Jeff Miller

Anatomy of a Trade: Three Ways to Play Apple

Windsun -- The technical traders don't care about the P/E, just the MA crossover (and similar factors). There were plenty of such comments about Apple.

As I suggested in the article, you cannot just take a website P/E with trailing earnings. For companies with a lot of cash you need to back that out first. Then make sure you are looking at future earnings that include the AT&T payments. When you have a number, compare it to the earnings growth rate. That is the method used by the fundamental analysts I cited, and it is a strong approach.

I hope this clarifies things a bit.

Thanks.

Jeff


On Dec 10 03:59 AM Windsun33 wrote:

> "...Perhaps I acted too soon, since the technical traders are driving
> the stock lower. "
>
> Or perhaps they are looking at the PE of 32'ish and starting to worry.

Reviewing Our January 2009 Market Predictions

U Dontknow --

You are correct, of course. My clients were fully invested, and I was in personal accounts. But we also had losses last year.

If you are a long-only manger, it is a question of stock picking, and I did well with that. The client either asks for overall portfolio management, where I can adjust exposure, or else sees my program as his/her long exposure. The client decides whether to commit more funds or to pull back.

In my preview for 2009 I tried to encourage investors who had no positions -- those who had been scared out of the market -- to do some reallocation of assets.

That was good advice. My regular clients, quite obviously, did much better.

Thanks for highlighting a key distinction.

Jeff


On Aug 29 08:14 AM U Dontknow Jack wrote:

> The really good returns were made by those people that didn't commit
> just 1/3 to equities when the prices were unbelievably cheap in Feb
> - March.
>
> If you couldn't buy then, at those prices, you just didn't know what
> you were looking at.

Drop in Growth Stocks is A Gift

Jon - I saw the same piece. It made sense to me, especially the comparison with August. One cannot always figure out the reasons for "forced selling" but the pattern of stocks sold is often apparent.

Thanks again,
Jeff