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Instead of P/BV only and P/E and Debt/Own capital, and other ratios like that could someone use instead:

  1. VAR/IVAR/TVAR ?
  2. Free Cash Flow
  3. Trend of Moving Average of Closing prices

in his arsenal? Simultaneously?

  • 2
    I didn't downvote this, but I think it would be a better question if there was, well, more of a question. What do you want to know? Of course you can consider the phase of the moon, and doubtless there are people who do. – poolie Dec 6 '10 at 22:22
  • I am positive it wasnot you poolie! I believe someone else did downvote and didn't spent time to criticize. In any case, it isn't a far clear question. This specific three things I am building them in matlab, but now I am turning probably to scilab or scipy, and wanted to acquire more feedback. If as theory can have a chance! – hephestos Dec 7 '10 at 11:22
  • Maybe this would be a better question in the Quantitative Finance site – Paul Mar 27 '11 at 9:24
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Yes, I'm sure there are people who do look at these. Some of them probably make a profit on it too: amongst all the companies on the market undoubtedly at least some of the time they will correlate with buy/sell opportunities. I don't know of a reason why they would be good indicators in general though.

VAR is an absolute number. I guess you would divide it by total assets? It would give you some kind of rough measure of how aggressively their capital is deployed, perhaps? I don't know if it would be very reliable.

  • VAR as far as I understand, is a way to minimize portfolio risk. And the rest two seem to me way to pick up points of interest in time per stock. But really, why I have a feeling this is just a wild imagination? – hephestos Nov 30 '10 at 22:23
  • Oh, you mean the VAR of the whole portfolio? You could measure that, and it would give you some prediction of the volatility of the portfolio. But the last few years have shown that what most investors should really be worried about is the times when things go outside of the 95% bounds, and VAR makes no prediction of what happens then. – poolie Nov 30 '10 at 22:29
  • Exactly! that is where I thought of then, if it can stand the factorial of the moving average. marginal outcome of a price change in respect of the average price... – hephestos Nov 30 '10 at 23:38
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    Could some of the people voted "minus" explain why ? – hephestos Dec 6 '10 at 13:19

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