Re: [CANSLIM] price objective

From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: [CANSLIM] price objective
Date: Sat, 24 Aug 2002 20:54:45 -0500

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Hi Roger,

The example given is for PE to expand not *to* 130% of its existing PE, but
an *additional* 130%--

So, if at the break out the PE is 40, then you would expect it to expand to
40 + 130% of 40.

40 + 1.3 (40) = 40 * 2.3 = 92.

Until you pointed out this passage, however, I hadn't noticed a subtle
change in the text. In the old edition, the PE expansion was 125%!

Katherine

PS...yes, I use this as a sell "warning" or "yellow flag."


- ----- Original Message -----
From: "Roger Tawa" <rogerta@ureach.com>
To: <canslim@lists.xmission.com>
Sent: Saturday, August 24, 2002 8:40 PM
Subject: [CANSLIM] price objective


| hi all,
|
| on page 22 of HTMMISv3, the book explains how to use the p/e ratio to
calculate
| a price objective for a stock.  in the example given, a stock with a p/e
of 40
| is used, this is multiplied by 130%, and the final result is 92.
|
| however, 40x1.30 is closer to 52 than 92.  is this a typo in the book, or
is
| WON saying that we need to add the original p/e to the calculated p/e?
|
| does anyone use this calculation as part of their sell rules?
|
| thanks.
|
| derek: i have not read HTMMISv2 so i can't compare it to v3, sorry.
|
| Roger Tawa
| [One thing about paradigms:  shift happens.]
|
|
| Roger Tawa
| [One thing about paradigms:  shift happens.]
|
|
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