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Strategies & Market Trends : Value Investing
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To: sjemmeri who wrote (8856)11/2/1999 2:58:00 PM
From: James Clarke  Read Replies (1) of 78622
 
PEG is not a mathematical relationship (be very suspicious of any of these rules of thumb which don't incorporate interest rates). It is often misused - there is a VERY big difference in valuation between something expected to grow 15% next year and something that can grow 15% for the next 10 years.

When used right, PEG is a starting point for finding some interesting Peter Lynch type stuff. It is also the starting point for finding some of the worst investments you can make.

I no longer look at PEG per se - I tend to focus more on the relationship between return on equity and price/book value. But that captures many of the same names mas a PEG screen would.

JJC

JJC
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