending money.

Here in the Workshop, almost everything is free. We frequently refer to the Workshop's style as unemotional -- the Kryptonite of investment hype. All of the Workshop strategies can be and are thoroughly tortured in full public view.

I guess it's the lure of proven above-market returns that ignites the interest of both Wade Cook followers and Foolish Workshop-style mechanical investors alike. It's just amazing to me that a sales blitz like the one Mr. Cook's company wages around the country can be so much more effective at attracting investors' attention than the cold hard facts and proven results one can find -- and share -- so easily in the Foolish Workshop. Chalk it up to pure greed and P. T. Barnum's old adage, I suppose.


Check out the latest file updates for the Workshop:

New Rankings | Workshop Returns


Workshop Portfolio


9/28/01 as of ~5:30:00 PM EDT

Ticker Company Price
Change
Daily Price
% Change
Price
AETAETNA INC NEW0.943.36%28.94
BABOEING CO(1.04)(3.02%)33.36
CATCATERPILLAR INC1.112.53%44.91
COGCABOT OIL & GAS 'A'0.693.59%19.90
DDDU PONT (EI) DE NEMOURS0.992.74%37.14
DGXQUEST DIAGNOSTICS(0.45)(0.73%)61.42
EKEASTMAN KODAK0.421.31%32.49
GMGENERAL MOTORS1.393.38%42.55
LHLABORATORY CORP AMER HLDG(NEW)1.141.42%81.21
MOPHILIP MORRIS COS(0.76)(1.55%)48.24
NEWPNEWPORT CORP0.261.90%13.97
NVRNVR INC(0.54)(0.38%)140.41
PKXPOHANG IRON & STEEL ADS1.097.51%15.61
PVNPROVIDIAN FINANCIAL1.075.64%20.04
QCOMQUALCOMM INC(0.40)(0.84%)47.16
RJRRJ REYNOLDS TOBACCO HLDGS(0.69)(1.19%)57.31
SLESARA LEE CORPUnchg.Unchg.21.09
UNFIUNITED NATURAL FOODS0.563.18%18.15
WMIWASTE MANAGEMENT(0.01)(0.04%)26.74

Overall Return -- total % Gained (Lost)
  Day Week Month Year
To Date
Since
Inception
(12/24/1998)
Workshop1.30%7.32%(12.02%)(20.66%)(18.91%)
Comparable S&P 500n/an/an/an/a(19.07%)
S&P 500 (DA)1.95%7.48%(8.33%)(21.22%)(14.88%)
NASDAQ2.02%4.71%(17.46%)(39.68%)(31.41%)
DJIA (DA)1.68%7.07%(11.07%)(17.86%)(2.22%)

Internal Rate of Return -- Annualized Rate of % Gained (Lost)
  Since Inception (12/24/1998)
Workshop(17.62%)
vs. S&P 500(17.63%)

Trade Date # Shares Ticker Cost/Share Price Total % Ret
1/8/0126MO40.9448.2417.82%
1/8/0122RJR50.1057.3114.39%
1/8/0167UNFI16.4518.1510.34%
12/24/9824CAT43.0844.914.24%
1/8/018NVR136.63140.412.77%
1/8/0140WMI27.4426.74(2.54%)
1/8/0150SLE22.5421.09(6.42%)
1/8/0161PKX17.8315.61(12.46%)
1/8/0115DD48.8337.14(23.95%)
1/8/0129AET38.1728.94(24.19%)
1/8/0139COG28.7519.90(30.79%)
1/8/0114QCOM75.5447.16(37.57%)
1/8/018LH134.6981.21(39.70%)
12/27/9918GM73.2642.55(41.92%)
1/8/0118BA59.5333.36(43.96%)
1/8/019DGX114.4961.42(46.35%)
12/27/9920EK65.0932.49(50.08%)
1/8/0120PVN55.5020.04(63.89%)
1/8/0115NEWP74.9613.97(81.36%)

Trade Date # Shares Ticker Total Cost Current Value Total Gain
1/8/0126MO$1,064.50$1,254.24$189.74
1/8/0122RJR$1,102.25$1,260.82$158.57
1/8/0167UNFI$1,102.12$1,216.05$113.93
12/24/9824CAT$1,034.00$1,077.84$43.84
1/8/018NVR$1,093.00$1,123.28$30.28
1/8/0140WMI$1,097.50$1,069.60($27.90)
1/8/0150SLE$1,126.88$1,054.50($72.38)
1/8/0161PKX$1,087.75$952.21($135.54)
1/8/0115DD$732.50$557.10($175.40)
1/8/0129AET$1,107.00$839.26($267.74)
1/8/0139COG$1,121.37$776.10($345.28)
1/8/0114QCOM$1,057.62$660.24($397.39)
1/8/018LH$1,077.50$649.68($427.82)
1/8/0118BA$1,071.50$600.48($471.02)
1/8/019DGX$1,030.44$552.78($477.66)
12/27/9918GM$1,318.62$765.90($552.73)
12/27/9920EK$1,301.75$649.80($651.95)
1/8/0120PVN$1,110.00$400.80($709.20)
1/8/0115NEWP$1,124.37$209.55($914.83)
 
Cash: 
Total: 
$10.80
$15,681.03
 

Key
• S&P 500 (DA) = dividend adjusted. Dividends have been added to the total return of the index.
• DJIA (DA) = dividend adjusted. Dividends have been added to the total return of the DJIA.

Note
Note: The Workshop Portfolio was launched on December 24, 1998, with $4,000 which was invested in the Foolish Four strategy. Approximately $15,000 was added on January 8, 2001, to support five additional mechanical strategies. At that time approximately $1000 was transfered out of the Foolish Four strategy to bring the Foolish Four into balance with the other strategies. (That's why the Foolish Four's overall return is not consistent with stock values.) Such rebalancing will take place each year among the strategies so that each will start out with approximately the same value at the begining of the year. No more cash additions are planned. The first four tables above show the overall performance of the portfolio. Below that we also track the performance of each component strategy. All transactions are announced publicly before being made, and returns are compared daily to the S&P 500 and the Dow. (Dividends are included in the yearly, historic and annualized returns.) Stocks are chosen using strategies developed by the Workshop community.