ALYA Cost cutting system via software as well as security Message Board

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Microcap & Penny Stocks : ALYA Cost cutting system via software as well as security

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To: MKTBUZZ who wrote (399)	5/6/1998 5:08:00 PM
From: Crossy	Read Replies (2) of 2534

MKTBUZZ, sorry but I really have to contest that. PSR weighed with industry average margin profitablity is the tool Mr. Buffet and others are using to find value investment. The underlying trick here is that it strips out financing & management inefficiencies - variables that can change and CAN BE CHANGED in the long run. The next quarter earnings thing is a mentality I do not feel comfortable with. You and all the other pundits are staring at it. What should I gain at it by analyzing PE wise when the market got all info priced in ? Everything else is reading rea-leaves IMHO and carries with it so many assumptions everybody can contest. When You give me an example of Crown Books I can only maintain that balance sheet data DOES matter. Capital deficency, current ratio negative and the thing or continuous losses are a matter of fact and not something I would like to invest in, regardless of Price Sales ratio. However AFTER a succesful chapter 11 such a company often is NOT YET profitable and carries little debt. Many of those plays are extremely succesful. The PE-pundits will never catch them because PE data is a lagging indicator. I'm giving more weight to top-line oriented ratios. PSR is one of them. Less assumptions necessary. We can argue hours about this.... To give an example of the misleading nature of PE-ratio, look at APM - Applied Magnetics. Had a PE-ratio of 5 last fall. Guess what, that were historic earnings - TTM - trailing twelve months. Old data -stale data. Projections with earnings for the future carry too much assumptions. Sales are easier to do. JMHO. The PE-pundits will never catch them because PE data is a lagging indicator. I'm giving more weight to top-line oriented ratios. PSR is one of them. Less assumptions necessary. We can argue hours about this.... So let's do this: You look to PE while I'm reading balance shetts and calculating PSR.... <g> regards CROSSY

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