Re: [CANSLIM] VectorVest fundies

From: Davellil5@aol.com
Subject: Re: [CANSLIM] VectorVest fundies
Date: Sun, 10 Mar 2002 20:56:03 EST

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Katherine, a fundamental question about VectorVest's Relative Value (RV) 
rating of stocks.

This approach rests on an assumption, i.e., that there is such a thing as an 
objective value of a stock.  If that assumption is true and the objective 
value of a stock is calculated to be 50% higher than its current market 
value, then that stock has an RV of 1.5.  Presumably, when the market 
realizes that the stock's objective (real)   v alue is 50% higher than 
current price, the market will be willing to pay that much more for the stock.

But if there really is no objective value for a stock, the RV logical 
structure crumbles.  In that case, we have to fall back on the CANSLIM 
approach that relies on patterns of stock behavior to 


 

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