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Welcome. This thread is for the discussion of Value Line's Stock (ticker VALU) as well as the Value Line Investment Survey and its various screens, indicators and estimates. Discussion on investments based on Value Line's screens, recommendations, etc. are also welcome. Direct investment in Value Line's recommendations has been difficult in the past, but several new Exchange Traded Funds have come to market in recent years to offer the investor nearly direct access. PIV, PYH and FVL are examples. (Discussion of PYH here: Subject 57381 ) The information is valuable the way it's presented by them but is also useful when combined with data from other sources. One which we've been monitoring is Value Line's "Appreciation Potential." We've taken the value and modified it slightly and compared it to the market's various indexes. The result is what we're calling the ValuWave: Good correlation can be seen between the movement of the indexes and the ValuWave Cash Indicator. We use this to get a feel for what our overall Equity/Cash ratio should be compared to how Value Line's Appreciation Potential perceives overall market risk. High cash suggestions should correspond to high risk markets. In spot checks going back to 1987 we find it has been very good at calling market conditions. The "zero cash" point is derived from the VLAP's highest reading in December of 1974. It peaked at +234% potential appreciation that year. So, assuming we never see that much potential again, our v-Wave won't recommend a cash reserve below zero. Here's another indicator using Value Line weekly data. This one subtracts Value Line's "Median Dividend Yield" from the 13 Week U.S. Treasury Rate to come up with a relative risk evaluation for stocks vs short term treasuries. (see Post Message 25488296 for more details) Here's the latest 3+ years: Generally, anything deeply below Zero is very bullish and anything well above 2 would be rather bearish it appears. Please feel free to make other suggestions for indicators based upon Value Line's various regular features. Best regards, Tom Veale | ||||||||||||||
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