Price Variant

We occasionally get a question about how the Price Variant in The Stock Investment Guide is calculated, which is one of the low price calculations on the Analysis Tab of the Stock Investment Guide.

Price Variant = 52 Week High Price * (Sum of 5 annual low prices)/(Sum of 5 annual high prices)

The annual low and high prices for the last five years are in the Price and Earnings History table on the Analysis tab.

They Price Variant was originally published in an issue of NAIC BITS magazine in 1994 in an article by Gayle Olsen. He stated:

“I wrote about 40 articles for BITS when it was a print publication, and I’m the inventor/author of the Price Variant Quotient (first published in BITS in 1994). Inspiration for the PVQ came from a conversation I had with Ken Janke when he was in Minneapolis for a Better­Investing event. When he mentioned that the ­average stock price varies about 50 percent from high to low in any given 52-week period, it occurred to me that if you calculated the average variation for 52 weeks and subtracted that percentage from the most recent 52-week high, you’d have another possible low price choice based on actual trading history.”

This calculation provides you an additional low price calculation to consider. Typically, the Price Variant will be more aggressive than the other low price calculations.

Remember, your selection of a low price should consider what can happen to the stock price in a bear market. Your selected low price will have a significant impact on the Up/Down ratio.

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