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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (42592)	8/5/2005 10:51:30 AM
From: Logain Ablar	Respond to of 70281

Hi Harry: From HIG's press release it appears the P&C pricing cycle started from the 9/11 CAT and extened by the 4 FL hurricanes last year has peaked. Still money to be made if no major CATs as cash flow is strong but 14x earnings and 2x book is ususally peak even in good times. I would recommend lightening up in this sector.

To: Johnny Canuck who wrote (42592)	8/6/2005 3:55:34 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 70281

S&P PROMISING GROWTH PORTFOLIO • From S&P By David Braverman A Buffett-Style Performance S&P updates its screen, which uses criteria that fit the great investor's growth-oriented style. Take a look at how it has fared If Warren Buffett had only a short-term investing focus, he might be tearing his hair out. Take a look the recent underperformance of his company, Berkshire Hathaway (BRK.A ). The stock has lagged the broader market so far in 2005 (through July 29), falling 5.0%, compared with a rise of 1.8% for the large-cap Standard & Poor's 500-stock index. The issue also trailed the 500 in 2004, rising 4.3% vs. the benchmark's 9% increase, and in 2003, with a respectable gain of 16%, vs. the index's surge of 26%. But of course, Buffett has made his reputation as the world's greatest investor by taking the longer view -- buying quality stocks with good earnings power and hanging on through bull and bear markets. UNPARALLELED PERFORMANCE. The recent soft patch must be placed in the context of the overall results of Buffett's remarkable career. During the last few decades, he has parlayed some well-chosen core holdings into an unparalleled performance record -- not to mention an enormous personal fortune. Berkshire's book value per share has grown at a compounded annual rate of more than 20% over the last 38 calendar years. If you had invested $10,000 in Berkshire in January, 1968 (the shares closed at $20.50 on the last trading day of that month), your holding would be worth more than $40 million today. Author Robert Hagstrom tried to compile Buffett's key investing strategies in his 1994 bestseller, The Warren Buffett Way: Investment Strategies of the World's Greatest Investor. Using Hagstrom's book as a source, we at S&P have put together a stock screen that picks companies using criteria similar to those that fit the legendary investor's growth-oriented style. S&P updates this screen on a semiannual basis, in February and August. COMPARING NOTES. Over the years, the screen has put in a pretty good performance itself. In each of the past three calendar years, the portfolio has outperformed the S&P 500 by 9.1% in 2002, 4.6% in 2003, and a whopping 13.4% in 2004. Since its inception on Feb. 13, 1995, through July 31, 2005, it had an average annual return of 16.2%, compared with 9.4% for the benchmark index. (All performance figures are before dividends and transaction costs.) Here's how the screen portfolio has stacked up against the S&P over the years: Year Screen Perf. (% chg.) S&P 500 Perf. (% chg.) 1995 31.4 27.9 1996 41.1 20.3 1997 11.5 31.0 1998 18.1 26.7 1999 18.0 19.5 2000 23.8 -10.1 2001 0.6 -13.1 2002 -12.7 -23.4 2003 31.0 26.4 2004 22.4 9.0 a2005 -4.1 1.8 From inception Feb. 13. aThrough July 31. Many of the stocks from the previous update of the portfolio in February, 2005, also appear in this edition. The screen continues to harbor quite a few health-care and financial shares, as companies in these sectors typically feature high margins and high return on equity -- key criteria for Buffett. Once again, a sprinkling of technology and energy concerns made the list as well. Here's our disclaimer. It should be noted that these aren't necessarily stocks that Buffett has personally bought or ever plans to buy. The list only reflects the criteria that he has emphasized in the past. The full criteria for this screen: 1. Owner earnings ( cash flow less capital expenditures) above $20 million 2. Net margins of at least 15% for the trailing 12 months 3. Return on equity of at least 15% the previous quarter and in every year for the last three years 4. Retained earnings that have grown less than the market capitalization, on an absolute basis in the last five years 5. Looking five years into the future, projected cash flow per share greater than the current market price for each stock (discounted to the present using the 30-year Treasury yield) 6. Market capitalization of $500 million or more The current version of the screen lists 58 names: Company Ticker 3M Co. MMM Abbott Laboratories ABT Ansys Inc. ANSS Apollo Group Inc. APOL Bard C.R. BCR Berry Petroleum BRY Biomet BMET Blackrock Inc. BLK Boston Scientific BSX Brown & Brown BRO Capital One Financial COF China Mobile Hong Kong CHL Cognizant Tech Solutions CTSH Dionex Corp. DNEX Doral Financial Corp. DRL Eaton Vance Corp. EV Epicor Software Corp. EPIC Equifax Inc. EFX Erie Indemnity Co. ERIE Factset Research Systems FDS First Data Corp. FDC Flir Systems Inc. FLIR Forest Laboratories FRX Gillette Co. G Graco Inc. GGG Gtech Holdings Corp. GTK Impac Mortgage Hldgs. IMH Infosys Technologies INFY Integrated Circuit Sys. ICST Intl. Game Technology IGT J2 Global Communications JCOM Johnson & Johnson JNJ K-Swiss Inc. KSWS Kos Pharmaceuticals KOSP Legg Mason Inc. LM Lincare Holdings Inc. LNCR MEMC Electronic Mat. WFR Mobile Telesystems MBT Novartis NVS Novastar Financial NFI Novo-Nordisk NVO Nuveen Investments JNC Occidental Petroleum OXY Omnivision Techn. OVTI Per-Se Technologies PSTI T. Rowe Price TROW Renaissance Learning RLRN SEI Investments Co. SEIC Shuffle Master Inc. SHFL Sigma-Aldrich Corp. SIAL SLM Corp. SLM St. Jude Medical STJ Strayer Education STRA Syntel Inc. SYNT UST Inc. UST Votorantim Celulose VCP Webex Communic. WEBX World Acceptance WRLD Braverman is vice-president for Standard & Poor's Portfolio Advisors