Introduction to the Pert

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Introduction to the Pert

• Maintaining Your Portfolio

Presented by Lynn Ostrem, VP Crow River
Investment Club www.bivio.com/crowriver
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The Rule of Five
No matter how diligent and conservative you may
be in using the NAIC principles to evaluate your
stocks
One will exceed your expectations
Three will perform about as you had
expected
One will probably sink out of sight
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Portfolio Management Tools

• Pert Report
• Trend Report
• Summary Report
• Pert A Worksheet Graphs
• Pert B Worksheet Graphs
• Portfolio Management Guide
• Challenge Tree

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How to Get Started

• Update Prices
• with just a click!
• Update Companies
• Last month, we reviewed updating companies.
  Either refer to that presentation or click on
  FileUpdate Companies in Toolkit. If you use
  OPS, it updates them automatically.

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How to Get Started

• Review your judgments
• based on any news or information you have
  gathered.

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Pert Defensive Elements (Portfolio Evaluation
and Review Technique)
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Pert Defensive Elements Use the Estimated
Earnings for Comparison
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Pert Defensive Elements Sales should be the
most stable.
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Pert Defensive Elements Pre-Tax Profit is next
important
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Pert Defensive Elements Finally, look at
earnings
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Analyzing Problems(see notes)
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The Value Side
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Caution...
The worse a company performs
... the better the value will
look.

• Sales, EPS, PTP and Trailing 4 Qtrs measure
  quality.
• Change your expectations in the Stock Selection
  Guide whenever performance falters.
• People will not pay much for it, P/E will go
  down, Upside/Downside Ratio will go up, and
  Relative Value will look better.

It will look great if you dont lower your
expectations!
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When to Sell

• NAIC saysNEVER SELL . . . unless the company
• Has had an adverse management change.
• Has declining profit margins.
• Has had a deteriorating corporate financial
  condition.
• Has been beset by effective competition.
• Has relied on a single product that is becoming
  obsolete.
• Has changed for the worse due to economic
  conditions.
• Has proven to be cyclical.
• Has upset the balance by company size in your
  portfolio.

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COLORS ON THE PERT
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The Portfolio Trend Report
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Using PERT Worksheet - A
9 yrs of quarterly Sales, Pre-tax Profit, and
Earnings
Trailing 4 Quarters
Makes it easy to see quarterly trends.
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PERT Worksheet A Graphs
Graphs

• Sales
• Earnings
• Pre-tax Profit
• Pre-tax Profit on Sales

by

• Trailing 4 Quarters

• Quarterly

With various growth lines for comparison.
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Portfolio Summary Report
Shopping List with Buy and Sell
recommendations. Use 25 / 50 / 25 Zoning!
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QUESTIONS?

• Next months assignment
• Read the Portfolio Management Workshop
• Import our stocks into your Toolkit
• Update prices companies next month
• Bring the Pert Report to the meeting

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• This best way to review this presentation is by
  printing the Notes option