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sean  
#1 Posted : Friday, September 16, 2011 7:10:19 AM(UTC)
sean

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If you've been using Toolkit for a while, or ever had the chance to see Ellis give a demo, you probably have these jotted down somewhere already. For those new to the program, or who haven't been passed the note already, here are a few unlisted keyboard combo specials in Toolkit.

Alt – S
Establishes sustained growth
Multiplies the reciprocal of the Av. % Payout by the 5-year Av. Return on Equity using starting equity.

Alt – C
Calculates the “Rational Price” Divides the current price by the Relative Value.

Ctrl - Alt - E --OR-- Ctrl - Alt - J
Judgments: Both of these key combinations will quickly fill in a stock study with some basic judgments applied.

Alt - I (Only in Toolkit 6)
Brings up the First impression screen. When used with StockCentral data, the First Impression will also give a quality rating.

 

With those in mind, and particularly regarding the calculated judgments, I would be remiss in not including the following, rather long, caveat.

The fact that using automatic judgments can lead to issues such as the buy price being higher than the sell price on the back of the ssg is a function of how the formulas that Toolkit uses are set up. If the quality rating on a company is very low when the First impression comes up, one of the effects of continuing with the default judgment can be the Buy price showing up higher than the Sell price on the back of the ssg form, or on the Stock Management guide. At least for the moment, we're not expecting to make a change to the formulas that Toolkit's using. The reasoning is that if you're using one of the automatic judgments or the First Impression, and a stock comes up with a very low score, or questionable predictions, you would do one of a few things:

  • If you're a beginner, Close the company, and move on; there are better stocks out there.
  • If you're intermediate, let Toolkit fill in the ssg, but take extra care examining the front and back of the stock study for irregularities, and be prepared to over-ride some or all of the default judgments.
  • If you're advanced, skip the initial judgment, and enter your own from start to finish.


If you get a low initial judgment and continue on, you'll likely also notice some of the following:

  • On the front page of the stock study, future growth rates will be at 2, or lower.
  • Sales, profits and earnings will be uneven (or trending down) for the last few years.
  • In section 2 on the back, it's likely that Pre-tax Profit, Return on Equity (or both) will be trending down, or Even at best.
  • Section 3 may look normal, but you're likely to see a Reward/Risk figure of less than 1 to 1 in section 4

These are signs that some of the fundamentals are questionable. If the judgments at the start are coming up with these sort of warning signs, then it's likely that other reports working off of those judgments and that data, are also going to give questionable results.
This is not to say that there might not be some sort of a limiter in the future, to fill in a something like "NONE" or "Not Applicable" if the numbers are going to be upside down like that. For the time being however, it's a matter of recognizing those early warning signs and knowing to proceed with caution.

For more of an idea about what to look for, we suggest checking the SSG tutorial at:
http://www.iclub.com/investing/ssg_agree.asp
As well as the Toolkit 6 webinars:
http://www.iclub.com/clubs/webinar_information.asp

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