Since bank stocks are held to different standards in other
areas (such as debt ratios), would they be held also to
different standards regarding their Relative Value?

> Since bank stocks are held to different standards in other
> areas (such as debt ratios), would they be held also to
> different standards regarding their Relative Value?

Hi Debbie,

There shouldn't be a different standard here. Relative Value, as defined by
NAIC, is a stock's current P/E as compared to its 5-year average P/E.
History shows that while stocks tend to fluctuate, they always seems to come
back there signature P/E.

Therefore, a low Relative Value suggests that investors are not excited
about a company's prospects, as compared to the past. Likewise, a high
Relative Value suggests that investors are so positive about a stock's
future prospects that they are willing to pay more than normal.

Today, I have a Pert report that show nearly every stock I own below a
Relative Value of 80. I'm less concerned since MOST stocks are in the same
situation. It's an obvious example of what happens in a recession.
However, it does make it harder to sift through the carnage and determine
which ones are going to be able to withstand this turmoil.

This is definitely a learning experience for us all.

Lynn Ostrem, Minneapolis
garbagecop@foxinternet.net