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  • Dr. Paul Price commented on The Science of Hitting's article 01-10 20:23
    How to Analyze a Company
    A fellow GuruFocus reader recently sent me an email with the following question: “Which books would you recommend if I want to start investing in...
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    Dr. Paul Price 01-10 20:23
    • Doing all that work (multi-year data collection) is fine but you are re-inventing the wheel. 

      Value Line provides subscribers with up to 15-years of data on over 1700 companies, all on one page which includes each year's share price action included as a bonus.

      Standard & Poors reports give 10-years of backward-looking numbers, incluidng most of the metrics you mentioned. 

      Good long-term company performance is always a positive. That said, every stock has a yearly high and low which are often far apart, representing very diverse risk/reward propositions. The same great company could be a sell at one valuation or a buy at a cheaper price point. 

      The statistical data you spoke about would be the pretty much the same at both the stock's nadir and its peak. That makes it mostly useless in buy-sell-hold decision making.

      COST traded for as little as $138.57 and as high as $169.59 over the last 12-months. Those who paid the top print are not happy today while investors who bought near the bottom are feeling great. Most stocks exhibit much larger percentage intra-year swings than low-volatility Costco. 

      Valuation is by far the most important consideration.









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