http://www.bivio.com/irw/files/Public%20Files/ToolKit4/TK4Portfolio.xls

I made the following changes today to the PERT-A Graph on the PERT-A sheet —

I replaced the "% PTP on Sales" line with a "Margins % Change" line.

The graph now automatically adjusts for each stock to include exactly the amount of data that's present (instead of showing a fixed amount of data for each stock regardless of how much data is actually present).

Is there somewhere on the spreadsheet that gives a version number or a date or something?

Nope.  I'll add something next time I update it.

So let's say I have a stock that has had a profit margin of 32% for the entire history of the graph. IOW it has not changed for the entire time period.

In the old spreadsheet or in the PERT A graph this would have been a flat line at 32% whereas in the new spreadsheet it would be a flat line at 0%?

This new addition also makes the 40% to 32% vs 4.0% to 3.2% appear the same?

Correct.  The new "Margin % Change" line now shows you how much margins are changing.  The numerical values for % PTP on Sales are still there (to the left of the graph) if you want to see the level of margins.  It also makes the same percentage change look the same, regardless of the level of margins (a change in margins from 40% to 32% will look the same as a change from 4% to 3.2%).

In the sample data that comes with the spreadsheet, LOW and HDI are good examples of what the new Margin line shows you.

Will you please take a look at BBBY on your graph vs the PERT-A graph and give us a little lesson in why you prefer one over the other?  Another one might be Lincare.  Maybe a better question is how does what we learn from one differ from what we learn from the other.  Thanks.

OK, I'm comparing the PERT-A graph in my spreadsheet with the one in Toolkit v5.

Both versions tell you the same thing.  I think my version makes what's important easier to see in certain cases.  I think my version helps more for LNCR that it does for BBBY.

For LNCR, I think my PERT-A graph makes it easier to see that PTP margins increased faster during FY 2002 than before or since.  That's what the "hump" is in the black line.  The same thing is evident because of the hump in the PTP line, relative to the Sales line, but the Margin line on my graph makes it explicit.  There is a bit of hump in the "% PTP of Sales" line in the TK5 PERT-A chart, but I think it's pretty subtle.

For BBBY, I think the same sort of think is easier to see on my version of PERT-A graph.  It's certainly no harder to see.

Jim,

>>The Info sheet automatically shows the date of the most recent Value Line report for the stocks you've entered there<<

Very helpful.

>>and highlights the date of the report you used if it's not the most recent.<<

How does it know?

Also....... I can't seem to refresh the industries on the info page.  I tried to bring up www.better-investing.org/articles/web/4626 Is that because of Mark's suspension?  I assume columns H-K on the info sheet are based on that document.  Correct?

>>The Diversification sheet has a suggested minimum sales growth rate column (based on the size of company sales). <<

Hmmm.  That's pretty cool.  So if NAIC suggests 7-15% for a medium sized company, it looks as if you graduated those ranges proportionately to the trailing sales of our companies.  Is that correct?  So Kimco is a medium sized company with trailing sales of 646.3 million as is BBBY with 4685 million.  According to your spreadsheet, Kimco would require sales growth of 14.7% where as BBBY, a much larger medium-sized company, would require only 7.9%.  Makes sense to me.  You just never stop thinking out of the box, Jim.  This is great.

Nancy Isaacs
NAIC Forum - Long term investing made simple
(Click on the Forum name to visit us)

Jim,

>>For LNCR, I think my PERT-A graph makes it easier to see that PTP margins increased faster during FY 2002 than before or since.  That's what the "hump" is in the black line.  The same thing is evident because of the hump in the PTP line, relative to the Sales line, but the Margin line on my graph makes it explicit.  There is a bit of hump in the "% PTP of Sales" line in the TK5 PERT-A chart, but I think it's pretty subtle.<<

For me, the TK5 approach is more helpful.  What interests me is that margins have been consistently improving since March '01 from 26.7 to 27.1 to 27.4 to 28.1 to 29.5 to 30.2 to 31.4 to 31.8 to 31.8 to 31.9 to 32.1 to 32.4 to 32.6 to 33.2.  That's pretty impressive.  The TK5 graph shows that very clearly. 

Yours shows that the rate of increase is slowing.  That's significant too.  Maybe both lines should be visible in TKportolio.xls.  Could there be a toggle capability?  Normally, I wouldn't ask, but then when you're Jim Thomas, anything is possible <g>.

Nancy Isaacs
NAIC Forum - Long term investing made simple
(Click on the Forum name to visit us)

>>and highlights the date of the report you used if it's not the most recent.<<

How does it know?

One of the data items you're supposed to enter (col G) is the date of the Value Line report you used to get the data in cols H-K.

Also....... I can't seem to refresh the industries on the info page.  I tried to bring up www.better-investing.org/articles/web/4626 Is that because of Mark's suspension? 

That is one of several BI web pages produced, presumably, by Mark that have gone away.  I'll leave speculation about cause and effect to your imagination.

I assume columns H-K on the info sheet are based on that document.  Correct?

No.  Cols L-N come from the web page you mention above.  Cols H-K come from Value Line and you need to enter them by hand (that's why they're shaded light-blue). 

>>The Diversification sheet has a suggested minimum sales growth rate column (based on the size of company sales). <<

Hmmm.  That's pretty cool.  So if NAIC suggests 7-15% for a medium sized company, it looks as if you graduated those ranges proportionately to the trailing sales of our companies.  Is that correct? 

Correct.  It's an idea I picked up from one of the NAIC chapter web sites (right at the moment, I'm drawing a blank as to which one).

For me, the TK5 approach is more helpful. 

For high margin companies I don't think one way is any more helpful than the other.  Certainly, the TK5 way is more familiar. 

However, I don't like the fact that the traditional graph is showing rate of change for Sales, PTP, and EPS but not for Margins.  The rules for understanding the first three lines are different than the rules for understanding the Margins line.  My version is showing rate of change for all four, so all four lines are interpreted using the same rules.

What interests me is that margins have been consistently improving since March '01 from 26.7 to 27.1 to 27.4 to 28.1 to 29.5 to 30.2 to 31.4 to 31.8 to 31.8 to 31.9 to 32.1 to 32.4 to 32.6 to 33.2.  That's pretty impressive.  The TK5 graph shows that very clearly. 

It is impressive.  I believe increasing from 2.7% to 3.3% (in another industry) would equally impressive.  The purpose of my version of PERT-A Graph is to make the improvement look equally impressive in both cases.

I agree that for LNCR it's pretty clear on the TK5 PERT-A Graph that margins improved more in the past than more recently.  I don't think you can readily tell from that graph that the historical improvement was three times faster than more recently.  And, once you've understood what the Margins line is telling you, you need to shift your thinking to understand the Sales, PTP, or EPS lines.

Yours shows that the rate of increase is slowing.  That's significant too. 

Maybe both lines should be visible in TKportolio.xls.  Could there be a toggle capability?  Normally, I wouldn't ask, but then when you're Jim Thomas, anything is possible <g>.

Pretty much anything is possible.  But, that sheet is getting pretty cluttered already.

>>The Diversification sheet has a suggested minimum sales growth rate column (based on the size of company sales). <<

> It's an idea I picked up from one of the NAIC chapter web sites (right at the moment, I'm drawing a blank as to which one).

BTW ... Here's where I came across that idea.  http://www.naicspace.org in their Prospector Tips section (#6, User Defined Function).

Valsa,

TK4Portfolio.xls is, in large part, my spreadsheet interpretation of the Portfolio Management approach discussed at http://old.better-investing.org/educate/portmgt/pm1.html.  That series of web pages (and the Toolkit manual) should answer basic questions about the defensive/offensive concepts.

The spreadsheet has not been discussed here before (other than the 19 messages in this thread).  Feel free to use this thread for questions about the spreadsheet.

The defensive/offensive concepts have been discussed here a bit.  Those threads might be a more appropriate place for conceptual questions that don't relate to my spreadsheet.  See Defensive Selling and Offensive Selling in the Selling Decisions section.