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Author: jackcrow Big gold star, 5000 posts Feste Award Nominee! Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1670  
Subject: Re: PEG Ratio Article from Forbes Date: 2/18/2011 10:20 AM
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Reread the article and focus on what he saying about PEG, he is spot on. The further you get from p/e 8, growth of 8% = 1 the less accurate PEG becomes. PEG has three moving parts, price the market's current vote, earnings(an accounting term, not cash) and a growth estimate.

Apple may still be a good investment but PEG is only one teeny tiny little data point to consider. The real argument for or against APPL is return on retained earnings. APPL is huge and it is much harder to get bigger from huge than from merely large. PEG completely ignores that complexity. The other flaw that he points out is that there is no consideration for the time value of money within PEG.

good article about the flaws of PEG really.

jack
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