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 23:05:25 -0400
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This is a multi-part message in MIME format. - ------=_NextPart_000_0110_01C2431D.E8DA04F0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Nancy, PE is always measured over a 12 month period (4 quarters). When I = see a company that 3 or 4 quarters ago had an unusual loss, I also like = to look at the two latest quarters in making my own assessment of what = the future may hold, and what the PE may change to if the company = continues performing as it has done more recently. Often replacing an = old loss with a projected gain can change the projected PE into a small = number from the very large one shown on a trailing 12 month basis. - ----- Original Message -----=20 From: NANCY POLCARO=20 To: canslim=20 Sent: Tuesday, August 13, 2002 11:04 PM Subject: Re: Pearl of Wisdom (was [CANSLIM] CCR - I offer this up for = dissection) Is a trailing PE simply the last 8 or 10 quarters of earnings posted and = is that what you look for in the figures?=20 ----- Original Message ----- From: Tom Worley Sent: Tuesday, August 13, 2002 7:10 PM To: canslim@lists.xmission.com Subject: Re: Pearl of Wisdom (was [CANSLIM] CCR - I offer this up for = dissection) 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. - ------=_NextPart_000_0110_01C2431D.E8DA04F0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable <!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> <HTML><HEAD> <META http-equiv=3DContent-Type content=3D"text/html; = charset=3Diso-8859-1"> <META content=3D"MSHTML 6.00.2716.2200" name=3DGENERATOR> <STYLE></STYLE> </HEAD> <BODY=20 style=3D"BORDER-RIGHT: medium none; BORDER-TOP: medium none; FONT: 10pt = verdana; BORDER-LEFT: medium none; BORDER-BOTTOM: medium none"=20 bgColor=3D#ffffff> <DIV><FONT face=3DArial size=3D3>Nancy, PE is always measured over a 12 = month period=20 (4 quarters). When I see a company that 3 or 4 quarters ago had an = unusual loss,=20 I also like to look at the two latest quarters in making my own = assessment of=20 what the future may hold, and what the PE may change to if the company = continues=20 performing as it has done more recently. Often replacing an old loss = with a=20 projected gain can change the projected PE into a small number from the = very=20 large one shown on a trailing 12 month basis.</FONT></DIV> <DIV> </DIV> <DIV style=3D"FONT: 10pt arial">----- Original Message -----=20 <DIV style=3D"BACKGROUND: #e4e4e4; font-color: black"><B>From:</B> <A=20 title=3DZILLAGIRL@msn.com href=3D"mailto:ZILLAGIRL@msn.com">NANCY = POLCARO</A> </DIV> <DIV><B>To:</B> <A title=3Dcanslim@lists.xmission.com=20 href=3D"mailto:canslim@lists.xmission.com">canslim</A> </DIV> <DIV><B>Sent:</B> Tuesday, August 13, 2002 11:04 PM</DIV> <DIV><B>Subject:</B> Re: Pearl of Wisdom (was [CANSLIM] CCR - I offer = this up=20 for dissection)</DIV></DIV> <DIV><BR></DIV> <DIV>Is a trailing PE simply the last 8 or 10 quarters of earnings = posted and is=20 that what you look for in the figures? </DIV> <DIV> </DIV> <BLOCKQUOTE=20 style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; = BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px"> <DIV style=3D"FONT: 10pt Arial">----- Original Message -----</DIV> <DIV style=3D"BACKGROUND: #e4e4e4; FONT: 10pt Arial; COLOR: = black"><B>From:</B>=20 Tom Worley</DIV> <DIV style=3D"FONT: 10pt Arial"><B>Sent:</B> Tuesday, August 13, 2002 = 7:10=20 PM</DIV> <DIV style=3D"FONT: 10pt Arial"><B>To:</B> <A=20 = href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>= </DIV> <DIV style=3D"FONT: 10pt Arial"><B>Subject:</B> Re: Pearl of Wisdom = (was=20 [CANSLIM] CCR - I offer this up for dissection)</DIV> <DIV> </DIV>I disagree, Harvey, we are talking about a snapshot = in time,=20 doesn't matter<BR>for that purpose if the forecasts prove to be real = or=20 imaginary. If the<BR>investing community, right now, perceive them to = be real=20 (or even likely)<BR>and they are far superior to the rest of the = industry=20 group, or the market<BR>at large, then they can create an expectation. = If=20 those expectations later<BR>start to be questioned, then the charts = will warn=20 you with other companies<BR>reducing forecasts, reporting below = expectations,=20 price lines on charts<BR>trending down, etc.<BR><BR>While I don't give = any=20 weight to trailing PEs, I do look at the actual<BR>earnings for = apparent=20 trends (especially sequentially), and also take note<BR>where = forecasts were=20 then available how they compare to what was then<BR>expected. I also = apply the=20 "logical" test to any forecasts, including seeing<BR>what they must do = for the=20 remainder of the year just to make forecasts.<BR><BR>----- Original = Message=20 -----<BR>From: "Harvey Brion" <hbrion@ieee.org><BR>To:=20 <canslim@lists.xmission.com><BR>Sent: Tuesday, August 13, 2002 = 4:18=20 PM<BR>Subject: Re: Pearl of Wisdom (was [CANSLIM] CCR - I offer this = up=20 for<BR>dissection)<BR><BR><BR>A caution here, it's good to keep in = mind that=20 trailing PE ratios at least<BR>are<BR>"real," while projected PE = ratios are=20 only as good as the earnings forecasts<BR>and<BR>can be way off, = especially=20 beyond the current quarter and FY. This risk is<BR>reduced = somewhat for=20 older/larger companies that have a history of making or<BR>exceeding = the=20 quarterly earnings forecasts, so called "positive = surprises."<BR><BR>That=20 said, I consider both trailing and projected PEs in my stock=20 selection.<BR><BR><BR>> <snip><BR>> And that's why looking = at=20 trailing PE ratios is a waste of time, they are<BR>> merely = history, no one=20 is likely to react to them. On the other hand,<BR>> forecasts / = projected=20 PE ratios can create a sense of expectation, hence<BR>> drive the = price to=20 where the stock trades at a premium based on that<BR>> = expectation.<BR>>=20 <snip><BR><BR><BR>-<BR>-To subscribe/unsubscribe, email=20 "majordomo@xmission.com"<BR>-In the email body, write "subscribe = canslim"=20 or<BR>-"unsubscribe canslim". Do not use quotes in your=20 email.<BR><BR><BR><BR>-<BR>-To subscribe/unsubscribe, email=20 "majordomo@xmission.com"<BR>-In the email body, write "subscribe = canslim"=20 or<BR>-"unsubscribe canslim". Do not use quotes in your=20 email.<BR></BLOCKQUOTE></BODY></HTML> - ------=_NextPart_000_0110_01C2431D.E8DA04F0-- - - - -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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