Workshop Portfolio Welcome to the Foolish Workshop!

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NOTE: The Workshop has been discontinued. Please see the final Workshop Report for an explanation.

Hi there. Pull up a stool and take a load off. Watch the sawdust, and -- hey, don't touch that! It's not finished yet.

The Foolish Workshop is our permanently under-construction laboratory where we test and build stock screening techniques. The workshop is very much a process, not a finished product. The purpose of the process (try saying that after a few beers!) is to identify stocks that will outperform the market, hopefully by a wide margin.

The enormous amount of data now available to the individual investor and the power of computers to manipulate that data make stock screening an exciting and dangerous technique. Exciting because the ability to rapidly and efficiently sort thousands of stocks on the basis of factors like earnings growth, company size, and recent price appreciation gives the individual investor the kind of decision-making tools that professional investors only dreamt of just a few years ago. Dangerous because the potential for faulty analysis or just plain confusion grows as the amount of data grows.

That's what makes this process so fascinating. The challenges inherent in the process have spawned a Foolish community that values clear thinking and logical creativity. Along the way they have developed some very interesting ways to use that wealth of data.

You see, most of the screens we discuss in this area were developed by members of this community interacting on our message boards, and that process is ongoing. The workshop is not a product of professionals or even Fool staff, it is a product of Fools from all over, working together, discussing, criticizing, and testing.

While some of the screens developed here have been awesome performers in the recent past, the backtested histories of many of them are brief, or even nonexistent. So don't assume that because a growth screen is up some astounding percentage for the year that you should throw all of your money into it. If you are inclined to use one of these screens, either "as is" or as a source of stock ideas for further study, be sure you understand it, and its limitations. Remember always, "Past performance does not guarantee future performance." And for most of these screens, the past is very short.

What will you find here?

For starters, a twice-weekly column that runs every Tuesday and Thursday. It is designed to introduce you to the workshop process and explain some of the basic concepts and terms used. Pop over here to see it.

Workshop Discussion

Our two message boards are the heart of the Foolish Workshop.

The Foolish Workshop board helps newcomers pick their way through the chaos and learn to understand and use the various stock screens. The heavy work takes place on the Mechanical Investing board. Backtesting, statistical analysis, rigorous intellectual debate, consensus building, and a fair amount of fun keep that board consistently one of the most prolific and productive boards on the Motley Fool site.

Join us there for questions and answers about stock screening techniques, backtesting, and current rankings and returns for more screens than are followed in the formal Workshop area. You might even try your hand at designing a screen yourself!

Screens We Are Following

Then there are the screens we are officially tracking -- twelve in 2000 -- some have been around for a while, some were developed just last year. Most have one thing in common. They start with the Timeliness Rankings provided by Value Line, available in many public libraries or by subscription from Value Line. For more on Value Line's Timeliness Rankings, see: Timeliness Rankings, Part 1 and Timeliness Rankings, Part 2.

Timeliness rankings are valuable predictors of stock performance, but 100 stocks are ranked #1 for timeliness and another 300 are ranked #2. The information we use to narrow the field down to just a few stocks comes from Value Line's extensive database of company information or from the stock tables of the Investor's Business Daily newspaper, paper edition. For a detailed explanation of the factors used for each screen, and historical returns for some of them, see Workshop Screen Explanations.

Each week we run the screens using the latest data available and publish the results in Current Rankings. We also update the Year-to-date Returns for model portfolios based on the stocks that were chosen by each screen at the beginning of 2000.

Note: Until January of 1999 we also published a database that included stocks ranked 1 for timeliness by Value Line. See Current Database Notice for more on why it is no longer provided.

Other Screens

Four other screens live in the Stock Screens area: Rising Margins, Falling Margins, Beat Estimates (a.k.a. Earnings Surprises) and Missed Estimates. These screens are run each week to highlight stocks that may be worth looking into or may need looking out for (in the case of Falling Margins and Missed Estimates!)

Here's to good investing!