Go to Jeff Salisbury LWGate Home Page.From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: Pearl of Wisdom (was [CANSLIM] CCR - I offer this up for dissection)
Date: Tue, 13 Aug 2002 22:05:50 -0400
Previous Article (by Author): Re: [CANSLIM] analysts "Tom Worley"
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I disagree, Harvey, we are talking about a snapshot in time, doesn't matter for that purpose if the forecasts prove to be real or imaginary. If the investing community, right now, perceive them to be real (or even likely) and they are far superior to the rest of the industry group, or the market at large, then they can create an expectation. If those expectations later start to be questioned, then the charts will warn you with other companies reducing forecasts, reporting below expectations, price lines on charts trending down, etc. While I don't give any weight to trailing PEs, I do look at the actual earnings for apparent trends (especially sequentially), and also take note where forecasts were then available how they compare to what was then expected. I also apply the "logical" test to any forecasts, including seeing what they must do for the remainder of the year just to make forecasts. - ----- Original Message ----- From: "Harvey Brion" <hbrion@ieee.org> To: <canslim@lists.xmission.com> Sent: Tuesday, August 13, 2002 4:18 PM Subject: Re: Pearl of Wisdom (was [CANSLIM] CCR - I offer this up for dissection) 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> - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email.
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