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Hi Genevieve,

While I can't speak for everyone, I can tell you how I use it:

I like to see the relationship of the stock price to the company's earnings. If I see that the stock price has started a trip to the moon, but FCF (or earnings or revenues, if FCF isn't available) is maintaining a more modest trajectory, then this would lead me to consider that the stock price increase is unwarranted. Conversely, if the stock price is dropping, or even doing the "Walmart Shuffle" sideways, while FCF is increasing nicely, this would lead me to think that this company is not being rewarded yet for it's accomplishment. The earnings, or FCF, is like a report card that can be used to judge how objectively the market is responding to a particular stock.

This is why people turn on the "Rolling EPS" indicator on BigCharts, and why Sheridan's spreadsheet is so nice to have.

I just can't say enough how impressed I am with your FIL for taking you guys to the conference. And judging from the fact that you are posting questions and following up with what you learned there, I'd have to say he has a pretty good eye for value. I've always tried to tell my kids that the key to aquiring wealth is to live below your means, so that you can save some money to invest. That's something I knew but was not eloquent enough to put into words until I started hanging out on the TMF boards.

Hope this helps - $$$
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