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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: Jhende who wrote (6431)	12/17/1998 12:28:00 PM
From: OldAIMGuy	Read Replies (1) \| Respond to of 18928

Hi JH, As I mentioned to Bernie, I look for a historical trend of doubling sales and book value every 5 years or less and at the projection of a double in those areas into their 3-5 year future estimates. I also like very low Stock Price Stability readings for AIM candidates. I look for values there of less than 20. For BETA, my general rule of thumb is to screen for stocks with BETA values of 1.40 or higher. If a stock has a very low BETA value AND a very low Stock Price Stability value, that can still be a good AIM stock. However, you might find that it moves contrary to the market in general. High BETA, Low Stock Price Stability will give you a stock that moves in big leaps in concert with the market. BETA is found in the upper left hand corner of the page while Stock Price Stability is found in the lower right hand corner. I also look at the Debt structure and capitalization values. If a company is carrying debt, they better be making good growth gains for their efforts! If they aren't growing their business at a rate higher than the cost of their money, they would do better without debt and keeping the $$$ in a money market fund! A brand new plant that doubles capacity but takes a company into debt could be good or bad. If they don't make but 4% on the sales of the new capacity, maybe they just are churning $$$ for the sake of the bankers and their egos. We have to be on the lookout as investors for the differences between Economics and EGOnomics! We're not interested in monument builders. In regard to this last item, a friend told me he watches for the "THREE P'S OF INVESTING": PANELING, PRETTY SECRETARIES AND PLANES. If the company has recently built a big new office or remodeled the old office (paneling) that's the first warning. If suddenly there's lots of pretty new secretaries on staff, that's warning #2. If the president feels he needs his own plane to go flying around the country, that's the last straw! Usually they come together and usually it means that EGOnomics have taken over. Unfortunately, it's hard to find this stuff out in Value Line!!! Hope this helps, Tom