Teresa, I spend an incredible number of hours maintaining a lot of FA information on the companies that I call the Big Boyz; some 77 companies that comprise about 50% of all the equity in this country.
I believe that there are periods that it works incredibly well, specifically year end.
FA Valuation, according to The Intelligent Investor really only involves three variables: current earnings, a projected growth rate, and an interest rate environment. For example, my month-old numbers reflects a fair value for CSCO of $13, based upon next year's earnings. Am I willing to step up to the plate at these prices? Not with your money, and certainly not with mine. However, there are other examples that show a positive spin, and we will get there.
The other side is that I developed a 15 point scoring system with "13" being a perfect score, as there are two negative scores involved (negative cash flow and historic high PE). Very seldom does one of the Big Boyz even get a score above 10, but when they do it is a buy. FWIW none are there now. The problem with FA is, if you have a trader's heart, it is tough to just sit on the sidelines when nothing looks good FA wise.
JMHO and A View from the Swamp
Edit -- It is hard to even imagine a major world market hitting a new 16-year low!!!
Berney |
