An SSG is a Stock Selection Guide. It is a
standardized form used by the NAIC, or National
Association of Investors Corp, for evaluating
the merits of an investment in a particular
company. The SSG provides a method for evaluating
a stock based much more on a fundamentals or
value basis than it does the momentum or technical
analysis techniques which are often applied to
the same problem. The SSG is not a "formula" or
cookbook approach, though. Rather, I think of it
as much more of a standardization tool which allows me to
look at many possible investments under exactly the same
light. It forces an investor to become more rational
in his or her thought processes by requiring projections,
predictions, etc., to be based on what is currently
known about the company and to be compared and contrasted
with performance in the past. Obviously, those
predictions and projections are the key -- the SSG
simply forces them into a more organized format.
I have found it most useful in the past, but as I
mentioned before, my horizon is not at all short term.
I have found myself to be a relatively poor investor when
the timeframe is anything less than 6 to 9 months.
With respect to my comment concerning VSH being near a
price which I would consider its low, you are certainly
correct in that any number of unforseen circumstances
could severely impact the stock price, but given its
historical average low PE of around 9 and what I consider
to be its healthy increase in margins, earnings, etc, I
have projected a low of around 14 to 15. Further, because
of my time frame, I am not particularly concerned about
getting in AT the low price. I am comfortable with being
NEAR that low, since my I view the stock as having a great
deal of upside potential. If anyone is interested, my own
humble analysis (guess) is that within 2-5 years from now
you would be able to sell the stock at around 50 dollars.
(average high PE of last 5 years * my estimated earnings
five years out of 2.50).
I have babbled on for too long, but I would appreciate
your comments, and, if anyone is interested, I will
try to give more thorough details of my analysis later
today.
Sorry this was so long.
J |
