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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: Mike Buckley who wrote (48533)	11/3/2001 6:37:45 PM
From: Pirah Naman	Read Replies (1) of 54805

Mike: a more useful approach is to identify the growth required over a five- or ten-year period to justify the current price of a stock. Doing so helps us at least understand the parameter the current stock market is using. While this is bound to become more popular in certain circles now (vbg) this is really not doing anything different. When working out a price or a value, it is a simple matter to test a range and see what is implicit in the rest of market participant's expectations. Or those who enjoy algebra or computers can work it backwards. I agree that this is useful for conducting a reality check; my point is that the two approaches should most definitely not be seen as separate. Indeed, they are the same approach, rearranged, and require the same understanding. some times it might be better to assess the market's expected growth implied by the stock price than to come up with our own long-term estimates which are difficult if not impossible to reliably predict. Again, they are the same, merely the arrangement is different. And one can (and should) easily do a reality check using either arrangement. - Pirah

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