Purpose The Portfolio Management Guide (PMG) is BetterInvesting's form for following purchase recommendations. You can see an example of PMG by clicking here. It was originally intended to aid in purchase decision, but with the computerization, the results are automatically applied to all of the BetterInvesting forms. One use of the form can be to study the Price movements in conjunction with the fundamental monitor, PERT Worksheet A. The PMG Form Each stock in the portfolio will have one of these double sided forms. Front Page The front page's function is to record monthly prices, price zones and quarterly EPS data and produce the required calculations for the back page. With the current computer generated version and the advent of OPS (online data from BetterInvesting) the maintaince of this form has been automated. I believe the latest price zone is derived from the current SSG and the historical zones are estimated by the computer rather than actually being recorded over time. The front page generates most of the data and it is then plotted on the back. Back Page The back page is a graphic representation of the P/E and Price movements for the past several years on a monthly basis. Price is labeled on the left and P/E is labeled on the right side of the graph. The graph is divided by heavy lines into years and then into quarters by 4 lighter lines within each year. The twelve months are listed across the bottom as are the corresponding years. Solid color bars represent the high and low price for each year and dotted bars represent the average P/E and 1.5 times the average P/E for each year. The values for price and P/E are then plotted each month on the graph for a dynamic picture of where the price is and has been within the buy - hold - sell zones and where the P/E lies within its three zones - more than 1.5 times the average P/E, Less than the average P/E, or between these two values. On the computer version the projected realtive value is also graphically displayed just above the bottom of the graph.
CommentsComment on this Page Last Modified 2005-07-20 |
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Unless the zoning is based on the 25 percent, 50 percent and 25 percent method the highest price in the lower zone ( assuming a 1/3, 1/3,1/3) method willl always be an US/DS ratio of 2 to 1 not 3 to 1 which is required for the SSG to suggest a safe purchase. Therefore be wary of accepting the lower zone using the 1/3,1/3,1/3 zoning as a "buy zone". It is not!
Ralph Seger