Re: [CANSLIM] Cheap?

From: "Winston Little" <wlittle1@peoplepc.com>
Subject: Re: [CANSLIM] Cheap?
Date: Tue, 16 Jul 2002 13:39:59 -0400
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Fred:

You are very correct on that item.

That is one of the reasons that I often tell people that two of  the worst
inventions of the past century were computers and copy machines, even though
we think we cannot survive without them.


- ----- Original Message -----
From: "Fred Richards" <adrich@gte.net>
To: <canslim@lists.xmission.com>
Sent: Tuesday, July 16, 2002 1:14 PM
Subject: RE: [CANSLIM] Cheap?


> There is just one thing, I might add.
>
> In 1965, there was no computer trading wherein a human was making the
> decisions. During June, about 45% of all trading was computer generated
> trading.
>
> Based upon a couple of comments from friends, July may be higher and
> certainly, the run-ups in the afternoon can be largely attributed to
> computer generated trading volume as opposed to day traders or bargain
> hunters.
>
>
> -----Original Message-----
> From: owner-canslim@lists.xmission.com
> [mailto:owner-canslim@lists.xmission.com]On Behalf Of Winston Little
> Sent: Tuesday, July 16, 2002 12:10 PM
> To: canslim@lists.xmission.com
> Subject: Re: [CANSLIM] Cheap?
>
>
> Zillagirl:
>
> In 1965 approximately 10% of the US population invested in stocks. At that
> time, just over 50% of all TRADING was done by individuals.
> In April 2002 approx. 60% had stock ownership. However, more than 80% of
the
> TRADING is through institutions. Thus, one would conclude that the bulk of
> the increased ownership is exercised through mutual and pension and 401(k)
> funds.
>    There are currently about 17,000 publicly traded companies today (no
idea
> what the number was in 1965). Most of these issues are low priced issues,
> since, as once one goes beyond the first 700 or so issues, the share price
> is well below $5/share.
> I like to try to reduce things to a simple view. To me then, PER is a
> measure which to me expresses the relation between GREED or FEAR at any
> particular time. As greed rises, so too the PER rises as demand for a
given
> issue increases. As PER falls, then fear begins to overwhelming greed.
>
> Thus I believe you are on the right track for PER ratios in your
postulate.
> There will be some divergence from the past.
> However, my belief is that the divergence from the old "traditional
values"
> may not be enormous when mass FEAR and despair sets in and the crowd
> overreacts.
>
>
> ----- Original Message -----
> From: "zillagirl" <zillagirl@email.msn.com>
> To: <canslim@lists.xmission.com>
> Sent: Tuesday, July 16, 2002 12:35 PM
> Subject: Re: [CANSLIM] Cheap?
>
>
> > first I don't think that is the same argument- second -I need something
a
> > little more concrete to reform my thoughts on, if in fact they are
wrong.
> > Thanks though
> > ----- Original Message -----
> > From: "J. Lobatto" <jlobatto@nyc.rr.com>
> > To: <canslim@lists.xmission.com>
> > Sent: Tuesday, July 16, 2002 9:14 AM
> > Subject: Re: [CANSLIM] Cheap?
> >
> >
> > > I suspect some Dutchmen made the same argument several hundred years
ago
> > at
> > > the height of the tulip craze.... "only 40% of the population owns
> tulips,
> > > when 85% wants to. Back in the dark ages, only 10% of our fellow
> Dutchmen
> > > owned tulips. Clearly 40 if not 85% will be the norm from now on, so
> > prices
> > > have to stay high....." I know, you'll argue that tulips had no real
> > value,
> > > but did anyone else read today that Dr. Koop. com which was worth
> > > $1,000,000,000 at the height of the dot.mania was just sold to
Vitacost
> at
> > > about $150,000(?). Ouch! I doubt even tulip prices fell that hard.
> > >
> > > Jon
> > > ----- Original Message -----
> > > From: "zillagirl" <zillagirl@email.msn.com>
> > > To: <canslim@lists.xmission.com>
> > > Sent: Tuesday, July 16, 2002 11:57 AM
> > > Subject: Re: [CANSLIM] Cheap?
> > >
> > >
> > > > I have a question for minds that are smarter then my own.  When we
> look
> > at
> > > > price to earnings, don't we have to consider the number of people
> > > investing
> > > > in the market today over what it was in the past.  I've read
> > > > historically -that in the past- 10 to 15% of households were
involved
> in
> > > the
> > > > stock market.  Now I've seen figures of 50% or more.     If 35% more
> > > > American households started putting money in the same 10,000 or so
> > stocks
> > > > that existed before-it seems like that would drive up the price,
even
> if
> > > the
> > > > business was no more profitable or productive then before.(supply
and
> > > > demand). Possible even keeping the price up if these households kept
> > > > investing(higher P/E ratios)      Hence maybe it would be
unrealistic
> to
> > > > think that the correct P/E for this point in time should be exactly
in
> > > line
> > > > with the correct P/Es of the past.  Unless of course that extra 35%
of
> > the
> > > > people got out of the market again.       Kind of like saying-the
> > > > babyboomers are here and our mind tells us that we need many more
> > > retirement
> > > > homes- but historically, over the past 75 years, 2 retirement homes
> per
> > > city
> > > > have been the norm so that is the figure we will stick with.   If
this
> > > > theory sounds reasonable-it would certainly take some of the fright
> out
> > of
> > > > those charts.
> > > > ----- Original Message -----
> > > > From: "Hill, Ernie" <Ernie.Hill@ElPaso.com>
> > > > To: <canslim@lists.xmission.com>
> > > > Sent: Tuesday, July 16, 2002 5:30 AM
> > > > Subject: RE: [CANSLIM] Cheap?
> > > >
> > > >
> > > > > Here is an interesting perspective on PE ratios the S&P and what
is
> or
> > > is
> > > > > not cheap.
> > > > >
> > > > > http://www.decisionpoint.com/ChartSpotliteFiles/020712sppe.html
> > > > >
> > > > > E
> > > > >
> > > > >  -----Original Message-----
> > > > > From: inderjit [mailto:inderjit@adelphia.net]
> > > > > Sent: Monday, July 15, 2002 10:36 PM
> > > > > To: canslim@lists.xmission.com
> > > > > Subject: RE: [CANSLIM] Cheap?
> > > > >
> > > > > You can easily ;-) find out what a stock is worth by visiting
> > > > > http://www.valuepro.net/index.shtml. AOL is worth zero, NVR 1800+
> etc.
> > > > >
> > > > > Regards and have a profitable Tuesday.
> > > > >
> > > > >
> > > > >
> > > > > -----Original Message-----
> > > > > From: owner-canslim@lists.xmission.com
> > > > > [mailto:owner-canslim@lists.xmission.com] On Behalf Of zillagirl
> > > > > Sent: Monday, July 15, 2002 7:51 PM
> > > > > To: canslim@lists.xmission.com
> > > > > Subject: Re: [CANSLIM] Cheap?
> > > > >
> > > > >
> > > > > I emailed Mr. Tom Petruno at the L.A.Times today and asked him if
he
> > > > > could clarify the differences in he's figure and the figure on the
2
> > web
> > > > > sits discussed-will let you know what I find out.
> > > > > ----- Original Message -----
> > > > > From: "Fred Richards" <adrich@gte.net>
> > > > > To: <canslim@lists.xmission.com>
> > > > > Sent: Monday, July 15, 2002 3:42 PM
> > > > > Subject: RE: [CANSLIM] Cheap?
> > > > >
> > > > >
> > > > > > the latest www.decisionpoint.com report on the PE ratio for the
> S&P
> > > > > > 500
> > > > > for
> > > > > > the week ending 6/12/02 stood at a still whopping 39.60 times!
> > > > > >
> > > > > > -----Original Message-----
> > > > > > From: owner-canslim@lists.xmission.com
> > > > > > [mailto:owner-canslim@lists.xmission.com]On Behalf Of Fred
> Richards
> > > > > > Sent: Sunday, July 14, 2002 7:55 PM
> > > > > > To: canslim@lists.xmission.com
> > > > > > Subject: RE: [CANSLIM] Cheap?
> > > > > >
> > > > > >
> > > > > > As an neophyte investor,  what you are missing is an doubting
> mind.
> > > > > >
> > > > > > It is the credibility of the estimates that the author is using.
> > > > > >
> > > > > > Does the article state what firm and/or analyst made the
estimates
> > and
> > > > >
> > > > > > on what basis they were made and/or the time frame?
> > > > > >
> > > > > > Based upon the most reliable information I have using
information
> > > > > > prior to the revamping of the list effective July 19, I believe,
> the
> > > > > > S&P 500 is
> > > > > still
> > > > > > selling way over 19 times forward 12 month earnings.
> > > > > >
> > > > > >
> > > > > >
> > > > > > -----Original Message-----
> > > > > > From: owner-canslim@lists.xmission.com
> > > > > > [mailto:owner-canslim@lists.xmission.com]On Behalf Of zillagirl
> > > > > > Sent: Sunday, July 14, 2002 7:25 PM
> > > > > > To: canslim@lists.xmission.com
> > > > > > Subject: Re: [CANSLIM] Cheap?
> > > > > >
> > > > > >
> > > > > > There is quite an extensive article in the L.A. Times today
about
> > the
> > > > > > markets.  In there it states that " the average stock in the S &
P
> > 500
> > > > >
> > > > > > is priced at about 19 times this years expected earnings per
> share,
> > by
> > > > >
> > > > > > many wall street estimates.  That is far above the historical
> > average
> > > > > > price -to -earnings ratio of about 14." I think I like these
> numbers
> > a
> > > > >
> > > > > > little better.  What's up-am I missing something here?
> > > > > > ----- Original Message -----
> > > > > > From: "Tom Worley" <stkguru@bellsouth.net>
> > > > > > To: <canslim@lists.xmission.com>
> > > > > > Sent: Saturday, July 13, 2002 7:06 PM
> > > > > > Subject: Re: [CANSLIM] Cheap?
> > > > > >
> > > > > >
> > > > > > > I make no investment decisions, or even select stocks for
> > watching,
> > > > > > > on
> > > > > the
> > > > > > > basis of their history. The market, and stock prices, moves on
> > > > > > expectations.
> > > > > > > Those expectations are based on projected earnings, not what
> they
> > > > > > > did
> > > > > last
> > > > > > > year, or five years ago.
> > > > > > >
> > > > > > > ----- Original Message -----
> > > > > > > From: "Rocky Sanghvi" <rs@mylodestar.com>
> > > > > > > To: <canslim@lists.xmission.com>
> > > > > > > Sent: Saturday, July 13, 2002 9:41 PM
> > > > > > > Subject: RE: [CANSLIM] Cheap?
> > > > > > >
> > > > > > >
> > > > > > > Lois,
> > > > > > >
> > > > > > > This was one of the news items on the nasdaq.com website
> > frontpage.
> > > > >
> > > > > > > If
> > > > > > you
> > > > > > > wish to see it you need to go to nasdaq.com and scan some of
the
> > > > > > > older
> > > > > > news
> > > > > > > items.
> > > > > > > This was was from the Dow Jones News Wire.
> > > > > > >
> > > > > > > Best Wishes
> > > > > > > Rocky
> > > > > > >
> > > > > > > PS Tom - I am not sure why we shouldnt look at trailing
earnings
> > as
> > > > > > > a
> > > > > part
> > > > > > > of your overall investment outlook.  Yes maybe not CANSLIM
> (which
> > > > > > > only
> > > > > > looks
> > > > > > > at future earnings) but if we are looking at charts and
history
> we
> > > > > > > may
> > > > > as
> > > > > > > well consider historical facts such as what the news item was
> > > > > > > referring
> > > > > > to.
> > > > > > >
> > > > > > > -----Original Message-----
> > > > > > > From: owner-canslim@lists.xmission.com
> > > > > > > [mailto:owner-canslim@lists.xmission.com]On Behalf Of Lois
> > > > > > > Sent: Saturday, July 13, 2002 9:54 AM
> > > > > > > To: canslim@lists.xmission.com
> > > > > > > Subject: Re: [CANSLIM] Cheap?
> > > > > > >
> > > > > > >
> > > > > > > Rocky,
> > > > > > >
> > > > > > > Would you be so kind as to post a link for the info below?
> > > > > > >
> > > > > > > TIA,
> > > > > > > Lois
> > > > > > >
> > > > > > > Rocky Sanghvi wrote:
> > > > > > > >
> > > > > > > > S&P 500 Price/Earnings Ratio At 37.31, Down From 37.65
> > > > > > > >
> > > > > > > > NEW YORK -(Dow Jones)- The price/earnings ratio of the
> Standard
> > &
> > > > > Poor's
> > > > > > > 500
> > > > > > > > index at the close of trading Friday, July 12, was 37.31.
> > > > > > > > Thursday, the ratio was 37.65.
> > > > > > > >
> > > > > > > > The lowest price/earnings ratio on the S&P 500 came in the
> > second
> > > > > > quarter
> > > > > > > of
> > > > > > > > 1949, when the reading slipped to 5.9. Over the last decade,
> the
> > > > > > > > low
> > > > > was
> > > > > > > > 15.77 in the first quarter of 1995.
> > > > > > > >
> > > > > > > > The price/earnings ratio, known as the multiple, is a
measure
> of
> > > > > > > > the
> > > > > > > average
> > > > > > > > stock price divided by the average earnings per share. The
> > > > > > > > earnings
> > > > > data
> > > > > > > is
> > > > > > > > based on the trailing four quarters.
> > > > > > > >
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