Re: Pearl of Wisdom (was [CANSLIM] CCR - I offer this up for dissection)

From: Harvey Brion <hbrion@ieee.org>
Subject: Re: Pearl of Wisdom (was [CANSLIM] CCR - I offer this up for dissection)
Date: Tue, 13 Aug 2002 13:18:04 -0700

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A caution here, it's good to keep in mind that trailing PE ratios at least are
"real," while projected PE ratios are only as good as the earnings forecasts and
can be way off, especially beyond the current quarter and FY.  This risk is
reduced somewhat for older/larger companies that have a history of making or
exceeding the quarterly earnings forecasts, so called "positive surprises."

That said, I consider both trailing and projected PEs in my stock selection.


> <snip>
> And that's why looking at trailing PE ratios is a waste of time, they are
> merely history, no one is likely to react to them. On the other hand,
> forecasts / projected PE ratios can create a sense of expectation, hence
> drive the price to where the stock trades at a premium based on that
> expectation.
> <snip>


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