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To: John Malloy who wrote (9138)	8/11/1999 10:09:00 AM
From: jbIII	Respond to of 21876

How do I get it to print as italics? techstocks.com JB3(back to lurking)

To: John Malloy who wrote (9138)	8/11/1999 10:28:00 AM
From: GVTucker	Read Replies (1) \| Respond to of 21876

RE: Stock price model (to use a more correct term) I'm still not convinced. When you say: As part of the analysis I work out the price/book ratio which fits the stock's historical performance. That historical ratio contains whatever market inefficiencies were involved as the market priced the stock. I start my price/book forecast at the current ratio, and draw a free-hand forecast curve to reflect how I think that ratio will change as the growth firm matures. what parameters do you use to determine this curve? If the inputs are quantitative, what are they? If the inputs are qualitative, it strikes me that this make the entire model subjective and not quantitative; you could adjust the curve only slightly and change the whole analysis. (Not that there's anything wrong with subjective analysis, mind you. In fact, I think that it is the only way to go. It's just that I think that you presented this model as a quantitative method of security analysis, and the price/book assumptions that are needed take this quantitative aspect away.)