Forum Archive Index - November 2000

["David Reid" <aspex@ix.net.nz>]

I have my own copy of "Beyond the Zulu Principle" which deals with growth shares and takes the PEG much further.

Remember that a PEG is useful only when it can be applied to the future.

Use PEGs only as a filter to find the universe of shares that qualify and then use in conjunction with suitable PE, cash flow gearing relative strength to market and competitive advantage.

 

For Brian B. Unfortunately, FRU has no history to start the analysis on PEGs but I would suggest that if all is what it seems and its prospective growth exceeds 25% per year for at least the next two years and that it is so far a small player in its target market it is possible to accept a prospective PE of 30+. I would prefer the PE to be below 20 and the growth rate to be 30% (PEG 0.67).

 

The reference is a bit old now and I am not recommending the newsletter but have aquick look at:

http://www.global-investor.com/slater/newsle.htm

There is a new book "How to become a Millionaire" co written with Tom Stevenson which I have not read yet, but I believe it ranges through all of the major investment methods.

David Reid