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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: Mike Buckley who wrote (25949)6/7/2000 12:42:00 AM
From: Bruce Brown  Read Replies (1) of 54805
 
RE: Flow Ratio

Mike,

Excellent article to point out for everyone and Matt continues his valuable string of educating Foolish investors. The majority of proponents that focus only on P/E would simply scratch their heads if they read Matt's numbers on Lucent and Cisco. After they scratched their heads, most of them would continue to pound the table and cry that the P/E is still too high. Go figure...

Thanks to Tom Gardner, I learned the Flow Ratio a little over two years ago. It's a must have tool worth using and keeping for large-caps. Especially as the business model has turned to "just in time" (JIT) for companies.

As Matt mentioned at the beginning of that article, it's a real thermometer. However, one should still combine the flowie with gross and net margins, revenue growth, cash to debt ratios to maintain a quarter after quarter 'check-up' to get the full picture of health.

BB
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