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Author: Garbagecop Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 7258  
Subject: Re: Young Companies and the SSG Date: 5/15/2001 9:31 AM
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"...How does one complete an SSG without the years of data?...Also, trying to complete an SSG without the long years of data distorts the numbers considerably..."

You can complete an SSG with as little as one year's worth of data--not that you'll get a meaningful look at the company.

The point is, you need to pick an investing philosophy and stick with it. If you choose the NAIC method, what you are agreeing to is that a company needs at least 5 years worth of finanancial data, not only to determine a pattern of sales growth, but to also see if management is in control of the company by producing steady pre-tax profits and earnings growth.

Even the greats--Peter Lynch, Warren Buffett--strictly adhere to the criteria they have deemed important. You should too. Anything less than five years' history, and you are getting into speculative investing.

I remember an article in BI that quoted George Nicholson saying, "if a stock is THAT good today, it'll be THAT good in a year from now." Reading financial statements is hard enough for the typical investment clubber. I'd let the younger companies prove their muster. Go after companies that can produce a "complete" SSG.

Lynn from Minneapolis
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