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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: itilis2003 who wrote (21628)	7/9/2005 2:20:16 PM
From: bruwin	Respond to of 78774

Well itilis, how much you made on MHCO in recent times may make interesting reading for some. Looking at MHCO’s Financial Statements, especially its Income Statements, in the period 1995 to 2000, it’s clear why there was some enthusiasm for its stock. However, in my opinion, these positive aspects have been falling away. Hence its price fall off from $4.80 to $3.60 recently, and its general sideways move since 2002. I’m sure you can identify them for yourself. I also don’t put much store in what Indexes are doing in relation to what individual stocks are doing. The Dow is a favourite for many. I could never understand what the average performance of 30 large cap stocks had to do with an individual company’s performance. Unless, of course, that company’s business was very much dependent on one of those 30 Dow stocks. You give a list of your favourite "stock criteria" by which you evaluate stocks. Well, have you ever considered the fact that those criteria may represent the "effect" and not the "cause" as to why a stock’s price may be attractive ? To find the "cause", I suggest you look into a company’s Income Statement and Balance Sheet and study Turnover, EBIDTA, Net Finance Cost, Pretax Profit, Capital Employed, Long Term Debt, EPS and Dividend. If you studied these items, the relationship between them, and compared these to target values, you’d soon determine whether or not you had a QUALITY company. It’s the quality, or lack of it, of these components which drive a stock’s price in the medium to longer term. That’s why my stock screens involve these items. Price to Book, or Price to Sales etc.. etc.., are, in my opinion, the after effects, not the prime cause. You also stated, "I get the impression you haven’t been investing in stocks very long." Can we presume that you have your own "proprietary system" for judging an investor’s time spent investing on stock markets ? Some may regard your comment as presumptuous.