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Strategies & Market Trends : Trader J's Inner Circle -- Ignore unavailable to you. Want to Upgrade?

To: Londo who wrote (45764)	8/11/2001 8:20:43 PM
From: LTK007	Read Replies (3) \| Respond to of 56532

<I am also of the opinion that there are good investments in any markets, bull or bear, just that it's rather unsexy to talk about boring companies with good cash flows, solid balance sheets and thin volume.> no disagreement here,Londo. But here is a good rule to follow. A stock's price is arrived at by 40% overall market conditions,30% sector conditions,and 30% by the stock itself.This via Wharton school teaching that i picked up from someone(i did NOT attend Wharton School).So in a bad market you must have your solid balance sheet in a stock in a favorable sector. 1000 is arbitary for a reason,i consider it a psychological magnet:) I will do more work.But one pro money manager i respect a great deal feels COMPX,fair value is 1250--o.k. A true Bear cycle to reach completion traditionally does not bottom until it goes UNDER fair value. If what i feel is building does overtime manifest,the 1000 would be an easy event in a full shift into Pessimism. Thanks for your data. PaxMax

To: Londo who wrote (45764)	8/12/2001 1:48:17 PM
From: LTK007	Read Replies (2) \| Respond to of 56532

this bit from above article should be right into your strong point.The calculations--<<Moving away from PEG component flaws, the big-picture flaw is twofold. The first is that it ignores interest rates. Evaluating the appropriateness of a P/E -- assuming it were a relevant benchmark -- is impossible without an interest-rate factor. In a 4.5% interest-rate environment, a 20 P/E may be borderline reasonable, whereas the same company can be grossly overvalued at a 15 P/E in an 8.5% interest-rate environment. A relevant judgment on P/E simply can't be made without an interest-rate factor. An intrinsic P/E can be calculated by working mathematically from a basic discounted cash-flow model. You divide the target price by the base EPS used to start the series and create a model P/E, but the key number is still the interest rate.>> end quote.