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

To: cfimx who wrote (505)	10/25/1998 9:41:00 PM
From: Shane M	Read Replies (1) \| Respond to of 4691

twister, To screen the "Buffett-type" companies I look into I project an annualized growth rate in book value, apply some minimum expected ROE and PE. For SHW: Book value looks like it could grow at 12% annually over the next 5 yrs. If it does this Book would be around $16.90. Using a minimum ROE over those years of 16%, and a minimum PE of 14. I arrive at a minimum share price in 5 yrs of around $38. If I can buy today at share price of under $20 I can expect an annual cmpd ROI of around 14%. This is simplistic, I know, but it's the method layed out in the book and it serves as a useful first screen IMO. Didn't realize it had dipped to 20 only a few weeks ago. My database, which is only updated monthly showed it at 25 and the low for the year as $23.75. (I haven't updated for the most recent month). Shane