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

To: Justinfo who wrote (51773)	6/25/2013 11:09:53 PM
From: Spekulatius	3 Recommendations Recommended By Jurgis Bekepuris Justinfo sjemmeri Read Replies (1) \| Respond to of 78740

I use PSR only if other metrics are not applicable, for example in turnaround situation where a company is not profitable. Then you can get an idea about the appreciation potential by comparing the PSR with peers. Of course doing this directly implies that the company may restore profitability (in the end that is the only thing that matters) to the same level than peers going forward. I do not think PSR is a good way to companies from different business lines or even different business models within the same business (for example asset heavy and asset light companies). I have seen some nonsense articles in seekingalpha or so, that employed a simple PSR screen and they ended up with many low margin pharma distributors as "value stocks". That is utter nonsense, imo.

To: Justinfo who wrote (51773)	6/26/2013 12:35:42 AM
From: Paul Senior	1 Recommendation Recommended By Justinfo Read Replies (1) \| Respond to of 78740

JustInfo, I use PSR for all stocks. I always (unless I forget) check current psr vs. the company's historical psr. I only check the company to itself--- not the company to other companies or to the company sector's psr. I'm a big believer in the effect of reversion-to-mean, and psr provides some metric to capture that possibility. PSR worked after the '08 crisis... but everything worked after the '08 crisis. (Well, maybe not shorting.) There seem to be so many macro events affecting the market, and the sample size I have for me going back a couple of years is so small, that all I'm comfortable saying is that I have used psr for maybe 15 or more years, generally, but not always, in conjunction with other metrics, and so far as I can remember, I've experienced no real reason or pain to cease doing this. Others may have a different experience or opinion on the value of psr.