CPWM

**vik589** Tue Aug 22, 2006 7:58 pm

CPWM
Hi Blast
I am looking at this stock and trying to apply the "average earning" over 1 bussiness cycle approach to see if this is infact a low PE stock. If I look at its stock price over the past 10 years it has lots of sharp and sudden ups and downs. I am not sure how to isolate 1 bussiness cyle just by looking at the chart. In the "average earning" approach is it neccessary to isolate 1 bussiness cycle or will also work if i just look at the average earning over the past 10 years without caring about bussiness cycle ie (Bust-->Boom-->Bust). Thanks

**blast_investor** Wed Aug 23, 2006 9:30 pm

Re: CPWM
Hi vik589,

This is going to be subjective. I usually just eyeball the earning history and identify the boom and bust roughly.

If you add 2 bust period and only 1 boom period, your average number would be too low due to overweighting in the bust period.

Sometimes you might want to do averaging earning for first 5 years, then average another number for recent 5 years.

vik589 wrote: Hi Blast
I am looking at this stock and trying to apply the "average earning" over 1 bussiness cycle approach to see if this is infact a low PE stock. If I look at its stock price over the past 10 years it has lots of sharp and sudden ups and downs. I am not sure how to isolate 1 bussiness cyle just by looking at the chart. In the "average earning" approach is it neccessary to isolate 1 bussiness cycle or will also work if i just look at the average earning over the past 10 years without caring about bussiness cycle ie (Bust-->Boom-->Bust). Thanks