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Strategies & Market Trends : Disciplined Investing, especially the NAIC way -- Ignore unavailable to you. Want to Upgrade?

To: BrightFuture who wrote (294)	1/17/2002 6:49:17 PM
From: The Philosopher	Read Replies (1) \| Respond to of 469

We don't look at the balance sheet much, except we avoid stocks with high levels of debt, and look for plenty of cash -- sometimes we do a current ratio, but more often we only eyeball it from the S&P numbers. Cash flow is another issue entirely. I ALWAYS look for positive cash flow, and prefer cash flow in excess of earnings, unless there's a hefty dividend. If cash flow is significantly less than earnings, I dig until I find out the reason why. Cash flow is much harder to manipulate than earnings. In fact, I'm getting close to making a policy decision to do the SSG using cash flow instead of earnings. I haven't reached that point yet, but I'm tempted. Another possible article for BI. Can't wait until I'm retired and can start writing for them. I have so many issues I want to address, and the best way to analyze an issue and figure out what you really think about it is to write an article on it.

To: BrightFuture who wrote (294)	1/17/2002 6:51:15 PM
From: - with a K	Read Replies (1) \| Respond to of 469

Interesting, indeed. And after the BI magazine had Enron as its "Stock of the Month" this fall, I remain cautious about placing too much trust in just an SSG. I know this has been discussed at length here. I do look for positive cash flow/share on ValueLine. I also look for no or very little debt; some of our club members have older versions of SSG software that doesn't track that in Section 2. (?) I also look at ValueLine's current assets to current liabilities ratio, where I want at least a 3 to 1. (Is that the Quick Ratio?) - Kris