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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: chaz who wrote (52037)	7/12/2002 5:42:49 PM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

Chaz, I'd be concerned about using any blanket approaches to a P/S ratio. You're probably not, but in the interest of keeping it simple you didn't clarify any of the nuances of how you'll apply it. If the top-line growth of two companies is the same, the company with high margins and a really strong balance sheet should command a significantly higher P/S ratio than a company with lower margins and/or a weaker balance sheet. I don't know how you're factoring in the beta. I don't know what the beta would have to do with the price unless you're using more of a momentum-based approach. In that event, I don't understand why you would be trying to put a large emphasis on valuation. But not being a momentum investor, I'm really out of my leauge. --Mike Buckley