From: "Michael R. Jeffers" Subject: [CANSLIM] Hold On To High EPS Stocks? Date: 01 Dec 1996 22:04:56 PST Hey Group, A request for a bit of help. In the process of learning how to pick winners, I've bought more than a few losers. A lot of them I've sold off with losses as high as 50% and more. However I've noticed that on some of those I sold off a price rebound, usually right after I've sold. It's clear that when Rel Str drops the price is dropping as well. But if you've lost more than 20% of value, then wouldn't it be wise to just hold on as long as the EPS number holds above 80%? And since I'm asking for help, how about one more? I know that IBD says that reasonably high PE ratios should not hold one back from buying the stock. But the tightwad in me just doesn't want to pay premium. I believe that it would be better to find a stock that sells at a discount to it's own industry's group PE, and yet still have all (or most) other CANSLIM categories. With my belief that a significant correction is ahead just after the new year, this extra restriction makes me feel a bit more secure. Am I being too chicken? Thanks for reading this. Just Little 'Ole Me, Michael R. Jeffers ------------------------------------------------------------------------------- From: perinvm@ibm.net (Gui Meyer) Subject: Re: [CANSLIM] Hold On To High EPS Stocks? Date: 02 Dec 1996 10:14:48 GMT On Sun, 1 Dec 96 22:04:56 PST, Michael R. Jeffers wrote: > And since I'm asking for help, how about one more? I know that = IBD >says that reasonably high PE ratios should not hold one back from buying= the >stock. But the tightwad in me just doesn't want to pay premium. I = believe >that it would be better to find a stock that sells at a discount to it's= own >industry's group PE, and yet still have all (or most) other CANSLIM >categories.=20 Quoting David Ryan, one of O'Neils successful followers: " O'Neil says P/E ratio is not important. I think it is, in that your success ratio is a lot higher on lower P/E ratio stocks. When I'm talking about lower P/E ratio stocks, I mean stocks that have a P/E ratio that is between even and up to two times the S&P500 P/E ratio." (Market Wizards p.250) > With my belief that a significant correction is ahead just >after the new year, this extra restriction makes me feel a bit more = secure. >Am I being too chicken? I wouldn't say so. Gui ------------------------------------------------------------------------------- From: jeff@scrooge.idec.sdl.usu.edu (Jeff Salisbury) Subject: [CANSLIM] Test - Xmission has been down Date: 03 Dec 1996 08:27:50 -0600 Everyone, Please excuse this intrusion. My ISP, Xmission, had a power outage yesterday and since the list has been quiet since that time, I wanted to test the list. Regards, Jeff Salisbury - canslim list admin ------------------------------------------------------------------------------- From: Craig Griffin Subject: Re: [CANSLIM] Hold On To High EPS Stocks? Date: 03 Dec 1996 15:33:54 GMT This is a resend of a message that may not have made it through. If your received previously please excuse the re-post. Michael, At 10:04 PM 12/1/96 PST, you wrote: >snip > > ... >says that reasonably high PE ratios should not hold one back from buying the >stock. But the tightwad in me just doesn't want to pay premium. ... I used to feel the same way. Always wanted to find a bargain. O'Neil says that like in any merchandise environment, the highest quality goods often carry a premium price (sometimes junk also carry's a premium price, but we will not be selecting junk because we only buy stocks with Current Earnings). The leaders are usually priced too high and stay that way. Cisco Systems carried a PE of around 80+ for years (best I can recall) for years in its early growth phase. If you waited for the pe to look cheap (ie. for it to sell for less than it's projected growth rate), you would have missed a 10 bagger. All other things being equal, I love a bargain (IE. low PE or low PE to growth rate stock), but unless the stock is really under followed, there is usually a reason for this discounting. And that reason, whatever it is, will keep the stock from performing as well as its higher pe counterpart that is leading the group. The bottom line is that CANSLIM techniques lead one to try to buy the leading (first or second) stock in a group. But always on a valid breakout and always with good stops in place. However, there is no restriction against buying the 5th or 6th stock in a group (based on RS), but you have to go in with your eyes wide open and realize that they tend to be more failure prone and lower quality. Nothing in this business is an absolute. Everything in CANSLIM is simply aimed at putting the odds maximally in your favor. There will be stocks that will come up from the ranks to lead, it happens all the time. And the leaders eventually falter, every one of them hit the limits to growth (like Walmart did a few years back) unless a competitive threat gets them first. But the odds are with the leaders. So, I would say that the business of selecting the lower PE stocks could be defined as attempting to identify the new leaders early. With that in mind, one should be looking for the stocks with 100%+ qtr to qtr comparisons, and other strong CANSLIM characteristics with exciting New products or markets. In this way you can help to offset your increased risk of dipping down into the lower ranks. Best regards, Craig > > ------------------------------------------------------------------------------- From: postmaster@oscim1.odc.swr.irs.gov Subject: [CANSLIM] smtp mail failed Date: 03 Dec 1996 09:11:41 -0500 Your mail to sdesw14 is undeliverable. ---------- diagnosis ---------- <<< 554 ... Mail loop detected ---------- unsent mail ---------- From xmission.com!canslim Tue Dec 3 09:11:37 1996 remote from oscim1 Received: from xmission.com by oscim1.odc.swr.irs.gov; Received: from oscim1.odc.swr.irs.gov by sdesw14.cps.odc.swr.irs.gov (5.x/SMI-SVR4) id AA18818; Tue, 3 Dec 1996 09:01:06 -0700 Received: from xmission.com by oscim1.odc.swr.irs.gov; Received: from x400hub.net.treas.gov ([10.7.14.10]) by sdesw14.cps.odc.swr.irs.gov (5.x/SMI-SVR4) id AA18815; Tue, 3 Dec 1996 09:01:01 -0700 Received: from tcs_gateway1.treas.gov by x400hub.net.treas.gov (SMI-8.6/Infonet/TRW1) id KAA28122; Tue, 3 Dec 1996 10:59:12 -0500 Received: from kdcol.kdcol.com by tcs_gateway1.treas.gov with SMTP id AA17956 (InterLock SMTP Gateway 3.0 for ); Tue, 3 Dec 1996 10:49:56 -0500 Received: from mail.xmission.com (daemon@mail.xmission.com [198.60.22.22]) by kdcol.kdcol.com (8.6.12/8.6.10) with ESMTP id IAA14478 for ; Tue, 3 Dec 1996 08:59:05 -0700 Received: (from daemon@localhost) by mail.xmission.com (8.8.3/8.7.5) id IAA15810 for canslim-goout; Tue, 3 Dec 1996 08:27:57 -0700 (MST) Received: from scrooge (scrooge.idec.sdl.usu.edu [129.123.180.19]) by mail.xmission.com (8.8.3/8.7.5) with SMTP id IAB15798 for ; Tue, 3 Dec 1996 08:27:52 -0700 (MST) Received: by scrooge (950215.SGI.8.6.10/930416.SGI) for canslim@xmission.com id IAA01605; Tue, 3 Dec 1996 08:27:51 -0700 Received: from tcs_gateway1.treas.gov by x400hub.net.treas.gov (SMI-8.6/Infonet/TRW1) id KAA28122; Tue, 3 Dec 1996 10:59:12 -0500 Received: from kdcol.kdcol.com by tcs_gateway1.treas.gov with SMTP id AA17956 (InterLock SMTP Gateway 3.0 for ); Tue, 3 Dec 1996 10:49:56 -0500 Received: from mail.xmission.com (daemon@mail.xmission.com [198.60.22.22]) by kdcol.kdcol.com (8.6.12/8.6.10) with ESMTP id IAA14478 for ; Tue, 3 Dec 1996 08:59:05 -0700 Received: (from daemon@localhost) by mail.xmission.com (8.8.3/8.7.5) id IAA15810 for canslim-goout; Tue, 3 Dec 1996 08:27:57 -0700 (MST) Received: from scrooge (scrooge.idec.sdl.usu.edu [129.123.180.19]) by mail.xmission.com (8.8.3/8.7.5) with SMTP id IAB15798 for ; Tue, 3 Dec 1996 08:27:52 -0700 (MST) Received: by scrooge (950215.SGI.8.6.10/930416.SGI) for canslim@xmission.com id IAA01605; Tue, 3 Dec 1996 08:27:51 -0700 Received: from xmission.com by oscim1.odc.swr.irs.gov; Received: from x400hub.net.treas.gov ([10.7.14.10]) by sdesw14.cps.odc.swr.irs.gov (5.x/SMI-SVR4) id AA18815; Tue, 3 Dec 1996 09:01:01 -0700 Received: from tcs_gateway1.treas.gov by x400hub.net.treas.gov (SMI-8.6/Infonet/TRW1) id KAA28122; Tue, 3 Dec 1996 10:59:12 -0500 Received: from kdcol.kdcol.com by tcs_gateway1.treas.gov with SMTP id AA17956 (InterLock SMTP Gateway 3.0 for ); Tue, 3 Dec 1996 10:49:56 -0500 Received: from mail.xmission.com (daemon@mail.xmission.com [198.60.22.22]) by kdcol.kdcol.com (8.6.12/8.6.10) with ESMTP id IAA14478 for ; Tue, 3 Dec 1996 08:59:05 -0700 Received: (from daemon@localhost) by mail.xmission.com (8.8.3/8.7.5) id IAA15810 for canslim-goout; Tue, 3 Dec 1996 08:27:57 -0700 (MST) Received: from scrooge (scrooge.idec.sdl.usu.edu [129.123.180.19]) by mail.xmission.com (8.8.3/8.7.5) with SMTP id IAB15798 for ; Tue, 3 Dec 1996 08:27:52 -0700 (MST) Received: by scrooge (950215.SGI.8.6.10/930416.SGI) for canslim@xmission.com id IAA01605; Tue, 3 Dec 1996 08:27:51 -0700 Received: from tcs_gateway1.treas.gov by x400hub.net.treas.gov (SMI-8.6/Infonet/TRW1) ------------------------------------------------------------------------------- From: oab4@x400hub.net.treas.gov.treas.gov (Mail Delivery Subsystem) Subject: [CANSLIM] Returned mail: Unable to deliver mail Date: 03 Dec 1996 09:11:37 -0700 ----- Transcript of session follows ----- <<< HELO oscim1.odc.swr.irs.gov <<< MAIL FROM: <<< RCPT TO: <<< DATA 554 ... Mail loop detected 554 sendall: too many hops (30 max) ----- No message was collected ----- ------------------------------------------------------------------------------- From: postmaster@oscim1.odc.swr.irs.gov Subject: [CANSLIM] smtp mail failed Date: 03 Dec 1996 09:15:12 -0500 Your mail to sdesw14 is undeliverable. ---------- diagnosis ---------- <<< 554 ... Mail loop detected ---------- unsent mail ---------- From xmission.com!canslim Tue Dec 3 09:15:07 1996 remote from oscim1 Received: from xmission.com by oscim1.odc.swr.irs.gov; Received: from oscim1.odc.swr.irs.gov by sdesw14.cps.odc.swr.irs.gov (5.x/SMI-SVR4) id AA18831; Tue, 3 Dec 1996 09:04:37 -0700 Received: from xmission.com by oscim1.odc.swr.irs.gov; Received: from x400hub.net.treas.gov ([10.7.14.10]) by sdesw14.cps.odc.swr.irs.gov (5.x/SMI-SVR4) id AA18828; Tue, 3 Dec 1996 09:04:32 -0700 Received: from tcs_gateway1.treas.gov by x400hub.net.treas.gov (SMI-8.6/Infonet/TRW1) id LAA28279; Tue, 3 Dec 1996 11:02:43 -0500 Received: from kdcol.kdcol.com by tcs_gateway1.treas.gov with SMTP id AA18078 (InterLock SMTP Gateway 3.0 for ); Tue, 3 Dec 1996 10:53:30 -0500 Received: from mail.xmission.com (daemon@mail.xmission.com [198.60.22.22]) by kdcol.kdcol.com (8.6.12/8.6.10) with ESMTP id JAA15150 for ; Tue, 3 Dec 1996 09:02:39 -0700 Received: (from daemon@localhost) by mail.xmission.com (8.8.3/8.7.5) id IAA16678 for canslim-goout; Tue, 3 Dec 1996 08:34:10 -0700 (MST) Received: from mule0.mindspring.com (mule0.mindspring.com [204.180.128.166]) by mail.xmission.com (8.8.3/8.7.5) with ESMTP id IAA16654 for ; Tue, 3 Dec 1996 08:33:58 -0700 (MST) Received: from LOCALNAME (user-37kb9b7.dialup.mindspring.com [207.69.165.103]) by mule0.mindspring.com (8.8.2/8.7.3) with SMTP id PAA68474 for ; Tue, 3 Dec 1996 15:33:54 GMT Received: from tcs_gateway1.treas.gov by x400hub.net.treas.gov (SMI-8.6/Infonet/TRW1) id LAA28279; Tue, 3 Dec 1996 11:02:43 -0500 Received: from kdcol.kdcol.com by tcs_gateway1.treas.gov with SMTP id AA18078 (InterLock SMTP Gateway 3.0 for ); Tue, 3 Dec 1996 10:53:30 -0500 Received: from mail.xmission.com (daemon@mail.xmission.com [198.60.22.22]) by kdcol.kdcol.com (8.6.12/8.6.10) with ESMTP id JAA15150 for ; Tue, 3 Dec 1996 09:02:39 -0700 Received: (from daemon@localhost) by mail.xmission.com (8.8.3/8.7.5) id IAA16678 for canslim-goout; Tue, 3 Dec 1996 08:34:10 -0700 (MST) Received: from mule0.mindspring.com (mule0.mindspring.com [204.180.128.166]) by mail.xmission.com (8.8.3/8.7.5) with ESMTP id IAA16654 for ; Tue, 3 Dec 1996 08:33:58 -0700 (MST) Received: from LOCALNAME (user-37kb9b7.dialup.mindspring.com [207.69.165.103]) by mule0.mindspring.com (8.8.2/8.7.3) with SMTP id PAA68474 for ; Tue, 3 Dec 1996 15:33:54 GMT Received: from xmission.com by oscim1.odc.swr.irs.gov; Received: from x400hub.net.treas.gov ([10.7.14.10]) by sdesw14.cps.odc.swr.irs.gov (5.x/SMI-SVR4) id AA18828; Tue, 3 Dec 1996 09:04:32 -0700 Received: from tcs_gateway1.treas.gov by x400hub.net.treas.gov (SMI-8.6/Infonet/TRW1) id LAA28279; Tue, 3 Dec 1996 11:02:43 -0500 Received: from kdcol.kdcol.com by tcs_gateway1.treas.gov with SMTP id AA18078 (InterLock SMTP Gateway 3.0 for ); Tue, 3 Dec 1996 10:53:30 -0500 Received: from mail.xmission.com (daemon@mail.xmission.com [198.60.22.22]) by kdcol.kdcol.com (8.6.12/8.6.10) with ESMTP id JAA15150 for ; Tue, 3 Dec 1996 09:02:39 -0700 Received: (from daemon@localhost) by mail.xmission.com (8.8.3/8.7.5) id IAA16678 for canslim-goout; Tue, 3 Dec 1996 08:34:10 -0700 (MST) Received: from mule0.mindspring.com (mule0.mindspring.com [204.180.128.166]) by mail.xmission.com (8.8.3/8.7.5) with ESMTP id IAA16654 for ; Tue, 3 Dec 1996 08:33:58 -0700 (MST) Received: from LOCALNAME (user-37kb9b7.dialup.mindspring.com [207.69.165.103]) by mule0.mindspring.com (8.8.2/8.7.3) with SMTP id PAA68474 for ; Tue, 3 Dec 1996 15:33:54 GMT Received: from tcs_gateway1.treas.gov by x400hub.net.treas.gov (SMI-8.6/Infonet/TRW1) ------------------------------------------------------------------------------- From: oab4@x400hub.net.treas.gov.treas.gov (Mail Delivery Subsystem) Subject: [CANSLIM] Returned mail: Unable to deliver mail Date: 03 Dec 1996 09:15:07 -0700 ----- Transcript of session follows ----- <<< HELO oscim1.odc.swr.irs.gov <<< MAIL FROM: <<< RCPT TO: <<< DATA 554 ... Mail loop detected 554 sendall: too many hops (30 max) ----- No message was collected ----- ------------------------------------------------------------------------------- From: oab4@x400hub.net.treas.gov.treas.gov (Mail Delivery Subsystem) Subject: [CANSLIM] Returned mail: Unable to deliver mail Date: 03 Dec 1996 09:39:39 -0700 ----- Transcript of session follows ----- <<< HELO oscim1.odc.swr.irs.gov <<< MAIL FROM: <<< RCPT TO: <<< DATA 554 ... Mail loop detected 554 sendall: too many hops (30 max) ----- No message was collected ----- ------------------------------------------------------------------------------- From: postmaster@oscim1.odc.swr.irs.gov Subject: [CANSLIM] smtp mail failed Date: 03 Dec 1996 09:44:40 -0500 Your mail to sdesw14 is undeliverable. ---------- diagnosis ---------- <<< 554 ... Mail loop detected ---------- unsent mail ---------- From xmission.com!canslim Tue Dec 3 09:44:35 1996 remote from oscim1 Received: from xmission.com by oscim1.odc.swr.irs.gov; Received: from oscim1.odc.swr.irs.gov by sdesw14.cps.odc.swr.irs.gov (5.x/SMI-SVR4) id AA18893; Tue, 3 Dec 1996 09:34:05 -0700 Received: from xmission.com by oscim1.odc.swr.irs.gov; Received: from x400hub.net.treas.gov ([10.7.14.10]) by sdesw14.cps.odc.swr.irs.gov (5.x/SMI-SVR4) id AA18890; Tue, 3 Dec 1996 09:34:01 -0700 Received: from tcs_gateway1.treas.gov by x400hub.net.treas.gov (SMI-8.6/Infonet/TRW1) id LAA29749; Tue, 3 Dec 1996 11:32:12 -0500 Received: from kdcol.kdcol.com by tcs_gateway1.treas.gov with SMTP id AA19162 (InterLock SMTP Gateway 3.0 for ); Tue, 3 Dec 1996 11:22:48 -0500 Received: from mail.xmission.com (daemon@mail.xmission.com [198.60.22.22]) by kdcol.kdcol.com (8.6.12/8.6.10) with ESMTP id JAA18451 for ; Tue, 3 Dec 1996 09:30:52 -0700 Received: (from daemon@localhost) by mail.xmission.com (8.8.3/8.7.5) id JAA20294 for canslim-goout; Tue, 3 Dec 1996 09:03:06 -0700 (MST) Received: from tcs_gateway1.treas.gov (tcs_gateway1.treas.gov [204.151.245.2]) by mail.xmission.com (8.8.3/8.7.5) with SMTP id JAA20253 for ; Tue, 3 Dec 1996 09:02:55 -0700 (MST) Received: by tcs_gateway1.treas.gov id AA18086 (InterLock SMTP Gateway 3.0 for canslim@xmission.com); Tue, 3 Dec 1996 10:53:41 -0500 Received: by tcs_gateway1.treas.gov (Internal Mail Agent-3); Tue, 3 Dec 1996 10:53:41 -0500 Received: by tcs_gateway1.treas.gov (Internal Mail Agent-2); Tue, 3 Dec 1996 10:53:41 -0500 Received: by tcs_gateway1.treas.gov (Internal Mail Agent-1); Tue, 3 Dec 1996 10:53:41 -0500 Received: from tcs_gateway1.treas.gov by x400hub.net.treas.gov (SMI-8.6/Infonet/TRW1) id LAA29749; Tue, 3 Dec 1996 11:32:12 -0500 Received: from kdcol.kdcol.com by tcs_gateway1.treas.gov with SMTP id AA19162 (InterLock SMTP Gateway 3.0 for ); Tue, 3 Dec 1996 11:22:48 -0500 Received: from mail.xmission.com (daemon@mail.xmission.com [198.60.22.22]) by kdcol.kdcol.com (8.6.12/8.6.10) with ESMTP id JAA18451 for ; Tue, 3 Dec 1996 09:30:52 -0700 Received: (from daemon@localhost) by mail.xmission.com (8.8.3/8.7.5) id JAA20294 for canslim-goout; Tue, 3 Dec 1996 09:03:06 -0700 (MST) Received: from tcs_gateway1.treas.gov (tcs_gateway1.treas.gov [204.151.245.2]) by mail.xmission.com (8.8.3/8.7.5) with SMTP id JAA20253 for ; Tue, 3 Dec 1996 09:02:55 -0700 (MST) Received: by tcs_gateway1.treas.gov id AA18086 (InterLock SMTP Gateway 3.0 for canslim@xmission.com); Tue, 3 Dec 1996 10:53:41 -0500 Received: by tcs_gateway1.treas.gov (Internal Mail Agent-3); Tue, 3 Dec 1996 10:53:41 -0500 Received: by tcs_gateway1.treas.gov (Internal Mail Agent-2); Tue, 3 Dec 1996 10:53:41 -0500 Received: by tcs_gateway1.treas.gov (Internal Mail Agent-1); Tue, 3 Dec 1996 10:53:41 -0500 Received: from xmission.com by oscim1.odc.swr.irs.gov; Received: from x400hub.net.treas.gov ([10.7.14.10]) by sdesw14.cps.odc.swr.irs.gov (5.x/SMI-SVR4) id AA18890; Tue, 3 Dec 1996 09:34:01 -0700 ------------------------------------------------------------------------------- From: oab4@x400hub.net.treas.gov.treas.gov (Mail Delivery Subsystem) Subject: [CANSLIM] Returned mail: Unable to deliver mail Date: 03 Dec 1996 09:44:35 -0700 ----- Transcript of session follows ----- <<< HELO oscim1.odc.swr.irs.gov <<< MAIL FROM: <<< RCPT TO: <<< DATA 554 ... Mail loop detected 554 sendall: too many hops (30 max) ----- No message was collected ----- ------------------------------------------------------------------------------- From: Linda Thomas Subject: [CANSLIM] Pivot points Date: 03 Dec 1996 11:47:51 -0500 In my paper trading over the last couple of months, I've been looking = for canslim candidates just as they broke into new high ground with = higher than average volume. This has worked fairly well (on paper = anyway) but on re-reading O'Neil's book I came across the brief mention = of pivot points. So, I've been trying to identify the pivot points O'Neil writes about = but without much success. So I thought I'd put the following question = to the list: How do you identify a pivot point? And how reliable is = this identification? Inquiring minds want to know... -Linda ------------------------------------------------------------------------------- From: jeff@scrooge.idec.sdl.usu.edu (Jeff Salisbury) Subject: [CANSLIM] Sorry for the bounces Date: 03 Dec 1996 16:11:46 -0600 Fellow CANSLIM'rs, Sorry for the annoying bounced messages. It has been fixed and I think (hope with my fingers crossed) that we are back up and running. Best Regards, Jeff Salisbury - CANSLIM list admin ------------------------------------------------------------------------------- From: "David F. Cameron" Subject: [CANSLIM] 2 comments & a question Date: 04 Dec 1996 7:19:49 CST I've tried posting this already - so if you already have it I apologize, but I suspect it never got through... Comments: 1. Recently I noticed that some of the stocks being watched or recommended by group participants have been doing quite well. HDCO by Zoran was a highly publicized success that continued to climb on Monday. ANother, is CLFY, which I believe Johan mentioned as looking good about a week ago. Its up 10-15% from that time. Keep up the great work! 2. I actually met Zoran on Saturday. He's a great guy - and my impression is that he is smart and determined (OK, Zoran, bring your head back down to reality...) Anyway, he'll likely be a great help to us in the future. Question: Along the lines of comment #1, I'm curious to know whether most of you get your ideas via software selection, scanning IBD or what? Personally I tend to look in the section on stocks with the greatest rise in volume - and check several out by hand. But I seem to recall a few people saying they use Prodigy to "find" CANSLIM stocks? What do you do? Thanks, Dave Cameron dcameron@harper.cc.il.us ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: Re: [CANSLIM] 2 comments & a question Date: 04 Dec 1996 09:51:04 -0500 (EST) Dave wrote: [...] > 2. I actually met Zoran on Saturday. He's a great guy - > and my impression is that he is smart and determined (OK, > Zoran, bring your head back down to reality...) Anyway, > he'll likely be a great help to us in the future. Funny thing, at the same time Dave met me, I met him, too. Thanks for the nice words Dave. I really enjoyed the meeting and I can say all the same things about you. > Question: > > Along the lines of comment #1, I'm curious to know whether > most of you get your ideas via software selection, scanning > IBD or what? Personally I tend to look in the section on > stocks with the greatest rise in volume - and check several > out by hand. But I seem to recall a few people saying > they use Prodigy to "find" CANSLIM stocks? What do you do? Well, from the "Market Wizards" (a very dear present from a new friend), David Ryan first checks nicely based charts, then, RS, then EPS and the whole sequence after that. Since I don't have charts in front of me, I use the Nasdaq Stocks in the News charts, to simultaneously see a nice chart formation and check the EPS/RS/Dist. etc numbers. If I like everything, I go to my E*trade account and check the news on the stock (PRnewswire, Businesswire, Reuter, etc) and see how various news have influenced the price pattern in the past. Then I check the intraday charts both on weak and on heavy volume days to learn the "normal" and "abnormal" behaviour of the stock. Last, I check the company's profile (3pg. from Baseline). If I like it, I buy it and I watch it. Another line of events is also to first check the % rise in volume list, or the "Weekend Review" list on Friday. The latter was actually how I got to notice HDCO. I especially like it when a good mutual fund has added to its position on that stock (Seligman in the case of HDCO). Since now I'm burried in work for school and I shouldn't even be writing this, I decided to just close IBD and forget about stocks for a while. We'll see how this plan works. I'm afraid I'm hooked for life. ;^) Cheers, Zoran ------------------------------------------------------------------------------- From: jbeckham@vcn.com (Jeff Beckham) Subject: Re: [CANSLIM] 2 comments & a question Date: 04 Dec 1996 14:32:35 -0700 >Dave Cameron wrote: >Along the lines of comment #1, I'm curious to know whether >most of you get your ideas via software selection, scanning >IBD or what? I usually identify several good candidates using Daily Charts, then wait for a breakout. Jeff Beckham ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] 2 comments & a question Date: 04 Dec 1996 19:52:23 -0500 I like to browse thru DG and IBD, but also look at each day's closing new highs on NYSE and NASDAQ, as well as looking at the percentage gainer leaders on same two exchanges. I also spend a ridiculous amt of time on the net, including checking in at Daytraders almost daily for other ideas (mostly untrustworthy, but I check out anything that sounds interesting, and have found a few) as well as several other investment groups I follow. I also have my "pets", many of which are not CANSLIM candidates but ones I know extremely well and have a level of rapport with their mngmt. I also keep about 35 stocks on my computer monitor at work, a number of which I will set limits on to help me spot breakouts. Finally, I know which brokers in my office are momentum players, so when I see several of them start buying a new stock, I check the graph and recent news. Admittedly, not a very scientific approach, which I guess is why I am still on the keyboard instead of sailing the Caribbean on my yacht. Hope this helps tom w ---------- > From: David F. Cameron > To: canslim@xmission.com > Cc: dcameron@hp-g40.harper.cc.il.us > Subject: [CANSLIM] 2 comments & a question > Date: Wednesday, December 04, 1996 8:19 AM > > Question: > > Along the lines of comment #1, I'm curious to know whether > most of you get your ideas via software selection, scanning > IBD or what? Personally I tend to look in the section on > stocks with the greatest rise in volume - and check several > out by hand. But I seem to recall a few people saying > they use Prodigy to "find" CANSLIM stocks? What do you do? > ------------------------------------------------------------------------------- From: "Richard S." Subject: Re: [CANSLIM] 2 comments & a question Date: 05 Dec 1996 00:51:12 -0600 ---------- : From: Zoran Mitrovski : To: canslim@xmission.com : Cc: Zoran Mitrovski : Subject: Re: [CANSLIM] 2 comments & a question : Date: Wednesday, December 04, 1996 8:51 AM : : : Dave wrote: : : Well, from the "Market Wizards" (a very dear present from a : new friend), David Ryan first checks nicely based charts, then, : RS, then EPS and the whole sequence after that. Since I : don't have charts in front of me, I use the : Nasdaq Stocks in the News charts, to simultaneously see a nice : chart formation and check the EPS/RS/Dist. etc numbers. : If I like everything, I go to my E*trade account and check : the news on the stock (PRnewswire, Businesswire, : Reuter, etc) and see how various news have influenced the : price pattern in the past. Then I check the intraday charts For news, you can also set your portfolio(watch or real) with Mercury Mail and they will send you daily quote info, and news articles on the stocks you select, plus a weekly summary. The Microsoft Investor program/web site, will also give you news articles on your selected stocks. Anyone running Win95 should look at the Microsoft Investor site. Richard... ------------------------------------------------------------------------------- From: patrick.wahl@unpcbbs.cts.com (Patrick Wahl) Subject: [CANSLIM] 2 comments & a Date: 04 Dec 1996 15:02:00 GMT DC>Along the lines of comment #1, I'm curious to know whether DC>most of you get your ideas via software selection, scanning DC>IBD or what? Personally I tend to look in the section on DC>stocks with the greatest rise in volume - and check several DC>out by hand. But I seem to recall a few people saying DC>they use Prodigy to "find" CANSLIM stocks? What do you do? I bet 90% of my ideas come out of the Daily Graphs. I add the things that look good to the list of stocks I track with TC2000 and wait for breakouts. I'm pretty simple-minded about this stuff. As far as what I think looks good - the usual stuff, pretty much. First is a good chart pattern, such as Safeskin formed in the last few months, then all the Canslim things, high EPS, RS, etc. ------------------------------------------------------------------------------- From: Craig Griffin Subject: Re: [CANSLIM] Pivot points Date: 05 Dec 1996 15:30:53 GMT Linda, The pivot point is the buy point. Sometimes it is also called the breakout point. The reason to call it a pivot point is that breakout implies a "breakout to a new high in price", which is often, but not always the best buy point. Most CANSLIM'rs I have known will use break point, pivot point, and buy point interchangably. How does one identify a pivot point? First, a pivot point cannot exist without referencing the base pattern that has formed. There are 3 main types of bases: 1) the flat base, 2) the cup w/ handle base, and 3) the double bottom. In general, the pivot point is the point at which 97% (to choose a number) of overhead resistance has been overcome. For this reason, it need not be an absolute new high in price, but it will always be close to one on a 12 month basis. Overhead resistance older than 12 months is not as powerful as recent overhead resistance. In a flat base, the base doesn't seem to have a pattern, sometimes it is called a rolling base. Take a look at Three Com's Chart (COMS). Notice how it rolls along in a 30% range from 36 in Jan to 52 in late Feb to 36 in Apr to 52 in May to 33 1/2 in July? Finally it sort of sneaks up on 50 and then spikes through it to 52 1/4 in one day in Sept. It's done something almost the same 3 time before. But the earlier spikes were either too early in the base, or starting from too low in the base, or on inadequate volume. Several fakeouts before the real thing to get everyone sick of the stock! But the real thing is clear and strong, closing at it's high for the day with good volume. The actual pivot point can really only be determined on THAT DAY. If you watch this stock you would know it was going to be in the 50ish area. But the chart pattern has finally filled out and as it moves through 52 or so with the volume, you could see that resistance is broken and buy. You could probably even see it earlier in the day as it moves through 51 on volume. This is both an art and a science as you can see. In a cup with handle base, the pivot is the top of the handle. Take a look at Mastec (MASX). Note the long cup which forms from May's peak at about 39 through Sept at 39 1/2. The long handle then forms ending in late Oct. with the volume drying up almost completely for a couple of weeks at the end. Finally comes the spike in price and volume on that day at the end of the drooping down handle. The price moves from 38 to 40 1/4 on high volume. The pivot point in this case is 38! Almost all of the work in the handle was done below 38 and so was virtually all of the work in the cup! This gives you a 2 point (5%) head start on those who wait for it to clear the old high of 39 1/2. But they are not wrong either. You get two chances to buy: 1) from 38 and up 5%, and 2) from 39 1/2 and up 5%! Both are valid pivots, but 38 is obviously the most advantageous one. Once again, until you saw the handle form the pivot point was not apparent. The pivot on the double bottom base is similarly determined to the two above. The basic technique is to wait for the base to be fleshed out and to then start watching very closely, re-evaluating the stock daily. But you will quickly begin to see the points where "97%" of the overhead resistance is gone. Hope this helps. Best regards, Craig At 11:47 AM 12/3/96 -0500, you wrote: >... >So, I've been trying to identify the pivot points O'Neil writes about but without much success. So I thought I'd put the following question to the list: How do you identify a pivot point? And how reliable is this identification? ------------------------------------------------------------------------------- From: Deepak Kapur Subject: Re: [CANSLIM] Pivot points Date: 05 Dec 1996 11:05:21 -0500 (EST) Hi Craig, Your postings explaining some of the key concepts are very helpful. Thanks for taking the time to write these. Deepak ------------------------------------------------------------------------------- From: "tom worley" Subject: [CANSLIM] Computer Industry Date: 05 Dec 1996 20:36:28 -0500 For those that noticed, new highs today again featured Dell Computers. In the research material I received today from Bear Stearns is a new issue covering this group, to give you an idea of how Bear sees this tech group, here are some quotes from the cover: "Miles to Go Before This Industry Sleeps", "Robust Fourth-Quarter 1996 Expected", "We See Growth Continuing into 1997", "Replacement Cycles Spur, Not Deter, Demand". Guess this will give you an idea of how one major wirehouse looks at this group. I've got the book at home, anyone who wants to hear Bear's comments on specific cos, email me. Ones covered are Adaptec, Apple, Compaq, Dell, Digital, Gateway 2000, HP, IBM, Intel, Quantum, Seagate, Silicon Graphics, Sun, and Western Digital. tom w ------------------------------------------------------------------------------- From: uttran@ix.netcom.com (UT TRAN) Subject: Re: [CANSLIM] Computer Industry Date: 05 Dec 1996 18:50:13 -0800 Would you forward me a copy please Thank You wrote: > >For those that noticed, new highs today again featured Dell Computers. In >the research material I received today from Bear Stearns is a new issue >covering this group, to give you an idea of how Bear sees this tech group, >here are some quotes from the cover: "Miles to Go Before This Industry >Sleeps", "Robust Fourth-Quarter 1996 Expected", "We See Growth Continuing >into 1997", "Replacement Cycles Spur, Not Deter, Demand". Guess this will >give you an idea of how one major wirehouse looks at this group. > >I've got the book at home, anyone who wants to hear Bear's comments on >specific cos, email me. Ones covered are Adaptec, Apple, Compaq, Dell, >Digital, Gateway 2000, HP, IBM, Intel, Quantum, Seagate, Silicon Graphics, >Sun, and Western Digital. > >tom w > ------------------------------------------------------------------------------- From: berntes@ibm.net (Bern) Subject: Re: [CANSLIM] Computer Industry Date: 06 Dec 1996 10:26:00 GMT On Thu, 5 Dec 1996 20:36:28 -0500, you wrote: >I've got the book at home, anyone who wants to hear Bear's comments on >specific cos, email me. Ones covered are Adaptec, Apple, Compaq, Dell, >Digital, Gateway 2000, HP, IBM, Intel, Quantum, Seagate, Silicon = Graphics, >Sun, and Western Digital. > >tom w > Perhaps it would be of interest to the LIST to know just roughly if they say it's a buy, hold, sell, et cetera. if you don't want to go into long typing. Gui M ------------------------------------------------------------------------------- From: "David F. Cameron" Subject: [CANSLIM] More commentary on "M" Date: 06 Dec 1996 7:37:24 CST Its early in the U.S. - an hour before the market officially opens, but I'm about ready to say charts be damned I'm getting out. This is not good, because I bought yesterday - and on margin to boot - but Mr. Green- span must want to cover his shorts. His comments seem to have sent the "M" part of CANSLIM into a tailspin overseas - so.... one thing we've all agreed on is DON'T FIGHT THE MARKET (emphasis is O'Neils' not mine...) Dave Cameron dcameron@harper.cc.il.us p.s. I just found out there is a Zoran Corp. trading under ZRAN. Have you been holding out on us, Zoran? ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: Re: [CANSLIM] More commentary on "M" Date: 06 Dec 1996 09:56:43 -0500 (EST) Dave wrote: > Its early in the U.S. - an hour before the market officially opens, but > I'm about ready to say charts be damned I'm getting out. This is not > good, because I bought yesterday - and on margin to boot - but Mr. Green- > span must want to cover his shorts. His comments seem to have sent the > "M" part of CANSLIM into a tailspin overseas - so.... one thing we've > all agreed on is DON'T FIGHT THE MARKET (emphasis is O'Neils' not mine...) I don't want to sound like a rude imbecile around here, but I have been sorta wishing for something HUGE to happen with the market so that I can experience and study all the associated phenomena around it. I've been reading lately quite a lot of derogatory comments about individual investors (amateurs) all coming from "seasoned experts" mainly saying that anybody could earn good money in a flying market like this. I am worried because I don't want to give too much weight to my trading abilities now, only to be convinced in their non existance when the "going gets tough". I wana see the "tough" and see myself in it, too. And I want it as soon as possible -- at least before I decide I could perhaps even trade for a living. ;^) > Dave Cameron > dcameron@harper.cc.il.us > > p.s. I just found out there is a Zoran Corp. trading under ZRAN. Have > you been holding out on us, Zoran? What can I say -- you caught me, Dave. ;^) Seriously now, I was surprised myself when I found about ZRAN last summer. And it is in the chip industry. I think the CEO's name was not Zoran though. I would be interested to find out how that co got it's name. Anyway, they snatched the name before I could do anything with it. Btw, Zoran is a very common name where I come from. "Zora" means "dawn" in Macedonian, and it is the female version of my name. Cheers, Zoran http://www.seas.rochester.edu:8080/ee/users/zmitrov/home.html ------------------------------------------------------------------------------- From: "David F. Cameron" Subject: [CANSLIM] Bad Call? Date: 06 Dec 1996 13:45:46 CST OK... so I sold a lot this morning - at the open - and at the low. I thought CANSLIM was supposed to say get out with an 8% drop. Well, HELL, half my stocks were down 8% at the open - now they've all bounced back. Is this still a good rule? I think so. Did it work today -- not really. I'm curious to know what the rest of you did. I've been hearing from the experts here in no uncertain terms: Cut your losses - cut your losses - cut your losses. If you practice what you preach, certain of you - esp. Craig Griffin, Patrick Wahl, Tom Worley, and Mike Langston had to have some stops hit - and got out at the open as well. If so, did you really follow through? I did - I'm feeling kinda dumb right now - but not totally because I was margined - and didn't want to risk losing more capital than I already had. This group has been awfully silent of late - but inquiring minds want to know. Thanks, Dave "a little poorer" Cameron dcameron@harper.cc.il.us ------------------------------------------------------------------------------- From: Michael A Langston Subject: re: [CANSLIM] Bad Call? Date: 06 Dec 1996 16:50:20 -0500 dave cameron writes: > If you practice what you preach, certain of you - esp. > Craig Griffin, Patrick Wahl, Tom Worley, and Mike Langston > had to have some stops hit - and got out at the open as well. not me, my trading account is 100% in cash -- but even if i had some HGS longs here, remember: pull the trigger quickly if bad news is specific to your stock; a little slower if specific only to your stock's industry; and slower yet if bad news applies only to the broad market -- the street utterly kills a disappointing HGS stock nowadays, but it continues to buy the broad dips -- one day it'll be wrong, but no one can say for sure just which day that will be btw, it looks to me like HGS "may" be just about ready to go again, am keeping an eye on the russell 2k to see if can really begin to outperform -- might be a good weekend for sipping some single malt and running charts :) i was tempted to gamble a little on the possible MTC spinoff today, but sat on my hands -- sigh, this one could go either way on monday when the news hits mike ------------------------------------------------------------------------------- From: Jeff Beckham Subject: Re: [CANSLIM] Bad Call? Date: 06 Dec 1996 15:19:20 -0700 >I'm curious to know what the rest of you did. I've >been hearing from the experts here in no uncertain >terms: Cut your losses - cut your losses - cut your >losses. I for one hit all my stops today. aka-no stocks, lots of cash. I didn't have any "losses" per se, as I continued to move my stops up as my stocks went up. I do have some nice gains that were wiped out though. This gives me a chance to review my old holdings along with some new prospects, for when I jump back in. I think I'll watch for a while though until that "perfect" stock grabs my attention. The M in CANSLIM is acting very poorly as of late!! Jeff Beckham ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: Re: [CANSLIM] Bad Call? Date: 06 Dec 1996 18:11:19 -0500 (EST) Dave wrote: .. > I thought CANSLIM was supposed to say get out > with an 8% drop. Well, HELL, half my stocks were down > 8% at the open - now they've all bounced back. .. > Is this still a good rule? I think so. Did it work > today -- not really. .. > I was margined - and didn't want to risk losing > more capital than I already had. Dave, I'm no expert but I'd like to say what I learned about this. The "cut losses" rule to me is THE BEST of all. Protecting your play money while perfecting your skills and instincts seems to be the name of the game. I simply cannot watch a losing stock that struggles below my buy point (and on a high volume, to boot) while knowing that there are at least dosens of winners breaking out at that very same moment; being kicked up by nice volume spikes; and never intending to look back (well not at least for the few days/weeks of the best ride up). Now, there's a question I wanted to ask. When we talk about cut-loss rules, where does margin go into play here? Shall one cut them at 8% NET loss (with the margin part included) or the 8% is strictly related to the price movement (which would then imply higher NET losses because of the margined purchase). For me personally, 8% price loss is too much when you are on margin. I also wouldn't stick to that number religiously. With this I mean, I would cut the losses even sooner (much sooner) if something else tells me something is not going as planned with that stock. For example, if it has been trading within tight day ranges for months before, and it suddenly decided to make deep swings with a downward momentum (and, perhaps, on high volume chunks), I'd dump it even before the 8% level and start looking for a more consistent performer. I just can't stand watching a looser when I know I'd rather have my money elswhere (even cash, if I didn't have the time to do proper research), and $20/$40 is all it would take to make the switch. Try to see the stocks you own as if you never owned them. Would you buy them today, if you had the cash to do so? If not, why is your money where you wouldn't want it to be? Hell, I got in PBK at 26 and got out at 25 5/8, and I never regreted it, although it went to 26 1/4 the next day. So what? I'm not saying that was the right thing to do, but maybe buying it at 26 wasn't either. Now, this specific market plunge was caused by Greesnspan's statement, and there are hints of interest rates being raised on the Dec. 17 meeting, and you did a smart thing getting out and cutting your losses. The rule works. Read again the O'Neil's reasoning behind it. By getting out you just paid a premium on your insurance against a steeper market plunge. Hell, the market could have easily gone 10-15% down today and never returned in the next year for all we know. Now if that happened, you'd be feeling much dumber for not being disciplined, and cut your losses. And to finish...After playing HDCO up 1.5 points for coupla days last week, of course, I'm in cash again. As I said before, being a novice, I can gain much more by watching and learning in times when there are so many signs of a market correction. Quick ins and outs is what I would perhaps try to do occasionaly when I sense the momentum on a canslim stock going. > Dave "a little poorer" Cameron > dcameron@harper.cc.il.us Cheers, Zoran ------------------------------------------------------------------------------- From: Johan Van Houtven Subject: Re: [CANSLIM] 2 comments & a Date: 07 Dec 1996 00:57:54 +0100 At 03:02 PM 12/4/96 GMT, you wrote: >I bet 90% of my ideas come out of the Daily Graphs. I add the things >that look good to the list of stocks I track with TC2000 and wait for >breakouts. I'm pretty simple-minded about this stuff. > >As far as what I think looks good - the usual stuff, pretty much. First >is a good chart pattern, such as Safeskin formed in the last few months, >then all the Canslim things, high EPS, RS, etc. I also look at the chart first. Take a look at APCC. Building a firm base. Looks like a low risk, nice potential reward situation to me. APCC make UPS's. Uninteruptable power supplies. A few years ago only one distributor here in Belgium was selling APCC UPS's. Now the 4 biggest are all selling them. There products are excellent. Also recovered very nicely today (Friday 12/6), after the Greenspan induced mini-crash. Disclaimer: I already have a starting position at 24.75 in APCC. Made good money on AALR. Bought at 12 on 11/26/96 sold at 13.625 12/5/96. Sold too soon, could have sold at 14 or 14.124. Nevertheless, I'm happy. Approx 10% in two weeks. Currently researching ALPH. Anyone else in APCC? ------------------------------------------------------------------------------- From: "tom worley" Subject: [CANSLIM] Bear Stearns coverage of computer industry Date: 06 Dec 1996 20:40:10 -0500 There have been several requests for info on Bear's review of this group. The book itself is 80 pages long, and I have no scanner, so much as I like typing, forget the entire book. I have had several requests for a specific stock, and will respond individually to them. One good suggestion was a kinda summary, which follows here for those interested: Following is quoted from Bear Stearn's "Computer Quarterly" dated Dec 2, 96 Continuing improvements in price performance, owing to gains in semiconductor process technology, mean that every new "turn of the crank" in process technology results in products that are faster, cheaper, smaller, and/or easier to use. These advances have increaed productivity in corporate environments. Two significant shifts in buyer behavior have resulted in accelerating demand. First, information technology spending has gone from being perceived as a "necessary evil" to automate office functions to being viewed as a means to offer a competitive advantage or to maintain competitiveness. This change has led to greater demand for higher=performance systems. Second, the focus on "total cost of ownership" has highlighted the relatively low cost of hardware relative to total info tech costs, which has reduced the impediments to spending on hardware. There is also great interest in using technology to manage technology, or "computers managing computers". Indeed, we believe that unit demand in 1997 may continue at this year's pace owing to multiple product cycles, favorable pricing, and replacement cycles. In 1997, we expect to see new product cycles based on Intel's multimedia-enhanced Pentium (i.e. MMX) in Q1, 97, followed by "Klamath" the MMX version of Pentium Pro. Intel is expected to launch its 64 bit "Merced" chip in 1998, which will have significant impact on the workstation market. (author's note: above para clearly covers O'Neill's reference to new products/competitive edge) Looking at 1997, we could see a continuation of the solid unit growth of 1996, with gains in the 15%-20% range as a result of continued elasticity, new product cycles (Pentium MMX, Pentium Pro) and replacement cycles. SUMMARY: Company Rating Q1 Rpt Est Q1Y6 1st Call FY96 FY97 PC Companies Apple Neutral 1/16 .06 -.56 -.04 1.00 1.50 Compaq Buy 1/16 1.53 1.17 1.49 4.60 5.60 Dell Buy 2/12 .80 .35 .79 2.57 3.20 Gateway 2000 Neutral 1/23 .96 .74 .99 3.05 3.80 Enterprise-wide Systems Digital Neutral 1/22 .12 .91 .14 .50 2.50 Hewlett Attractiv 2/17 .70 .75 .76 2.80 3.35 IBM Attractiv 1/12 3.82 3.66 3.87 11.00 12.75 Silicon Graph Neutral 1/16 .22 .30 .24 1.15 1.50 Sun Attractiv 1/15 .41 .32 .42 1.68 2.00 Disk Drive Cos Quantum Attractiv 2/4 .52 .36 .48 1.45 2.90 Seagate Buy 1/09 .69 .67 .73 2.95 3.75 Western Dig Attractiv 1/23 .94 .44 .90 3.90 5.25 Computer Related Semis Adaptec Buy 1/17 .44 .34 .42 1.66 2.05 Intel Buy 1/14 1.72 .98 1.76 5.40 7.50 Please remember that Bear Stearns is a market maker in many of these and/or has an investment banking relationship. I cannot be responsible for the accuracy of the above, including any typos in the book or that I made. I am making no recommendations, am simply providing this info as a courtesy in hopes it helps all of us get a broader view of this group in particular, and the market in general. REMEMBER, CANSLIM is not intended as a daytrading tool, O'Neill works for mutual funds and institutional money managers, he looks, like the Feds, long term. He is a buy and hold kind of guy so long as the stock behaves. I will post any coverage/response on a specifically requested stock this weekend as time permits. Unfortunately, got a lot of domestic stuff to take care of, along with the usual football games, but will try to get it all out by Sun evening, so stay tuned. Will post to the individual unless I have received multiple requests. Hope this helps good luck tom w ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] Bad Call? Date: 06 Dec 1996 20:51:51 -0500 Good answer, Mike, I think you said what I was trying to say but in a hell of a lot less words and much more to the point. Altho, not to just be a contrarian, I am almost 100% invested, so just goes to show how two different CANSLIMers can view the market. Actually, I suspect Mike was in larger cap, more liquid stocks while I am still fighting the doldrums in the microcaps. The effect on them from a day like today is radically different. tom w ---------- > From: Michael A Langston > > not me, my trading account is 100% in cash -- but even if i had some > HGS longs here, remember: pull the trigger quickly if bad news is > specific to your stock; a little slower if specific only to your > stock's industry; and slower yet if bad news applies only to the > broad market -- the street utterly kills a disappointing HGS stock > nowadays, but it continues to buy the broad dips -- one day it'll > be wrong, but no one can say for sure just which day that will be > > btw, it looks to me like HGS "may" be just about ready to go again, > am keeping an eye on the russell 2k to see if can really begin to > outperform -- might be a good weekend for sipping some single malt > and running charts :) ------------------------------------------------------------------------------- From: "tom worley" Subject: [CANSLIM] Market comments 12/6 Date: 06 Dec 1996 20:01:31 -0500 Today was one of those days where I REALLY wish I had access to my home computer before I get home at night, I might have been able to save Dave and others some bucks. I will repeat here what I was saying this am at about 9 am: First, having long studied Greenspan, I know him to be a cautious speaker. He actively does not want to say something that will, by itself, move the bond or equity mkt. Reading his comments and the interpretations being placed on them, I knew (and was proven right) that he would be on air today trying to explain more clearly what he REALLY meant. Second, even more unlikely is that Greenspan would make specific mkt comments at an hour which would allow Japan and Europe to front run the US mkt. Third, unemployment nrs were released before the opening and were below expectations both in terms of the unemployment rate overall as well as jobs created. This was one more verification of the Fed's position that the economy is slowing AS THEY EXPECTED. It is also significant that this close to Christmas (when a lot of temps are hired) that it was below expectation, even tho seasonal sales so far appear ok. Fourth, the equity mkt at times like this will tend to take its lead from the bond mkt, esp where Greenspan and important economic reports are involved (here we had both). The bond mkt opens before the equity mkt, had been down over 32 ticks, and before 9:30 had already reversed to down 14 ticks. This clearly indicated a strong down opening followed by a reversal. Fifth, I fortunately had the time at the opening to follow the Dow 30 closely (since it is the most closely watched index). It was over two minutes into the opening before the first one opened for trading (KO, down 1.5). Five minutes into the market, only 8 had opened, all naturally down most over a pt. At that point, the index was down over 28 pts. For those who, like me, compared the opening of the Dow 30 in real time with the dow index, it was apparent that the Dow was not falling/collapsing, just simply reflecting the additional effect of each indexed stock being added to the composite. By the time most of the 30 (28 total) were open, each were down and almost all (or even all) over a pt. The index now was at minus 80 plus, approaching 90, and the circuit breakers had been in place for over 10 minutes. Had all 30 opened simultaneously, the opening would have been about a minus 90, followed by a small slippage to minus 110, then by 10:30 or so a strong reversal taking it back to about a minus 50. I think at one point we actually came back within 25 points of yesterday's close and the circuit breaker was taken off. LESSON TO BE LEARNED: CANSLIM is a theoretical approach to analyzing individual stocks, not judging the market action. To grasp the subleties of Greenspan/Fed Reserve words and actions, you have to try and think like them. Their focus is not on today's reports, it is on whether today's reports fits their models they developed six to nine months ago. They have been saying the economy is slowing into the range they seek to avoid inflation without slipping into a recession. Today's report showed exactly that. Therefore, Greenspan's remarks last night were out of character and had to be taken with caution. Combined with the unemployment nrs, today's action, while on the neg side, was not a collapse and very temporary. CONCLUSION: today was a Kmart blue lite special, let the panic subside, then buy quality. Most of the techs went down 4-5 pts, then rallied at least 2-3 pts, great time for day trading if you have large capital and courage. There were some notable examples, DELL stands out. Dropped about 5 pts, then rallied to multiple new highs, up over plus four pts in the afternoon. CPQ, TXN, MSFT and many other techs actually did very well, either closing up for the day or at least recovering most of their early losses. Because of the conflict between the apparent bad news (Greenspan) and the good news (unemployment nrs), there was general chaos on the exchanges. I generally am not willing to throw in a market order at the open without some idea of where my order will be executed. This goes for both a buy and sell. The brainless brokers I support who did this today were universally wrong, worst case was 2500 MU sold on the open 2.5 pts below where it closed. My best advice in a chaotic mkt like this is hold your sell order at least until the stock is trading. Most of the damage will be on the gap down, and you can't avoid that. Once it is trading, assess the situation and see if you still want to sell. In today's case, because of the countering good news, I saw it solely as a buying opportunity. Was I stopped out on anything? No. As I have mentioned before, finances have prevented me from trading the higher priced stocks that I like. The small caps were barely affected by today. If it goes on for another 2-3 days, then I may get hurt. I currently only hold one large cap, and it only dropped about 5%, then recovered about half of this. I did attempt to add to two small cap positions, but neither dropped measurably and I was not filled. I will admit I have an advantage over most brokers and investors, during seven years as an active broker and 30 as an investor, I have made it my priority to understand how the market trades and what influences it. I have watched the character of the Fed Reserve change as well. During the Carter years, it was knee jerking, doing gross adjustments in an attempt to move the economy. All this ultimately accomplished was high inflation and interest rates. During the Nixon years, the Feds started to understand their job, but back then they were typically looking out no more than 3 months. By the end of the Bush era, the Feds were starting to plan their models on 5-6 months out, and currently they are looking at almost 9 months. Bottom line, they are now, and have been for over 18 months, fine tuning the economy. For the past two years I have been in sync with their actions. My only error two years ago was that I was about three months off in timing because I didn't realize just how far out the Feds were looking. Will the Feds increase interest rates in Dec, IMHO, absolutely not! How about the Jan/Feb period, I see zero likelihood at this time. When economic reports are published, it is important to measure them not just in their content but how they stack up to what the Feds had already expected those reports to show from about 6 months or so ago. Remember it was back in July or August that the Feds indicated the economy (which then was running ahead of growth expectations) to slow down in Q4. Reports for the past 3 mos have shown this to be the case. Therefore I read the Feds as taking no action for the present. In fact, if productivity in Q1 and Q2 does not show at least a small increase before the summer doldrums, the Feds may even cut rates by 25 basis pts. Remember, if I am right you heard it here first, if I am wrong, I get to do the Garzarelli spin and change my timing. When you try to assess the "M" of CANSLIM, it is important to step back from our usual mentality which is focused on specific stocks (usually techs, which by themselves are volatile) and look at the overall picture. Most important of these views is whether the mkt is bull/bear, and short term is up/down. However, you also have to try to understand why the mkt is behaving so. When you consider actions by the Feds (at least the group we have currently), one thing is for sure, they do not knee jerk. Sorry for running on like this, I guess this is my record post. Probably should get a job writing a newsletter, but no one would pay me what I think I am worth. Oh well. Hope there are at least a few thoughts here that will help you put today's action into perspective. Every day is a learning experience or else it was wasted. good luck tom w ------------------------------------------------------------------------------- From: "Richard S." Subject: Re: [CANSLIM] Bad Call? Date: 06 Dec 1996 23:19:21 -0600 I running my stops a little looser than the 8%, but I have several that are within 1/4 to 1/2 of popping. One more bad day like today and I'll be about 70% in cash, which might not be so bad, there could be some good buys coming up pretty quick. Richard ---------- : From: David F. Cameron : To: canslim@xmission.com : Subject: [CANSLIM] Bad Call? : Date: Friday, December 06, 1996 1:45 PM : : OK... so I sold a lot this morning - at the open - and at : the low. I thought CANSLIM was supposed to say get out : with an 8% drop. Well, HELL, half my stocks were down : 8% at the open - now they've all bounced back. : : Is this still a good rule? I think so. Did it work : today -- not really. : : I'm curious to know what the rest of you did. I've : been hearing from the experts here in no uncertain : terms: Cut your losses - cut your losses - cut your : losses. If you practice what you preach, certain of : you - esp. Craig Griffin, Patrick Wahl, Tom Worley, : and Mike Langston had to have some stops hit - and : got out at the open as well. If so, did you really : follow through? : : I did - I'm feeling kinda dumb right now - but not totally : because I was margined - and didn't want to risk losing : more capital than I already had. : : This group has been awfully silent of late - but : inquiring minds want to know. : : Thanks, : : Dave "a little poorer" Cameron : dcameron@harper.cc.il.us ------------------------------------------------------------------------------- From: patrick.wahl@unpcbbs.cts.com (Patrick Wahl) Subject: [CANSLIM] Bad Call? Date: 06 Dec 1996 14:21:00 GMT DC>From: "David F. Cameron" DC>Date: Fri, 6 Dec 96 13:45:46 CST DC>Subject: [CANSLIM] Bad Call? DC>OK... so I sold a lot this morning - at the open - and at DC>the low. I thought CANSLIM was supposed to say get out DC>with an 8% drop. Well, HELL, half my stocks were down DC>8% at the open - now they've all bounced back. DC>Is this still a good rule? I think so. Did it work DC>today -- not really. One thing I am not clear on is if you sold 8% from your buy point. If so, then you did the correct thing. Who knew where the market would go from the open? However, if you were just selling because things were looking a little spooky and prices of your stock were down 8% from some point yesterday, say where you were already sitting with a 20% profit, then you should have held on. One thing I try to keep in mind when you have these scary looking 2 or 3% drops in the overall market in one day, is that markets don't go straight down, they don't turn on a dime, and if there is a bear market ahead, it takes time for the market to top out and start down. A person should have time to get out, and meanwhile, if holding a strong stock, it seems best, to me anyway, to hang to it as long as possible. A couple of things to keep in mind for the M in canslim are that we are in a seasonally strong period, Dec-Feb, so that should keep the market from going down too far, barring the development of any sort of extreme situations. Also, interest rates are low and generally bond prices are in an uptrend, and that is usually a positive for the market. DC>you - esp. Craig Griffin, Patrick Wahl, Tom Worley, DC>and Mike Langston had to have some stops hit - and DC>got out at the open as well. If so, did you really DC>follow through? I guess I pretty much explained this above. I deviate just a tiny bit from the usual 7% rule on loss cutting in thinking that you can fudge it just a bit, say up to 10% loss before bailing out. 7% is somewhat arbitrary, and if you buy a bit off the exact pivot point, and that can be just a matter of being a few hours late in buying a stock, then you may need to give a stock a little more slack. If possible, I like to pick a chart point that makes sense and use that if it permits tight enough risk control. As an example, I just bought a stock at 22 and change, the base formed at 20 3/4 to 21 1/2 or so, and a 7% stop means only a pull back to the base, not necessarily a meaningful price move. I'm keeping a stop just under the recent base, which works out to 10%. But if it hits that I am definitely out, and if the stock hasn't shown any progress in a week or two I may sell it even at a 2% loss, or whatever it may be. I hope all this is somewhat useful. ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] Bad Call? Date: 07 Dec 1996 07:31:58 -0500 Good comments, Patrick, esp concerning studying the charts and knowing where the base is. I don't entirely agree with holding on in a sharp down day just because you have a 20% gain. The point of moving your stops up as the stock appreciates is to protect your profit. If you then enlarge the range you give the stock, you risk losing a bigger part of your gain. On the other hand, if the stock has performed well and you are already up 20 or 30%, AND it has recently consolidated into a short but unreliable base, I might allow it to retrace to that base before pulling the plug. As I said in my lengthy mkt comment post, this didn't apply to me yesterday because of the pos unemployment nrs balancing Greenspan. One final point no one has mentioned, we have continued to see record short positions. This represents a huge buying power in any serious correction, which should put at least a temporary halt to any major fall, particularly since many are upside down on their short position. I would be careful about Feb, after a strong Nov/Dec/Jan, Feb has often been the corrective month. tom w ---------- > From: Patrick Wahl > To: canslim@xmission.com > Subject: [CANSLIM] Bad Call? > Date: Friday, December 06, 1996 9:21 AM > > > One thing I am not clear on is if you sold 8% from your buy point. If > so, then you did the correct thing. Who knew where the market would go > from the open? However, if you were just selling because things were > looking a little spooky and prices of your stock were down 8% from some > point yesterday, say where you were already sitting with a 20% profit, > then you should have held on. > > One thing I try to keep in mind when you have these scary looking 2 or > 3% drops in the overall market in one day, is that markets don't go > straight down, they don't turn on a dime, and if there is a bear market > ahead, it takes time for the market to top out and start down. A person > should have time to get out, and meanwhile, if holding a strong > stock, it seems best, to me anyway, to hang to it as long as possible. > > A couple of things to keep in mind for the M in canslim are that we are > in a seasonally strong period, Dec-Feb, so that should keep the market > from going down too far, barring the development of any sort of extreme > situations. Also, interest rates are low and generally bond prices are > in an uptrend, and that is usually a positive for the market. > > DC>you - esp. Craig Griffin, Patrick Wahl, Tom Worley, > DC>and Mike Langston had to have some stops hit - and > DC>got out at the open as well. If so, did you really > DC>follow through? > > I guess I pretty much explained this above. I deviate just a tiny bit > from the usual 7% rule on loss cutting in thinking that you can fudge it > just a bit, say up to 10% loss before bailing out. 7% is somewhat > arbitrary, and if you buy a bit off the exact pivot point, and that can > be just a matter of being a few hours late in buying a stock, then you > may need to give a stock a little more slack. If possible, I like to > pick a chart point that makes sense and use that if it permits tight > enough risk control. > > As an example, I just bought a stock at 22 and change, the base formed > at 20 3/4 to 21 1/2 or so, and a 7% stop means only a pull back to the > base, not necessarily a meaningful price move. I'm keeping a stop just > under the recent base, which works out to 10%. But if it hits that I am > definitely out, and if the stock hasn't shown any progress in a week or > two I may sell it even at a 2% loss, or whatever it may be. > > I hope all this is somewhat useful. ------------------------------------------------------------------------------- From: Craig Griffin Subject: Re: [CANSLIM] Bad Call? Date: 07 Dec 1996 17:17:41 GMT There have been some excellent comments on this thread. This is the way we can pull together as a group and do some meaningful learning. (It is helping me a lot anyway). I agree MOST strongly with Patrick Wahl's comments. It's nice to hear all the sage voices out there. I do use tight 5% or 7% stops (or less if I can if the action doesn't seem right as with ASND recently, although the verdict is still out on that one, still might take off). However, I think I will add Patrick's technique of setting the stop just below the top of the base if that is only another % or so - in some cases. But here is the point, on the BREAKOUT, your stop must be inviolate. There must be an absolute point where you have drawn a red line and said "I will honor this stop and sell the stock if it closes below this line." No if's ands or buts. This is on the breakout, when you first purchase the stock that we are talking about. I do not use trailing stops. I use the sell rules in the O'Neil book to determine when to sell after I am ahead in a stock and my original stop is no longer in danger of being hit. These stocks can be so volatile in the short term, that I find that a trailing stop is always going to be hit during the next basing period. Therefore, you can buy right, hold on to the stock while it runs 30%, sell half at 30%, and still get stopped out when it drops 18% from it's peak while forming the next base. The idea of not selling the entire position at 30% is that you are either a) looking for one of the other sell rules to come into effect (hopefully higher than 30%) or b) maybe going to manage to hold your remaining 1/2 position through the new base (if a sell rule doesn't force you out) and maybe even buy a little more stock (say a 1/4 postion) on the next breakout. When I say sell rule above, I really do not mean an individual sell rule, O'Neil says that usually 3 or 4 rules will come into play and that seems to be true. I agree strongly with Tom and others who have pointed out that the markets will have these hair-trigger, scare you, shake you out days. With a portfolio of HGS, you may see your entire portfolio down 5% on a day like that. It has taken me a long time to adjust to that, and it can still be stomach wrenching. For a while I wondered if I should not just be in mutual funds all the way. For some people, it is best, or it is best to simply have a very small CANSLIM portfolio. You have to adjust your style of trading to fit your comfort level, or adjust your comfort level as you learn. For example: if your portfolio was down 5% intraday Friday, but recovered to close down "only 3%" and you have a say 30% gain so far for the year, and if you have seen it before, it gets easier. But heck, you still might want to sell your weakest stock and pull 25% of your assets out of the market, just to buy insurance. Or, conversely, you might be buying more of a breakout you missed 2 days ago as it bounced off the top of it's base late in the day. As I said, part of it is personality and part is experience. I also agree with a reluctance to sell or buy stock in the first 30 mins of trading. Sometimes I do it, but it is rare. If there is bad news on a stock I own and it opens down 5 points, I will probably be there with a market order at the open. On exceptionally good news which is spurring a breakout (and not a continuation of a run), such as unexpectedly good earnings released before the opening bell, I might buy 1/4 - 1/2 position near the open or at the open, and give it time to trade back before buying more. Sometimes it trades on up during the day and comes back near that opening buy and my second purchase is higher. Sometimes it actually trades a little lower than the open, but is still clearly going to be a breakout (is trading above the pivot) and I get the rest a little cheaper. But either way, I get to see how it's trading and if it is going to hold above the pivot or just be a fakeout breakout. I digress, sorry. As I said, I don't like trailing stops. But if you are going to use them, it helps a lot to have Market savvy in the way some of the others here do. One sell rule I use is the rule that once you have a profit in a stock of 15% or so, you should never let it turn into a loss. Now for true confessions. My ongoing saga with MASX: I made a tidy profit buying the breakout and selling on the day with heavy volume and no further upside progress (distribution), as many of you know. Just as a review, you cannot read the selling rules on pages 103 to 108 in O'Neils book too many times. If they do not make sense at first, just keep comparing them to your trades and the action in your stocks (in the chapter When to Sell and Take Your Profit). Some of them apply to Friday's market action as well (see #25). The day I sold MASX was Nov 14th, the rules I applied are #4, #9, #21, #34 and #28. Now that is what I call a clear sell signal (and at the top too)! Why #28?, my variation is that I assumed that many of the folks who bought at $38 or below in that long handle would be selling to get a 50% profit at $57. The day before on Nov 13th, you could have applied #3 also. Although I was out, another signal to sell came a few days later on Nov 20 and 21. These two days involve sell rules #8 and #10. Amazingly, you would still be getting out near the top of the price run. These signals are a little weaker than the ones on the 14th, but if you had seen some of the ones on the 14th, how could you wait? But now for my big mistake: MASX has dropped quickly back to the 50 day moving average and was hugging it for a couple of days. It looked like a good re-entry point for a longer term hold and I had heard of people buying a 50dma bounce. Well, it didn't bounce for me, and as always, especially when trying something new (and definitely NOT CANSLIM), I had a fairly tight stop, and got stopped out yesterday (Friday). There goes some of the profit. Should have paper traded my new technique first. And not tried it on a stock I had owned recently. And should have checked to see if some of the other sell rules weren't instead flashing "sell". Always learning, Craig ------------------------------------------------------------------------------- From: "David F. Cameron" Subject: Re: [CANSLIM] Bad Call? Date: 07 Dec 1996 11:47:31 CST Thanks for all your comments on the market movement on Friday. Probably the best analysis was by Tom Worley - I'm just naive enough or trusting enough to believe that he accurately depicted what was going through his mind. What I did was as follows: 1. Monday bought a new stock - going to 100% invested. 2. Thursday - went on margin, picked up another stock. 3. Posted my message one hour before the market opened, fully aware of Greenspan's comments and the jobless report - saying it looked like a bad day. 4. Placed a market order with my broker to sell the 2 new stocks (both large caps) at the open. 5. Sold both at the low for the day. 6. At lunch, gnashed my teeth as the market turned back up to near break-even. 7. Right before close, posted my message, feeling I showed proper discipline, but still did something wrong in that I took a 7.5% loss on the stock bought on Thurs. and broke-even on the Monday stock (minus the 30$ brokerage fee). The Monday stock climbed 6% after I bought - opened down 6% at EXACTLY my buy point. What do I think now? 1. I wish I had Tom's experience/analysis. 2. I'm still feeling good that I got out - As Zoran said, not all of us can call what would happen. It seems, more often than not - an open of -100 pts. on the DOW signals sell. 3. I am still about 80% invested - so I can take advantage of moves in my stocks which closed down, but only 0-5%. 4. That Greenspan is the most influential man in the U.S. for the bond and equity markets! Thanks again for the info. I've been trading or investing for 8 years - and as someone said - this was a relatively unique event. I'll take my lumps, but I'm not sure I could repeat Tom's insightfulness and profit from it should it happen again. Its strange, but I'm calling this year all wrong. Last year I doubled my money w/o buying options, this year I'm still below break-even. Oh well, I checked the results to date from the Barron's roundtable - I have PLENTY of company. Regards, Dave dcameron@harper.cc.il.us ------------------------------------------------------------------------------- From: "HTML User http://www.bluemountain.com " Subject: [CANSLIM] Animated greeting card arrived! Date: 08 Dec 1996 05:38:12 -0600 (CST) Guess what!! Someone has sent you an animated electronic greeting card. You can pick up your personal greeting card by connecting to the following Web address: http://www.bluemountain.com/mailbox4/canslime07141010.html _______________________________________________________________________ You can CONNECT THROUGH A BROWSER (such as Netscape 3.0 or IE) to the WEB (World Wide Web) and simply copy and paste the exact WEB address above into the "Location" or "Address" space in your BROWSER This service is FREE! :) HAVE a good day and have fun! _______________________________________________________________________ Accessing your card indicates your agreement with our Website Rules posted at the bottom of the following Web location: (You're welcome to send a free card to someone at this location) http://www.bluemountain.com ------------------------------------------------------------------------------- From: patrick.wahl@unpcbbs.cts.com (Patrick Wahl) Subject: Re: [CANSLIM] Bad Call? Date: 07 Dec 1996 12:52:00 GMT DC>From: "David F. Cameron" DC>Date: Sat, 7 Dec 96 11:47:31 CST DC>3. Posted my message one hour before the market opened, DC> fully aware of Greenspan's comments and the jobless DC> report - saying it looked like a bad day. DC>4. Placed a market order with my broker to sell the 2 DC> new stocks (both large caps) at the open. DC>5. Sold both at the low for the day. I've had one other thought since my other reply to your original post. THis is something another stock investor said to me, and thinking back found it to be true in many cases for myself as well. He said that when he makes a decision based on intra-day price action, more often than not he finds himself selling at the low of the day, and he has decided that it is better to ride out the rocky days, get the closing price, and then if things look bad based on the closing price, get out at the open the next day. ------------------------------------------------------------------------------- From: patrick.wahl@unpcbbs.cts.com (Patrick Wahl) Subject: Re: [CANSLIM] Bad Call? Date: 07 Dec 1996 16:56:00 GMT ST>From: "tom worley" ST>Good comments, Patrick, esp concerning studying the charts and knowing ST>where the base is. I don't entirely agree with holding on in a sharp down ST>day just because you have a 20% gain. The point of moving your stops up as ST>the stock appreciates is to protect your profit. If you then enlarge the ST>range you give the stock, you risk losing a bigger part of your Initially your stop is to preserve your capital. You want to keep losses small. After a certain price increase, you are in the position of protecting profits. I still have the most difficulty deciding when to exit a profitable stock. But I think 8 percent is too tight a stop on a profitable stock. Once you are in the fortunate position of owning a profitable stock, I believe you can afford to be a little looser with the stops in the hopes of getting a big gainer. A lot of this depends on a persons personal investing style, I suppose. At least one thing that I am beginning to think is useful is to note how rapid the price runup is. Stocks that just keep inching along seem less likely to pull a quick reversal than those that shoot up. A couple of recent rockets that are starting to look like they are in trouble are Safeskin and Mastec. So I suppose you have to use stops on a stock by stock basis, adjusting them to suit the personality of the stock. I just was reading a book by Neil Weintraub, a Chicago floor trader, and he said the saying they have in Chicago is "buy a market that creeps up, sell one that leaps up". The leaper is a sign of overzealous public speculation. I think the same thing can be applied to individual stocks. ------------------------------------------------------------------------------- From: jeff@scrooge.idec.sdl.usu.edu (Jeff Salisbury) Subject: [CANSLIM] Software question Date: 09 Dec 1996 14:01:39 -0600 --- Forwarded mail from MMLEUN@ccmail.monsanto.com To all, I am getting started with Technical Analysis and I am very interested in the CANSLIM process. I had read O'Neil's book and I am considering purchasing some software for Technical Analysis. Do you have any suggestions on which software to use ? I heard that Superchart and Telechart are good software. Any idea on how much that will cost? Can anyone share with me their success stories? Also, any recommended reading for new beginner? I appreciate the help! Thanks! Martina ---End of forwarded mail from MMLEUN@ccmail.monsanto.com ------------------------------------------------------------------------------- From: Craig Griffin Subject: Re: [CANSLIM] Software question Date: 09 Dec 1996 23:49:01 GMT Jeff, Season's greetings. I use Quotes Plus. I think it's about $30 to startup and then $12.95/month for daily updates for 2 years of data for the entire market (all stocks on the NYSE, ASE, NASDAQ). It comes with a basic charting package which I personally like better than Telechart's, partially because it is Windows based (Telechart is DOS). It also will automatically adjust splits for you, which TC2000 does not do unless you get the full market CD-Rom package at about $45 / month. Both packages have the ability to write scan functions and scan your database for new high's, moving average crossovers, etc (and both come with several sample scans already set to go). Both packages use a proprietary data format but can be converted to Metastock format. Both Metastock and Supercharts can read Metastock format data. I have no experience with either package, although I did just purchase a copy of Supercharts, but have not yet installed it. From reading posts on the internet, I understand that Metastock is somewhat easier to use and has better documentation, but many people prefer Supercharts once they are used to it. Both have suggested retail prices in the $200-$300 range, but are almost always available at a discount of at least $50. I personally believe that the charting software that comes with Quotes Plus or TC2000 will be quite adequate for you for a while (at least they have been for me for the last few years). Try one of these out and then if you find you outgrow it, you can "upgrade" to one of the more expensive packages. As I said, I personally prefer Quotes Plus. Their WWW address is http://www.webcom.com/~quotes ... you can download a fully functional demo version of their software to take a look at it. Best regards, Craig ------------------------------------------------------------------------------- From: OWENTIME@delphi.com Subject: Re: [CANSLIM] Software question Date: 09 Dec 1996 22:20:45 -0500 (EST) Re: software companion programs for investors; there are so many but.., My only advice after you look at the zillions of software programs out there and try downloading things from sites on the net with stats.., just be real cautious until the market corrects a bit between now and probably the middle of February. The HO HO HO Santa routine that Chairman Greenspan conducted at the end of last week was a terrific success: staving off a serious crash by delivering X-mas goodies to all with the nice little rally this week; so yes, there is a Santa Claus, but he may well do what he says he will do and tighten things up a bit. A slower economy Well, anyway good luck with the technology but remember to be real cautious right about now. If this is a disappointing X-mas from the retailer perspective, and too many people are maxxed out on credit cards, and there are one or two negative news cycles early in the winter, things might change investor eupohoria a bit. ------------------------------------------------------------------------------- From: OWENTIME@delphi.com Subject: Re: [CANSLIM] Bad Call? Date: 09 Dec 1996 22:26:17 -0500 (EST) I think small investors always get mashed in volume sell offs; not only are they a non existant priority, but the shear volume of transactions makes gauging a sell like that very difficult and do much the happen stance of how many phone lines are up for calls at the brokerage house one has selected. The real savings in selecting a broker is not the $10 or $20 difference between different brokerage houses, rather who can handle volume during sell offs. ------------------------------------------------------------------------------- From: patrick.wahl@unpcbbs.cts.com (Patrick Wahl) Subject: [CANSLIM] Software questi Date: 09 Dec 1996 12:15:00 GMT JE>From: jeff@scrooge.idec.sdl.usu.edu (Jeff Salisbury) JE>Subject: [CANSLIM] Software question JE> I am getting started with Technical Analysis and I am very JE> interested in the CANSLIM process. I had read O'Neil's book and I am JE> considering purchasing some software for Technical Analysis. Do you JE> have any suggestions on which software to use ? I heard that JE> Superchart and Telechart are good software. Any idea on how much that JE> will cost? Can anyone share with me their success stories? Also, any JE> recommended reading for new beginner? I appreciate the help! Thanks! I have used Telechart 2000 for 5 years and find it adequate. Just so you know that I don't use it only because I don't know any better, I also have Metastock, but still use Telechart for my stocks. The things like Supercharts and Metastock are for people that are performing more sophisticated TA on stocks, using ADX indicators, RSI and stochastics and so on. To me those things are not helpful in picking stocks. Rather, you want to screen them by the usual CANSLIM criteria, find the best candidates, then put them in a watch list and wait for breakouts. The hard part for a new person at this is going to be finding candidates, and learning to be patient and wait for things to set up with familiar chart patterns. Telechart costs about $29, 39 cents per year of stock data, 1/2 cent per day to update data, pretty reasonable. Supercharts seems like it is around $295, Metastock is $345. Stick with Telechart for starters. If you do get it, drop a note here and I will try to point out a few past charts that contain the sort of patterns I look at. And yes, you can make money at this if you keep plugging away at it, but it takes time and looking at lots of charts. I still seem to be learning things along the way. ------------------------------------------------------------------------------- From: patrick.wahl@unpcbbs.cts.com (Patrick Wahl) Subject: Re: [CANSLIM] Bad Call? Date: 09 Dec 1996 12:13:00 GMT CA>From: Craig Griffin CA>Date: Sat, 7 Dec 1996 17:17:41 GMT CA>Subject: Re: [CANSLIM] Bad Call? CA> I made a tidy profit buying the breakout and selling on the day with heavy CA>volume and no further upside progress (distribution), as many of you know. CA>Just as a review, you cannot read the selling rules on pages 103 to 108 in CA>O'Neils book too many times. If they do not make sense at first, just keep CA>comparing them to your trades and the action in your stocks (in the chapter Thanks for the notes on MASX. I've been watching it since it broke out and have to say that I don't think my timing on selling it (had I bought it) would have been nearly as accurate as yours, so you have inspired me to get back into the O'Neil book and reread the section on selling. ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: [CANSLIM] SGMA (Sigmatron) Date: 10 Dec 1996 12:34:30 EST Bought at 14 7/8 yesterday on 10+ times the avg volume, after they announced great earnings. Nice numbers (90+ 90+ A ; PE=15). Hit 18 today, and wiggles around 17.5 now, again on what is supposed to be a record volume (this am, it is 10 times the avg volume already). I was affraid I bought it too late, but perhaps I didn't. (10% above pivot?) The chart had a nice base around 13.5. After the "Greenspan Friday AM" dip, it took off like a rocket. Negative: Group rank is E but as many here said, there is lots of money seeking technology stocks these days, and this one seems to have been overlooked. (1% institutional ownership, but someone is obviously paying for those 20k shares spikes on the volume chart). I pondered a bit on what the wisemen of the group said lately about acting too soon and I decided to wait for more than two days on this one, and see what happens. ;^) Any advice on this one? Shall I stay on it, or just take my profits and run? (as always) Also, perhaps I acted to hastily with HDCO. In at 37 and 44.5 and out at 45.9. Today it opened at 53 or smth. I still have to learn how to recognize and keep a winner. And this group helps me...a lot! SigmaTron International, Inc. manufactures electronic components, printed circuit board assemblies, and turnkey electronic products. The company primarily provides automatic and manual insertion of components onto printed circuit boards. It offers pin-through-hole and surface mount technology, depending on the requirements of individual customers. Subsidiary EMD Electronics designs and produces electronic components, including coils, high frequency products, toroids, ferrite transformers, and DC to AC inverters, for the parent company and 3rd-party customers. SigmaTron sells its printed circuit boards to OEMs of a wide range of products, including electronic dart boards, industrial electronics, and tanning beds. Cheers, Zoran http://www.seas.rochester.edu:8080/ee/users/zmitrov/home.html P.S. If SGMA doesn't plunge on me, I'm already up 25% on my money since I first started. ------------------------------------------------------------------------------- From: "David F. Cameron" Subject: [CANSLIM] HDCO and stuff Date: 10 Dec 1996 12:15:10 CST Greetings everyone, Next time Zoran makes a serious buy - we should all consider researching it. HDCO continues to climb. It is at 52-1/2 as I post this. The stocks I sold due to the drop precipitated by Greenspan's comments continue to rise. They are both pushing new highs. Sigh... For those of you who can take the emotion completely out of this - I commend you. I guess the reason I'm having a hard time with this is because I usually don't set FIRM stops - I also factor in gut feeling. Sometimes this means I do the classic mistake of saying "gee this is such a good stock - how can it keep dropping..." and hang on for the ride, but sometimes it works ok. THIS time, I listened to the posters in this group, and came to the conclusion that hard stops were better because they took the emotion and the "good stock" factor out of it. Well... now I could use advice. My gut feel was to hang onto those stocks, because I felt the drop was overblown. My actions were to dump them because they got stopped out by a firm stop. Even though the money I lost is less than on some other trades - this one hits harder for the above reason. I'm having a hard time getting back into any trades because deep down I still feel the stocks I picked last week were the best - but can't bring myself to buy them 10% higher than I just sold them 2 days ago - especially since I took a net 8% loss on them. My questions are (after this long-winded post): 1. Given that I believe one MUST trade in accordance with one's personality - can anyone suggest how I can shake this feeling I illustrated in the last paragraph? 2. Those of you who advocate FIRM stops - do you ever go to gut feel. If so, when? If not, do events like this bother you. Thanks, Dave "almost feeling like a novice again" Cameron dcameron@harper.cc.il.us ------------------------------------------------------------------------------- From: Craig Griffin Subject: Re: [CANSLIM] HDCO and stuff Date: 10 Dec 1996 21:10:17 GMT At 12:15 PM 12/10/96 CST, you wrote: >Next time Zoran makes a serious buy - we should all consider >researching it. HDCO continues to climb. It is at >52-1/2 as I post this. Agree with that sentiment, but only if we can get it within 10% of its break point. Looks like he has hooked another good one with SGMA. Congratulations Zoran! And your purchase at up 10% looks like an ok buy to me, esp. given it's action today. Sorry I missed it yesterday :). >The stocks I sold due to the drop precipitated by Greenspan's >comments continue to rise. They are both pushing new highs. >Sigh... For those of you who can take the emotion completely >out of this - I commend you. I sure can't do it completely. It is teeth knashing to wait before pulling the trigger when the market gets a blow like it did on Friday. As time goes by I become more able to wait out and separate market news from news directly affecting my stocks. But I have been there, too often. >a hard time with this is because I usually don't set FIRM >stops - I also factor in gut feeling. I believe in firm stops. I once asked O'Neil at a seminar, "what about 5% stops in the situation where I've bought a stock and a day or two later it suddenly drops 10% below my buy point?" He basicly answered that buying right solves 90% of your problems and that either I didn't buy right or the stock was probably not "acting right" before that. And I remember thinking about the couple of examples I had in mind and I was worried because both didn't feel right somehow, and I had been behind by 3 or 4% almost the entire time I had owned them until the big drop that scared me out. Don't really know exactly how this might apply to your situation, especially since the Market got you. But its the best I can do. I would encourage you to re-read some of the excellent responses to your original post (Bad Call). I do factor in gut feeling to this extent, I am willing to wait until the end of the trading day to execute my stop in many situations. My stop is "soft" to that degree. I do not put in stop loss orders with my broker, because too often, they drop the stock down, take me out, and then take the stock back up. I do however, look at the stop at the end of the day, and if it is hit, I sell at 3:45pm or whatever. It has sometimes bitten me to do that, but I have found it to be much cheaper than the alternative (ie. no firm stop). For example, I sold MRVC last year at about a split adjusted 6 1/2 to avoid letting a 25% profit turn into a loss. Then after it formed a base and broke out again, I couldn't bring myself to buy it (24 1/5 yesterday). O'Neil and Ryan say that one should divorce oneself from earlier ownership when buying a stock, and look at it with fresh eyes (sounds like Zen). It is HARD to do. A far worse example is that I bought KARE earlier this year on a breakout at around 19.25 and am still holding 1/2 of it at 12.25. (Fortunately, I bought only about 1/3 of a position for some reason). This (and other similar experiences that I have had) is why I believe in buying insurance via "firm stops": ie. a red line below which I will always sell "at the close". Some stocks simply are too volatile for CANSLIM, I think, that is why tight chart patterns are important. I bought PRIA on the appearance of a b/o and after good earnings (but not stellar ones) got stopped out. The stock gapped way down on the open and I waited most of the day to choose my exit point (which was near the high for the day). So here is another example of not selling instantly when the stop is hit. There are other times when that is appropriate, I think, but it usually has to do with really bad news on the stock. Note by the way that PRIA did the following, dropped another 10-15% from where I sold it (and I sold on about a 5% stop), and then turned and tighted up and broke out over the next couple of weeks. But you can never predict which it will be, a recovery or down and dead money like KARE is. (And PRIA was too wide and loose, I should have never bought it). >My actions were to dump them because they got stopped out >by a firm stop. Even though the money I lost is less >than on some other trades - this one hits harder for the >above reason. I'm having a hard time getting back into >any trades because deep down I still feel the stocks I >picked last week were the best - but can't bring myself to >buy them 10% higher than I just sold them 2 days ago - >especially since I took a net 8% loss on them. > And CANSLIM says that you should not buy them 10% past the breakout (unless on a 10 day moving average bounce, which is a bit of a trick and I have never personally tried it.) But, no one here can tell you how rigorously to apply CANSLIM to your own trading style. I do believe that you have partly "fallen in love" with those stocks. At any rate, if you think they are the "best", it's not CANSLIM that's urging you to own them. CANSLIM says you should have been looking for other stocks such as Zoran has found, try to catch a 25 or 30% profit, maybe sell 1/2, maybe all ... and move on looking for the next one. O'Neil says "there are no good stocks. They are all bad, sooner or later." So if you are buying on a fundamental basis only, without applying the technical rules of CANSLIM as well, then you are outside anything I can really address. The Motley Fools and Peter Lynch both seem to do well with this (more fundamental only) approach over the long haul. I don't know, really, I believe CANSLIM is the way to go of course, but it is hard. It takes discipline, focus, and emotional balance. >My questions are (after this long-winded post): (I second that sentiment, but I am trying to share my thinking as completely as possible ... only way I know to try to help). > >1. Given that I believe one MUST trade in accordance with > one's personality - can anyone suggest how I can shake > this feeling I illustrated in the last paragraph? I am leery of making any suggestion, there is now the real fear for me that the stocks you are referring too will move up 50% in the next couple of months if I say "move on, find other good candidates, there are new ones coming along all the time." or that they will drop precipitously if I say "trust your feelings and look to get back in." CANSLIM says look for new candidates, and buy these after they form a new base and break out again, unless the others trade back down on low volume and give you a second chance to buy. Lynch and Motley Fool say buy 'em and hold 'em after you know them from doing your fundamental research, but they don't buy breakouts and use stops of 7% either. It takes some soul searching to determine your trading style. CANSLIM is a style that requires that one constantly accept one's mistakes and move on, or briefly celebrate one's success and move on. And it seems like I make at least 2 mistakes for every one success. But I do believe that executing exactly right will produce superior returns. That's what I am after, but have only achieved it 2 years out of four. But I believe my failure is because I am a slow learner. Finally I'm getting there though, starting to pull all of the pieces together with understanding and learn to follow the plan with discipline. > >2. Those of you who advocate FIRM stops - do you ever go > to gut feel. If so, when? If not, do events like > this bother you. Yes, intraday. See above. Hope this helps, Dave. Its the best I can do. Best regards, Craig PS. I am going to mostly lurking for a while because of a time crunch on some things. Blessings of the Season to all! ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] Bad Call? Date: 10 Dec 1996 18:55:21 -0500 I agree to the extent that the "small investor": a) is dealing with a discount svc and/or via the net b) is either not sufficiently knowledgable on his own or has a broker who is not sufficiently knowledgable to plan a course of action (panic sell, hold on tightly, consider it a kmart blue lite special) In the first case, too many comments I have heard indicate to me that discount houses can make a profit w/discounted (often deeply) commissions by reducing the level of service. Sadly, one of their areas of reduced service is the number of lines into the firm either by phone or net and/or by executing on the third mkt vs primary mkt. In times of chaos, both are swamped. In the second case, without a plan you either make no decision (which will usually be a mistake) or you will run with the herd, which is also likely to be a mistake (either because you sell at the day's low prior to a temporary rebound or because selling was the wrong decision at any price that day). On the other hand, even dealing w/full svc firm does not guarantee access in chaos. Ask your broker, if you are using one, if there is a direct line to him bypassing the switchboard (which may be swamped). At least this way you have two ways of calling him. In addition, he may have a beeper, cellular, or email you can use (often these are not given out other than to best clients, altho never hurts to ask). If you can get thru to your firm's switchboard, most firms have a broker of the day (often may be a junior rep with few clients) who can take your call if you just want to place a sell order. Or you can ask for the manager, that can also get you thru to someone who should be knowledgable about what is going on. One advantage of dealing with a full svc firm is that they should be computer linked (as mine is thru Bear Stearns) directly with the floor specialist. Execution reports last Friday were online within a matter of several minutes on market orders. On OTC trades, I have speed dial to 3 different broker-dealers where I can place the order by phone, or I can put it via computer to Bear's OTC desk. Use last Friday as a dress rehearsal/wake up call if you had problems w/access. Try some of the above suggestions, ask questions if you had problems w/access to the mkt cuz there should not be access problems. The one problem that realistically can't be elimiinated is that of the fund mgr dumping a qtr mil shares as a block. I have no easy answers to that one. good luck tom w ---------- > From: OWENTIME@delphi.com > To: canslim@xmission.com > Subject: Re: [CANSLIM] Bad Call? > Date: Monday, December 09, 1996 10:26 PM > > I think small investors always get mashed in volume sell offs; not only > are they a non existant priority, but the shear volume of transactions > makes gauging a sell like that very difficult and do much the > happen stance of how many phone lines are up for calls at the > brokerage house one has selected. The real savings in selecting a broker > is not the $10 or $20 difference between different brokerage houses, > rather who can handle volume during sell offs. ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] SGMA (Sigmatron) Date: 10 Dec 1996 19:20:37 -0500 Personally, this tech mkt is so volatile that I would be inclined to day trade. Today's action in Gateway 2000 (which started breaking out yesterday) is good example. Several brokers in my office were buying it for their own personal acct today at around 64 (another new high) but it ended up at 58.75, down about 4 pts for the day). It's a vicious world out there, and I am not embarrassed to admit if I hit one right for a 1 or 2 day trade, I would probably take my profits and say thank you. Don't want to influence you cuz I am still playing the small caps for the most part so don't have any real money on the table on the big caps, but there's never anything wrong in making a profit fast, even if it goes even higher. good luck tom w ---------- > From: Zoran Mitrovski > To: canslim@xmission.com > Cc: zmitrov@ee.rochester.edu > Subject: [CANSLIM] SGMA (Sigmatron) > Date: Tuesday, December 10, 1996 12:34 PM > > > Bought at 14 7/8 yesterday on 10+ times the avg volume, > after they announced great earnings. > Nice numbers (90+ 90+ A ; PE=15). > > Hit 18 today, and wiggles around 17.5 now, again on > what is supposed to be a record volume (this am, it is > 10 times the avg volume already). I was affraid I bought > it too late, but perhaps I didn't. (10% above pivot?) > The chart had a nice base around 13.5. After the > "Greenspan Friday AM" dip, it took off like a rocket. > > Negative: Group rank is E but as many here said, > there is lots of money seeking technology stocks > these days, and this one seems to have been overlooked. > (1% institutional ownership, but someone is obviously > paying for those 20k shares spikes on the volume chart). > > I pondered a bit on what the wisemen of the group > said lately about acting too soon and I decided to > wait for more than two days on this one, and see what > happens. ;^) > > Any advice on this one? > Shall I stay on it, or just take my profits and run? > (as always) > > Also, perhaps I acted to hastily with HDCO. In at 37 and > 44.5 and out at 45.9. Today it opened at 53 or smth. > I still have to learn how to recognize and keep a winner. > And this group helps me...a lot! > > SigmaTron International, Inc. manufactures electronic > components, printed circuit board assemblies, and turnkey > electronic products. The company primarily provides > automatic and manual insertion of components onto printed > circuit boards. It offers pin-through-hole and surface mount > technology, depending on the requirements of individual > customers. Subsidiary EMD Electronics designs and > produces electronic components, including coils, high > frequency products, toroids, ferrite transformers, and DC to > AC inverters, for the parent company and 3rd-party > customers. SigmaTron sells its printed circuit boards to > OEMs of a wide range of products, including electronic dart > boards, industrial electronics, and tanning beds. > > > Cheers, > Zoran > http://www.seas.rochester.edu:8080/ee/users/zmitrov/home.html > > P.S. If SGMA doesn't plunge on me, I'm already up 25% on my > money since I first started. > ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] HDCO and stuff Date: 10 Dec 1996 19:32:25 -0500 David, what you did was not a mistake, you followed the rules, and over time and on average that will work to your favor. On the other hand, you missed several signals that could have justified violating the rules including not balancing Greenspan's words (actually the commentators interpretation of his words) against the unemployment nrs; and not spotting the reversal in the bond mkt prior to the opening of the equity mkt. Leaving in hard stops (which were likely to be violated by a gap down, thus executing you well below your stop nr) could not have been easily avoided in the absence of these two major signals. When I have stop orders in place (and no, I don't always use them) I will leave them in place in a reasonably orderly mkt, but am likely to kill them in a chaotic one. Why? Because I want to have some idea of what my execution price will likely be. I will have also chosen my stop nr based on bases, resistance, 50/200 dma, etc and barring news specific to the stock I am holding, will want to sell if/when THAT stock trades into that nr. Obviously, if bad news about that stock comes out, I take my lumps and move on. You had one of those days we are supposed to learn from. What you know have to do is to learn, and move forward. That may mean staying in cash for awhile till the mkt becomes, to you, more predictable. You may want to look at less volatile, more value based stocks. You may even just want to play some on paper till you regain your confidence. But the bottom line is that you should still apply CANSLIM principles to your reviews. It's not a perfect system, just a tool, a guide, to help us increase the likelihood that we will be more right than wrong. good luck tom w ---------- > From: David F. Cameron > To: canslim@xmission.com > Subject: [CANSLIM] HDCO and stuff > Date: Tuesday, December 10, 1996 1:15 PM > > Greetings everyone, > > Next time Zoran makes a serious buy - we should all consider > researching it. HDCO continues to climb. It is at > 52-1/2 as I post this. > > The stocks I sold due to the drop precipitated by Greenspan's > comments continue to rise. They are both pushing new highs. > Sigh... For those of you who can take the emotion completely > out of this - I commend you. I guess the reason I'm having > a hard time with this is because I usually don't set FIRM > stops - I also factor in gut feeling. Sometimes this means > I do the classic mistake of saying "gee this is such a good > stock - how can it keep dropping..." and hang on for the ride, > but sometimes it works ok. THIS time, I listened > to the posters in this group, and came to the conclusion that > hard stops were better because they took the emotion and the > "good stock" factor out of it. > > Well... now I could use advice. My gut feel was to hang > onto those stocks, because I felt the drop was overblown. > My actions were to dump them because they got stopped out > by a firm stop. Even though the money I lost is less > than on some other trades - this one hits harder for the > above reason. I'm having a hard time getting back into > any trades because deep down I still feel the stocks I > picked last week were the best - but can't bring myself to > buy them 10% higher than I just sold them 2 days ago - > especially since I took a net 8% loss on them. > > My questions are (after this long-winded post): > > 1. Given that I believe one MUST trade in accordance with > one's personality - can anyone suggest how I can shake > this feeling I illustrated in the last paragraph? > > 2. Those of you who advocate FIRM stops - do you ever go > to gut feel. If so, when? If not, do events like > this bother you. > > Thanks, > > Dave "almost feeling like a novice again" Cameron > dcameron@harper.cc.il.us ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] HDCO and stuff Date: 10 Dec 1996 20:23:11 -0500 Excellent response, thanks for taking the time, Craig. I would like to repeat two points: first, soft stops as Craig is using it (esp in a chaotic mkt) vs hard stops. What Craig is doing is maintaining some control without losing sight of the rules. He is using judgement, and my experience from both being a broker as well as entering orders for other brokers is that this will usually be better than blindly following rules/system/someone else's decisions. Second, as to the market being "manipulated" to hit your stops, take you out, then rally back on up, I must confess to having witnessed this on more than one occasion when I had just entered a batch of "stop" orders a pt or two below the mkt. The best (worst?) case example that I can cite is Diana (DNA) where I have seen the stock halt briefly after just entering 8 or 9 stop orders 1.5 to 2 pts below the stock, seen it reopen below the limit with immediate execution of the stop orders with a gap down from the limit nr, then move back several pts higher than the limit. This is not to say that limit orders are all bad, but showing your hand to the floor specialist can, in some cases, be costly. Every buy should be approached as if it was an entirely new stock, even if the symbol "happens" to be the same as one you have previously traded. Don't rely on past experience or charts or knowledge to aid your judgement, start from scratch and do it all over again. Just one order entry clerk's observation. tom w ---------- > From: Craig Griffin > To: canslim@xmission.com > Subject: Re: [CANSLIM] HDCO and stuff > Date: Tuesday, December 10, 1996 4:10 PM > > I do factor in gut feeling to this extent, I am willing to wait until the > end of the trading day to execute my stop in many situations. My stop is > "soft" to that degree. I do not put in stop loss orders with my broker, > because too often, they drop the stock down, take me out, and then take the > stock back up. ------------------------------------------------------------------------------- From: "tom worley" Subject: [CANSLIM] My market comments postings Date: 10 Dec 1996 20:35:49 -0500 I have posted some occasional "market comments" spiels with little feedback so far. I realize I have a somewhat warped view as a broker/investor/back office-order entry flunkie, but would be interested in knowing if (a) I am wasting your time and space in your inbox or (b) I'm doing anyone any good at least in educating and presenting a different (often contrarian) point of view. I'm not looking for feedback to my self esteem, as you already painfully know, I love to respond and share my opinion, just want to see if I am being of any help. Feedback welcome, advice/suggestions will be honestly considered. tom w ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: Re: [CANSLIM] My market comments postings Date: 10 Dec 1996 21:39:41 -0500 (EST) Tom wrote: .. > I'm not looking for feedback to my self esteem, as you already painfully > know, I love to respond and share my opinion, just want to see if I am > being of any help. Yeah, right. You've been a hell of a lot help to many of us here (Or perhaps I should speak for myself), and you know it. ;^) Once again, Tom. Thanks a billion!! Each of our green salads could always use some of your (r)(s)easoning. > Feedback welcome, advice/suggestions will be honestly considered. > > tom w Cheers, Zoran ;^) ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: Re: [CANSLIM] SGMA (Sigmatron) Date: 10 Dec 1996 21:52:39 -0500 (EST) Tom wrote: > Personally, this tech mkt is so volatile that I would be inclined to day > trade. Tom, why are you doing this to me? Is your heart made of stone? The moment I make a commitment to myself to hold a stock for more than two days you say that I should sell the damn thing. ;^) Do you know what that can do to a novice investor/speculator's mind and future development? ;^) Dammit, I'm gonna be watching SGMA every half an hour tomorrow, (Btw, I get real time quotes through Datek now. It's GREAT!) not knowing what to do every minute of the day. The way it acted today (on a 1600% volume increase, so look for it at the top of IBD's list of % increases), I have a feeling that tomorrow it's gonna open with a gap. Up or down, but almost sure with a gap. There's thousands of guys tonite asking themselves whether they should say "thank you" to the Lord of SGMA and get out or they should perhaps sit to see whether there is more fuel in the rocket. Today, it was 50-50 so almost the whole day, the stock based around 17-17.5 Whatever... Cheers, Zoran ;^) ------------------------------------------------------------------------------- From: Craig Griffin Subject: Re: [CANSLIM] My market comments postings Date: 11 Dec 1996 02:57:45 GMT At 08:35 PM 12/10/96 -0500, you wrote: >I have posted some occasional "market comments" spiels with little feedback >so far. Hi Tom, Couldn't resist responding to this. I for one quite enjoy and appreciate your market comments and other posts tremendously. There is rarely one from which I do not learn something or which doesn't get me to thinking. Thanks for taking the time! For instance I found the posting just prior to this one that began: >David, what you did was not a mistake, you followed the rules, and over >time and on average that will work to your favor. to be extremely astute and to the point. Thanks again. ... Now back to lurking. Best regards, Craig ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: Re: [CANSLIM] HDCO and stuff Date: 10 Dec 1996 22:09:50 -0500 (EST) Tom wrote: .. > Second, as to the market being "manipulated" to hit your stops, take you > out, then rally back on up, I must confess to having witnessed this on more > than one occasion when I had just entered a batch of "stop" orders a pt or > two below the mkt. .. > This is not to say that limit orders are all bad, but showing your hand to > the floor specialist can, in some cases, be costly. Waidaminit here guys! Are you saying that someone out there knows of my STOP order when I have placed it? I thought it was strictly confined to the domain of my broker (E*Trade in my case), and it only went out in public when it was sent to be executed. I have a huge space of ignorance here that needs a quick fill. If stop orders indeed influence the price movement then that's utterly unfair. Obviously they can scalp you in many different ways on the Street. While at it. Any comments on the Busines Week cover article on the involvment of the Mob on Wall Street? The writer sure had some huge balls (or is crazy for a Pulizer or smth) to do the digging and to come out with an article like that. Unbelievable stuff. Scared the s**t out of me! Cheers, Zoran ;^) ------------------------------------------------------------------------------- From: rcstein@airmail.net (Richard S) Subject: Re: [CANSLIM] HDCO and stuff Date: 11 Dec 1996 05:16:00 GMT On Tue, 10 Dec 96 12:15:10 CST, you wrote: ::=20 :: Well... now I could use advice. My gut feel was to hang :: onto those stocks, because I felt the drop was overblown. :: My actions were to dump them because they got stopped out :: by a firm stop. Even though the money I lost is less :: than on some other trades - this one hits harder for the :: above reason. I'm having a hard time getting back into=20 :: any trades because deep down I still feel the stocks I :: picked last week were the best - but can't bring myself to :: buy them 10% higher than I just sold them 2 days ago - :: especially since I took a net 8% loss on them. ::=20 :: My questions are (after this long-winded post): OK, here is my opinion, maybe it will generate some discussion. ::=20 :: 1. Given that I believe one MUST trade in accordance with :: one's personality - can anyone suggest how I can shake :: this feeling I illustrated in the last paragraph? I think first you need to ask yourself if you are upset because you lost money, or because you think you stop was too tight. The stop=20 decision must be a logical one, based on good research, analysis, and maybe a little gut feeling thrown in. When one executes automatically, that is what you placed it there for. When they execute earlier than I would like and I lose money, I just look at it as a cost of doing business, kinda like paying the broker fee. Since the stock has rebounded, it looks/feels like a bad decision, but if it had continued to drop to a 30% loss and not rebounded, then you would be saying " thank God I had my stops in place". A stop is kinda like buying car insurance. Every month I mail off my check, and every month I think about th fact that I have not needed my insurance for the last 10 years. The insurance companies are getting rich off of me. :) BUT,,, sure as heck if I dropped it, I would be involved in a wreck, and then I would be crying in my beer saying " I should have know better than to drop that Insurance." Thats all a stop is, insurance against losing principal or profit, just a cost of doing business but I don't think we can live without them any more than we can live without our car or health insurance. ::=20 :: 2. Those of you who advocate FIRM stops - do you ever go :: to gut feel. If so, when? If not, do events like :: this bother you. I do go with the gut feel to some degree, and thats because I cannot look at the situation from a completely unemotional standpoint, which may be one of the reasons that all my stocks aren't winners. But, my gut feel is in the area of where the stop should be, 5%, 8%, 10% or even 15%. I try and use some logic, but the final decision has some gut feelings too, but I always have the stops somewhere, I'll never forget the burnings I received in the past when I didn't use stops at all. One thing I have never done, is to lower my stop. I raise them as my profit increases, to protect the profit, but so far, once I have decided on a stop, I either leave it or raise it. And yes, events like this do bother me, but not as much as they would have if it had fallen 20-30% before the stop kicked in. I have a tendancy to fall in love with some stocks, and when I lose a good one, and I've got a couple I'm real worried about now, I just keep telling myself that it was a good decision when I placed the stop, and its still a good decision, even if things didn't work out the way I had hoped.=20 Hang in there, these are all learning experiences, even if we can't always understand the lesson. :) Richard... ------------------------------------------------------------------------------- From: "Dean Edwards" Subject: Fw: [CANSLIM] My market comments postings Date: 11 Dec 1996 18:37:32 +1300 I appreciate the comments you make about the market. I'm always lost for words when it comes to writing. I would imagine that a lot time and thought has gone into each post. Knowledge is wisdom and there have been some real "pearls of wisdom " about the market. I for one enjoy your posts. These are general comments to everyone. Someone who is posting something, is obviously saying something that they feel is important . Otherwise they wouldn't post it. For me it adds a new dimension. I am seeing through another person's eyes what they see. It doesn't matter if someone is right or wrong. It is still interesting to get another persons perspective. That person might have seen something that you might have missed. For example in psychology, a person can be shown a picture of a face and they will either see a young woman or an old woman depending on their perspective. That is why I always strive to be flexible and never rigid in my thinking. Anything about CANSLIM will always have my undivided attention. Regards Dean ---------- > From: tom worley > To: CANSLIM > Subject: [CANSLIM] My market comments postings > Date: Wednesday, December 11, 1996 2:35 PM > > I have posted some occasional "market comments" spiels with little feedback > so far. I realize I have a somewhat warped view as a broker/investor/back > office-order entry flunkie, but would be interested in knowing if (a) I am > wasting your time and space in your inbox or (b) I'm doing anyone any good > at least in educating and presenting a different (often contrarian) point > of view. > > I'm not looking for feedback to my self esteem, as you already painfully > know, I love to respond and share my opinion, just want to see if I am > being of any help. > > Feedback welcome, advice/suggestions will be honestly considered. > > tom w ------------------------------------------------------------------------------- From: rcstein@airmail.net (Richard S) Subject: Re: [CANSLIM] My market comments postings Date: 11 Dec 1996 05:53:04 GMT On Tue, 10 Dec 1996 20:35:49 -0500, you wrote: I for one greatly appreciate your insight into the market in general, and,also the specific areas that you sometime address. I am still a Newbie, and I view your post as the voice of experience and most of the time I agree with them completely. But, agree or not, they always make me think about this art of investing, and that's good. I will add, that I read every post in this group, and the information and insight of all the posters has been very helpful to my education, and I hope everyone keeps up the postings. =20 :: I have posted some occasional "market comments" spiels with little = feedback :: so far. I realize I have a somewhat warped view as a = broker/investor/back :: office-order entry flunkie, but would be interested in knowing if (a) = I am :: wasting your time and space in your inbox or (b) I'm doing anyone any = good :: at least in educating and presenting a different (often contrarian) = point :: of view.=20 ::=20 ------------------------------------------------------------------------------- From: Michael A Langston Subject: re: [CANSLIM] My market comments postings Date: 10 Dec 1996 23:38:41 -0500 > Feedback welcome, advice/suggestions will be honestly considered. just keep calling em like you see em tom, i appreciate the time you take to post mike ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] SGMA (Sigmatron) Date: 11 Dec 1996 06:02:19 -0500 Zoran, I'm really not trying to play with your head, so far you are making better choices than me. That's why I said "I" would be inclined to day trade. Sometimes a quick hitandrun profit is a good confidence builder, as well as an asset builder. Monday's 85 pt gain on the Dow 30, as well as the strength in NASDAQ, was no surprise to me. Once again we also had the opportunity to see how Japan did Sun nite and Europe mon morning before our mkt opened. Yesterday's strength was good to see, however I did not anticipate the almost total selloff in the late afternoon. Once again, I strongly suspect computer driven sell programs for most of it (of course, they may have also created the run up). Point is, the mkt is still not behaving real predictably. If a particular stock, however, behaves as you expect, then stay with your game plan. Just remember each stock, and each day, is a new one. Just because HDCO did so well after you sold for a nice profit doesn't mean the next one will follow the same pattern. Good luck tom w ---------- > From: Zoran Mitrovski > To: canslim@xmission.com > Cc: Zoran Mitrovski > Subject: Re: [CANSLIM] SGMA (Sigmatron) > Date: Tuesday, December 10, 1996 9:52 PM > > Tom wrote: > > > Personally, this tech mkt is so volatile that I would be inclined to day > > trade. > > Tom, why are you doing this to me? Is your heart made of stone? > The moment I make a commitment to myself to hold a stock for > more than two days you say that I should sell the damn thing. ;^) > Do you know what that can do to a novice investor/speculator's > mind and future development? ;^) ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] HDCO and stuff Date: 11 Dec 1996 06:15:30 -0500 When you place an order of any kind (buy, sell, buy or sell limit, stop, short sell) on a listed security, whether it is a day or GTC, most firms will put that order on an exchange somewhere so it can be represented and executed. I have heard that a lot of discount firms will put the order on the Third market, Midwest exchange, Pacific exchange, etc rather than on the primary mkt (NYSE, AMEX). In those cases, the true specialist (who will likely have the greatest order flow and volume) may not be aware of your specific order, but will be aware of others who may have chosen a similiar limit to yours. This is one reason why I never use a whole dollar limit (try to buy at 1/8 or sell at 7/8) to stay a step away from the pack. The type of manipulation I described, and saw at least twice on Diana, is not a common occurrence. Most stocks will never have it happen. Remember, the specialist, among other things, is charged with maintaining an "orderly market". If caught doing this, he would be out of business. Don't worry about the security of your order, at least until your name ranks in influence with Greenspan, Trump, Gates (hope GATE rebounds today, will see), and a whole bunch of others where their buy or sell actions, if known, would influence a lot of the "herd mentality". What I am emphasizing is to avoid the "herd mentality", have your own plan based on logic, reason, charts, CANSLIM, etc (and not on emotion), then stick to your plan. Don't let others make your decisions for you. Listen to contrarian thoughts, but don't let them act for you, use it to challenge and improve your thinking. good luck tom w ---------- > From: Zoran Mitrovski > To: canslim@xmission.com > Cc: Zoran Mitrovski > Subject: Re: [CANSLIM] HDCO and stuff > Date: Tuesday, December 10, 1996 10:09 PM > > Tom wrote: > .. > > Second, as to the market being "manipulated" to hit your stops, take you > > out, then rally back on up, I must confess to having witnessed this on more > > than one occasion when I had just entered a batch of "stop" orders a pt or > > two below the mkt. > .. > > This is not to say that limit orders are all bad, but showing your hand to > > the floor specialist can, in some cases, be costly. > > Waidaminit here guys! > Are you saying that someone out there knows of my STOP order > when I have placed it? I thought it was strictly confined to the > domain of my broker (E*Trade in my case), and it only went out > in public when it was sent to be executed. ------------------------------------------------------------------------------- From: "tom worley" Subject: [CANSLIM] Fw: North Pole Report Date: 11 Dec 1996 06:29:34 -0500 It's often hard to find humor in the market, but I enjoyed this one I snagged from another group. enjoy tom w ---------- > Subject: FW: North Pole Report > Date: Tue, 10 Dec 1996 20:13:46 -0800 > > BIG NEWS FROM NORTH POLE > > Christmas cutbacks > > The recent announcement that Donner and Blitzen have elected to take > the early reindeer retirement package has triggered a good deal of concern > about whether they will be replaced, and about other restructuring decisions > at the North Pole. Streamlining was required due to the North Pole's loss of > dominance in the season's gift distribution business. Home shopping channels > and mail order catalogues have diminished Santa's market share. He could not > sit idly by and permit further erosion of the profit picture. > > The reindeer downsizing was made possible through the purchase of a > late model Japanese sled for the CEO's annual trip. Improved productivity > from Dasher and Dancer, who summered at the Harvard Business School, is > anticipated. Reduction in reindeer will also lessen airborne environmental > emissions for which the North Pole has received unfavorable press. > > I am pleased to inform you that Rudolph's role will not be disturbed. > Tradition still counts for something at the North Pole. Management denies, > in the strongest possible language, the earlier leak that Rudolph's nose got > that way, not from the cold, but from substance abuse. Calling Rudolph "a > lush who was into the sauce and never did pull his share of the load" was an > unfortunate comment, made by one of Santa's helpers and taken out of context > at a time of year when he is known to be under executive stress. > > As a further restructuring, today's global challenges require the North > Pole to continue to look for better, more competitive steps. Effective > immediately, the following economy measures are to take place in the "Twelve > Days of Christmas" subsidiary: > > - The partridge will be retained, but the pear tree never turned out to > be the cash crop forecasted. It will be replaced by a permanent synthetic tree, > providing considerable savings in maintenance; > > - The two turtle doves represent a redundancy that is simply not cost > effective. In addition, their romance during working hours could not be > condoned. > The positions are therefore eliminated; > > - The three French hens will remain intact. After all, everyone loves > the French. However, as the current hens retire, we may opt for reducing the > number of hens, as their only real function is PR; > > - The four calling birds were replaced by an automated voice mail > system, with a call waiting option. An analysis is underway to determine who > the > birds have been calling, how often and how long they talked; > > - The five golden rings have been put on hold by the Board of Directors. > Maintaining a portfolio based on one commodity could have negative > implications for institutional investors. Diversification into other > precious metals > as well as a mix of T-Bills and high technology stocks appear to be in > order; > > - The six geese-a-laying constitutes a luxury which can no longer be > afforded. It has long been felt that the production rate of one egg per goose > per > day is an example of the decline in productivity. Three geese will be let go, > and an upgrading in the selection procedure by personnel will assure > management that from now on every goose it gets will be more productive; > > - The seven swans-a-swimming is obviously a number chosen in better > times. The function is primarily decorative. Robotic swans are on order. > Plus our IS department can program the new swans to be more active during peak > viewing times. The current swans will be retrained to learn some new strokes > and therefore enhance their outplacement; > > - As you know, the eight maids-a-milking concept has been under heavy > scrutiny by the EEOC. A male/female balance in the workforce is being sought. > The more militant maids consider this a dead-end job with no upward > mobility. Automation of the process may permit the maids to try a-mending, > a-mentoring or a-mulching; > > - Nine ladies dancing has always been an odd number. This function will > be phased out as these individuals grow older and can no longer do the > steps. Also research has shown the current staff is not up to speed with the > popular dance routines and unwilling to retrain; > > - Ten Lords-a-leaping is overkill. The high cost of Lords plus the > expense of international air travel prompted the Compensation Committee to > suggest replacing this group with ten out-of-work congressmen. While leaping > ability may be somewhat sacrificed, the savings are significant because we > expect an oversupply of unemployed congressmen this year; > > - Eleven pipers piping and twelve drummers drumming is a simple case of > the band getting too big. A substitution with a string quartet or even a > one person band with a synthesizer, a cutback on new music and no uniforms will > produce savings which will drop right down to the bottom line; > > We can expect a substantial reduction in assorted people, fowl, animals > and other expenses. Though incomplete, studies indicate that stretching > deliveries over twelve days is inefficient. If we can drop ship in one day, > service levels will be improved. > > Regarding the lawsuit filed by the attorney's association seeking > expansion to include the legal profession ("thirteen lawyers-a-suing") action > is pending and our legal department assures us we are on solid ground. > > Lastly, it is not beyond consideration that deeper cuts may be necessary > in the future to stay competitive. Should that happen, the Board will > request management to scrutinize the Snow White Division to see if seven > dwarfs is the right number. > > Happy Holidays, > Murf > - - - - - > > > > Larry Click clickl@pe.net ------------------------------------------------------------------------------- From: joani@mindspring.com (Joan Sherman) Subject: Re: [CANSLIM] My market comments postings Date: 11 Dec 1996 08:25:58 -0400 tom, write away, joan ------------------------------------------------------------------------------- From: Haw-Jye Shyu Subject: Re: [CANSLIM] SGMA (Sigmatron) Date: 11 Dec 1996 09:04:12 -0500 (EST) Hi Folks: It is scarry for me to hear people talking about day trade. Zoran, I though you are a student. How can you afford to follow the market without sacrficing your study? Unless you do not care about your degree. The average starting salary for a Chemical Engineer BS is low $40K/year. How much of capital you need to play in the market to earn $40k a year? Is there any one here, especially seasoned Canslimist, has been able to make $40K/year with minimum initial captial? If you accept the average pro's can make 15% return/year consistently. To earn 40k/year, you will need an initial captial of $266k. My understanding is that there is no one was able to make a fortune simply by trading stock. Most of the rich people who either run a business or own a business. Just my $0.02 opinion. HJS ----- Begin Included Message ----- From owner-canslim@xmission.com Wed Dec 11 07:08 EST 1996 X-MSMail-Priority: Normal X-Priority: 3 MIME-Version: 1.0 Content-Transfer-Encoding: 7bit Zoran, I'm really not trying to play with your head, so far you are making better choices than me. That's why I said "I" would be inclined to day trade. Sometimes a quick hitandrun profit is a good confidence builder, as well as an asset builder. Monday's 85 pt gain on the Dow 30, as well as the strength in NASDAQ, was no surprise to me. Once again we also had the opportunity to see how Japan did Sun nite and Europe mon morning before our mkt opened. Yesterday's strength was good to see, however I did not anticipate the almost total selloff in the late afternoon. Once again, I strongly suspect computer driven sell programs for most of it (of course, they may have also created the run up). Point is, the mkt is still not behaving real predictably. If a particular stock, however, behaves as you expect, then stay with your game plan. Just remember each stock, and each day, is a new one. Just because HDCO did so well after you sold for a nice profit doesn't mean the next one will follow the same pattern. Good luck tom w ---------- > From: Zoran Mitrovski > To: canslim@xmission.com > Cc: Zoran Mitrovski > Subject: Re: [CANSLIM] SGMA (Sigmatron) > Date: Tuesday, December 10, 1996 9:52 PM > > Tom wrote: > > > Personally, this tech mkt is so volatile that I would be inclined to day > > trade. > > Tom, why are you doing this to me? Is your heart made of stone? > The moment I make a commitment to myself to hold a stock for > more than two days you say that I should sell the damn thing. ;^) > Do you know what that can do to a novice investor/speculator's > mind and future development? ;^) ----- End Included Message ----- ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: Re: [CANSLIM] SGMA (Sigmatron) Date: 11 Dec 1996 12:28:55 -0500 (EST) HJS wrote: > It is scarry for me to hear people talking about day trade. > Zoran, I though you are a student. How can you afford to follow the market > without sacrficing your study? Unless you do not care about your degree. > The average starting salary for a Chemical Engineer BS is low $40K/year. > How much of capital you need to play in the market to earn $40k a year? > > Is there any one here, especially seasoned Canslimist, has been able > to make $40K/year with minimum initial captial? > > If you accept the average pro's can make 15% return/year consistently. To > earn 40k/year, you will need an initial captial of $266k. > > My understanding is that there is no one was able to make a fortune simply > by trading stock. Most of the rich people who either run a business or own > a business. > > Just my $0.02 opinion. And that is one very good opinion, too. See it would be stupid for me to say that this investing excursion of mine does not influence my studies in any way, but the way I see life, it is all a matter of optimizing your future prospects. Even if this work and learning prolongs my studies for a semester or so, I would like to think that this would be time/money well spent. On the studies...I am done with my coursework, and I have only my research to think about (PhD in Signal Processing and Communications). Of course, the influence works both ways. My studies DO influence my investment decisions too. For example, I just sold SGMA at what is probably going to be the days low 16 5/8 this morning. I just took the 12% profit in two days and plan to forget about the market and stocks all day today, perhaps even till the end of the week. I figured, that was the optimal solution given the circumstances around me. This way I can still work on my paper today knowing that my cash (and profits ;^)) are safe on my account. Getting my degree a day faster was likely to give me more profits than SGMA would today. Call it however you want, but as many here said: You have to make decisions that optimize YOUR overall story. For me, what you call day trading, actually enables me to be calm while I do my research. There is "stock time" and "school time" (OK, "my girlfriend time", too) in my life and I have found a method wich allows for minimum aliasing between them. Other things work for other people, I'm sure. Doing consulting work also slows down my studies, but when put into the overal equation I think it is also one very good "investment" of mine. You cannot put a price on the things you learn, people you meet, and experiences you go through. If I was to be locked into a room for 4 years in order to get my degree as fast as possible, that piece of paper would be almost a worthless piece of my life story, and a fairly shabby guarantee of a success in my life. I'm going home this Christmas to see my family that I love so much. That slows my studies, too, but there is no price to the feelings and the hapiness that everyone is going to experience when we spend all that time together. Not everything can be measured by $/year. As for your statement that noone has become rich from investing, I'd recommend you the book "Market Wizards" by Jack Shwager. I'm sure it is going to be a very enlightening experience for you. I believe that there are thousands of people far from the spotlights, who had figured out their optimal balances in their lives, live comfortable lives and don't give a damn if they were not on the Forbes 500 list. If I ever decide to trade for living it is going to be after years of studying and performance measurement, and if the estimates come out to be 40k a year, then I wouldn't even bother. I know of a dosen of mutual funds that can beat that 15% any time. Trivia: If you could double your money each year, $10k would grow to $10 million in 10 years. Cheers, Zoran ;^) P.S. Thanks for the provoking question. I needed these things being reiterated in a structured way myself. ------------------------------------------------------------------------------- From: Dave Finley Subject: [CANSLIM] Online Trading anecdote Date: 11 Dec 1996 15:35:01 -0500 Introduction: I'm a habitual lurker, but it's time to come out of the shadows; when you get unexpected service, ya gotta tell someone. I've studied the market for a year and traded for about 8 months. Most of my trades might be considered aggressive; I'm in this forum to learn more conservative methods for "important money", like an IRA. The specific trade described below (options) certainly isn't CANSLIM related, but there have been a few earlier posts about online brokerages in general and merits of one company versus another. Add this to the opinion database. I placed an order with Lombard Online to buy back some call options I had previously sold, since the price had dropped and I hoped to resell them when the stock rebounds. I mis-entered the order as a "Sell-to-close" rather than a "Buy-to-close". Ten minutes later I got a call from a Lombard broker (Steve) to advise me of my mistake, explain how to avoid it again, and verify my intentions for this specific trade. He also advised me, oh by the way, that the price was down an eighth below my order price, and would I like to place the order directly with him, since the time required to enter it through the www might cause me to miss the new price. Beat me with a stick! This guy called me AT WORK on Lombard's dime, and saved me $50 in the process. Then he placed and confirmed my order on the phone, all within 13 minutes after I placed my original erroneous order. An Electronic TRADEing brokerage I used to use responded to problems by e-mail, and their e-mail was almost always 2-3 days delayed. I have no connection with Lombard other than as a trading client. Those of you for whom online trading is appropriate may want to consider this company. I'd appreciate feedback on execution of stops with this or other online traders. I got burned by a too tight stop last summer by a stock that skyrocketed immediately afterward, so I haven't used them since. I DO keep a close eye on my holdings, though. Sorry for the long post, and good luck to all! Dave F. ------------------------------------------------------------------------------- From: patrick.wahl@unpcbbs.cts.com (Patrick Wahl) Subject: Re: [CANSLIM] SGMA (Sigma Date: 11 Dec 1996 06:00:00 GMT ZM>From: Zoran Mitrovski ZM>Subject: Re: [CANSLIM] SGMA (Sigmatron) ZM>Tom, why are you doing this to me? Is your heart made of stone? ZM>The moment I make a commitment to myself to hold a stock for ZM>more than two days you say that I should sell the damn thing. ;^) ZM>Do you know what that can do to a novice investor/speculator's ZM>mind and future development? ;^) Oddly enough, I have found one of the most difficult facets of investing to learn is what approach is most suited to my temperament. There isn't necessarily a right or wrong length of time to hold a stock. I tend towards the intermediate term, say from 3-9 months holding period. I have learned I can't stand to sit through retracements, so once a stock completes an upward move and bases, I am inclined to take my profits. That doesn't mean it is the best approach, just right for me. I had to live through a number of transactions and declines to learn this however. You would seem to have an even shorter time frame than I do. I guess you need to ask yourself how you will feel if a stock you hold for just a few days goes on up after you sell it, or how you feel if you lose a short pop because the stock retreats after being up for a day or two. Which one of these occurrences bothers you more probably will dictate how long you want to hold a stock. Also, I can tell you that you will have to pick a high percentage of winners if you trade very short term, because you won't have any large gainers to offset the inevitable losers that come along. To answer the above questions for myself that I suggested you ask yourself, I don't mind if a gain I have had for a week or two evaporates, because I know that is the price you have to pay for holding for a larger gain. I have had COMS for a few months and done very well. I had ESOL for a month, saw a profit disappear and ended up about even, but I can't second guess myself because I didn't sell that one when it was up. You can't apply one approach to one stock, then turn around and use another time frame on another stock. (I know, you guys, you can use more than one approach, depends on the personality of the stock, but generally, stick with one approach, knowing when the exceptions come along comes with experience.) ZM>Dammit, I'm gonna be watching SGMA every half an hour tomorrow, ZM>(Btw, I get real time quotes through Datek now. It's GREAT!) ZM>not knowing what to do every minute of the day. One advantage to longer term holding periods is that I check quotes once a day or so and make sure some surprise news announcement didn't blow my stock out of the water. Otherwise I just worry about end of day prices. Of course, if you like action maybe that is a disadvantage.... ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: Re: [CANSLIM] SGMA (Sigma Date: 11 Dec 1996 19:05:35 -0500 (EST) Patrick wrote: > Oddly enough, I have found one of the most difficult facets of investing > to learn is what approach is most suited to my temperament. There isn't > necessarily a right or wrong length of time to hold a stock. I tend > towards the intermediate term, say from 3-9 months holding period. I > have learned I can't stand to sit through retracements, so once a stock > completes an upward move and bases, I am inclined to take my profits. > That doesn't mean it is the best approach, just right for me. I had to > live through a number of transactions and declines to learn this > however. > > You would seem to have an even shorter time frame than I do. I guess > you need to ask yourself how you will feel if a stock you hold for just > a few days goes on up after you sell it, or how you feel if you lose a > short pop because the stock retreats after being up for a day or two. > Which one of these occurrences bothers you more probably will dictate > how long you want to hold a stock. Also, I can tell you that you will > have to pick a high percentage of winners if you trade very short term, > because you won't have any large gainers to offset the inevitable losers > that come along. [...] > One advantage to longer term holding periods is that I check quotes once > a day or so and make sure some surprise news announcement didn't blow my > stock out of the water. Otherwise I just worry about end of day prices. > Of course, if you like action maybe that is a disadvantage.... Patrick, I perfectly understand the reasoning behid the strategy of holding your winners longer, and I still think that it makes the most sense but take these factors into consideration: 1. I'd have to have been trading long enough in order to learn that from my own experience. And I do learn, because I do follow every stock that I have researched, bought and/or sold. 2. While I'm learning I think it is of utmost importance that I keep my confidence at a certain level. (Tom pointed this out recently, too). I don't think I can afford a random accidental sequence of hits by the market or by stocks that just happened to "misbehave". The brand new and green investor in me that is so full of enthusiasm and energy to grasp and learn would be shattered for months to come, and my learning process would be slowed tremendously. I know this because I know myself. That's another reason why I'm so careful. 3. You can see how the market is acting lately, and I just happened to jump into it right at the period when noone knows to distinguish a head from a tail. I must protect myself from letting this volatility influence my more universal conclusions about trading and my abilities to do it. 4. Because I'm leaving on Dec25 to Macedonia, I knew that I'm not going to leave any stocks on my account when I leave. Hence, any trade that I would possibly make before that would be a short term one. 5. These short term trades allow me to manage my time better, too, especially in these market conditions, where small cap tech stocks can easily plunge 6-7 points in one hour on some stupid news. Locking in the profits lets me concentrate on the two papers that I have to finish before I leave. If I need a break and ONLY if I have the time will I research, buy and sell a stock. Given the above, I still wouldn't pass a final judgment on the inherent length of my trading fuse. It just happens that the present circumstances yield the given actions as the most optimal things to do. That's all. Thanks for sharing your insights on this very important subject with me. I'd like to hear how others deal with these problems. (Yeah, selfish lurkers included, too ;^)) Oh, I wanted to clarify something. Somewhere I wrote that I am working towards a PhD in Communications and Signal Processing. That is Electrical Engineering. The comm and sig processing is merely my subjective closer description of my field of expertise. Cheers, Zoran ;^) http://www.seas.rochester.edu:8080/ee/users/zmitrov/home.html ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] SGMA (Sigma Date: 11 Dec 1996 20:36:20 -0500 I couldn't agree more, Patrick. I will certainly admit to holding thru a paper profit into a breakeven or loss or at least one or two occasions (as Mike would say, hehhehheh). I have even, no don't say it, yes, averaged DOWN! on occasion. I try to follow O'Neill's general rule of thumb, if a stock moves up in an orderly fashion, given that market conditions are also orderly/predictable, I will hold a well performing stock thru the basing. On the other hand, O'Neill has found that a stock that has moved thru a long (several months to a year or more) appreciation without any real correction will eventually retreat about 25% of the overall gain. Using a stop of about 8% thus means I can take my profits and, if I am patient, go back into the same stock, assuming it's CANSLIM qualified, much lower than my sell point for the next leg up. If it retreats 50% or more, then generally it should not be considered again without a pretty good base/support level, and still meets the major CANSLIM criteria. If my homework is good, and I have good confidence in the long term forecast, I have actually failed to take a 500% short term profit, and allowed the stock to drop to where I am only up 50 or 100%. On the other hand, I usually beat myself up pretty good for this. Most cases when I was this stupid was on "penny" stocks that were very thinly traded, not really CANSLIM, and failed to reach my first sell target. I also had good information, had followed the stock in many cases for years, and most importantly bot it in the first place for a long term hold/accumulate. When I buy a true pure bred "momentum" stock, I heavily weigh my sell actions on how fast the stock moved up, leading PE, and market conditions. Volume is also a very important indicator. Yeah, I have also beaten myself for the ones that I sold quickly for a nice 20 or 30% profit, then got away from me. But I remind myself, I was happy AT THE TIME taking this profit, and my decision to sell was based upon what I knew AT THE TIME. If you start monday morning quarterbacking yourself, other than to educate and inform and improve decision making, you will paralyze yourself when it comes to making a critical decision. That is one of the beauties of setting an absolute, won't be lowered, stop at the time you buy the stock. Raise it, never lower it. I don't think the bulk of any portfolio should consist of short term trading. It is high stress, very emotionally distracting, and, you're right, requires an extremely high percentage of winners. When I worked with clients, I stressed diversification. Always seek out the dogs to sell. But if something moved to fast, it was almost a given that it would retrench. I made three and four round trips on the same stock sometimes due to its action, each time for a profit, each time buying back in at a lower price than the last sell. I bot back because I had a long term outlook on the company, and took advantage of its volatility. If I had just bot and held, I would have given my clients about a 30% return, but they would have had to live thru periods where they saw profits eroded. My "buy and trade and take profits and buy back again" approach upped the return closer to 60% with less anxiety. The key here for me was keeping my clients comfortable and giving them a good return. If you are comfortable watching a stock base out, or more likely retreat 25% or more, to maintain a long term position, then it is right for you. On the other hand, I have bot back stocks higher than where I sold, because their characteristics justified it. What I, and my clients, missed out on was just part of that upward road to profits. But I emphasize, make the decisions based on what you know at the time, then move forward, don't try to second guess yourself. tom w ---------- > From: Patrick Wahl > To: canslim@xmission.com > Subject: Re: [CANSLIM] SGMA (Sigma > Date: Wednesday, December 11, 1996 1:00 AM > > Oddly enough, I have found one of the most difficult facets of investing > to learn is what approach is most suited to my temperament. There isn't > necessarily a right or wrong length of time to hold a stock. I tend > towards the intermediate term, say from 3-9 months holding period. I > have learned I can't stand to sit through retracements, so once a stock > completes an upward move and bases, I am inclined to take my profits. > That doesn't mean it is the best approach, just right for me. I had to > live through a number of transactions and declines to learn this > however. > > You would seem to have an even shorter time frame than I do. I guess > you need to ask yourself how you will feel if a stock you hold for just > a few days goes on up after you sell it, or how you feel if you lose a > short pop because the stock retreats after being up for a day or two. >Also, I can tell you that you will > have to pick a high percentage of winners if you trade very short term, > because you won't have any large gainers to offset the inevitable losers > that come along. > > To answer the above questions for myself that I suggested you ask > yourself, I don't mind if a gain I have had for a week or two > evaporates, because I know that is the price you have to pay for holding > for a larger gain. I have had COMS for a few months and done very well. > I had ESOL for a month, saw a profit disappear and ended up about even, > but I can't second guess myself because I didn't sell that one when it > was up. You can't apply one approach to one stock, then turn around and > use another time frame on another stock. ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] Online Trading anecdote Date: 11 Dec 1996 20:08:00 -0500 Dave, Thanks for coming out of the shadows. A few more like you and Mike's Lurker-Poster ratio will be in trouble! I hear bad comments all the time from net participants about online trading, nice to hear a success story for a change, no reason this couldn't happen more often. I certainly will keep Lombard in mind if I start trading online. tom w ---------- > From: Dave Finley > To: canslim@xmission.com > Subject: [CANSLIM] Online Trading anecdote > Date: Wednesday, December 11, 1996 3:35 PM > > Introduction: I'm a habitual lurker, but it's time to come out of the > shadows; when you get unexpected service, ya gotta tell someone. > > I placed an order with Lombard Online to buy back some call options I had > previously sold, since the price had dropped and I hoped to resell them when > the stock rebounds. I mis-entered the order as a "Sell-to-close" rather > than a "Buy-to-close". Ten minutes later I got a call from a Lombard broker > (Steve) to advise me of my mistake, explain how to avoid it again, and > verify my intentions for this specific trade. He also advised me, oh by the > way, that the price was down an eighth below my order price, and would I > like to place the order directly with him, since the time required to enter > it through the www might cause me to miss the new price. Beat me with a > stick! This guy called me AT WORK on Lombard's dime, and saved me $50 in > the process. Then he placed and confirmed my order on the phone, all within > 13 minutes after I placed my original erroneous order. ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] SGMA (Sigmatron) Date: 11 Dec 1996 20:02:49 -0500 Good answer, Zoran, and you're right about making decisions for yourself. Ultimately, you have to live with those decisions, and sounds like you are making good priority decisions as well. I have known people I characterize as "professional students" who only cared about getting a degree as fast as possible with the highest GPA, but failed to experience life itself. When they found themselves out of the academic world where they were judged on more than grades, they were a flop. Life is not just learning, it's also about growing. As an aside, have you considered for your research topic looking into the wireless comms approach that some exchanges are taking for the floor traders? It might give you an opportunity to see firsthand what actually goes on on the floor (and then you might be more comfortable with showing your stop limit). The entire comms setup required for a market exchange, including computer support, to ensure daily and orderly trading of half a billion shares or so (including crediting the right transaction to the right customer) might be very interesting. good luck with the studies, and the trading. Enjoy the trip home to Macedonia, hope it's not too much colder than Rochester. tom w ---------- > From: Zoran Mitrovski > To: canslim@xmission.com > Cc: Zoran Mitrovski > Subject: Re: [CANSLIM] SGMA (Sigmatron) > Date: Wednesday, December 11, 1996 12:28 PM > > HJS wrote: > > > It is scarry for me to hear people talking about day trade. > > Zoran, I though you are a student. How can you afford to follow the market > > without sacrficing your study? Unless you do not care about your degree. > > The average starting salary for a Chemical Engineer BS is low $40K/year. > > How much of capital you need to play in the market to earn $40k a year? > > > > Is there any one here, especially seasoned Canslimist, has been able > > to make $40K/year with minimum initial captial? > > > > If you accept the average pro's can make 15% return/year consistently. To > > earn 40k/year, you will need an initial captial of $266k. > > > And that is one very good opinion, too. See it would be stupid for me to > say that this investing excursion of mine does not influence my studies in > any way, but the way I see life, it is all a matter of optimizing your > future prospects. Even if this work and learning prolongs my studies > for a semester or so, I would like to think that this would be > time/money well spent. > > On the studies...I am done with my coursework, and I have only my research > to think about (PhD in Signal Processing and Communications). You have to make decisions that optimize YOUR overall > story. For me, what you call day trading, actually enables me to > be calm while I do my research. There is "stock time" and "school time" > (OK, "my girlfriend time", too) in my life and I have found a method > wich allows for minimum aliasing between them. You cannot put a price on the things you learn, > people you meet, and experiences you go through. If I was to be > locked into a room for 4 years in order to get my degree as > fast as possible, that piece of paper would be almost > a worthless piece of my life story, and a fairly shabby > guarantee of a success in my life. > > I'm going home this Christmas to see my family that I love so > much. That slows my studies, too, but there is no price to > the feelings and the hapiness that everyone is going to > experience when we spend all that time together. > Not everything can be measured by $/year. > > As for your statement that noone has become rich from investing, > I'd recommend you the book "Market Wizards" by Jack Shwager. > I know of a dosen of mutual funds that can beat that 15% any time. > > Trivia: If you could double your money each year, $10k would grow > to $10 million in 10 years. ------------------------------------------------------------------------------- From: GreatBird@leonardo.net (Gina Black) Subject: [CANSLIM] Intro Date: 11 Dec 1996 22:51:49 -0800 tom wrote: .Dave, .Thanks for coming out of the shadows. A few more like you and Mike's .Lurker-Poster ratio will be in trouble! I suppose I have to rise to a challenge worded like that. :) I've been lurking since almost the beginning of this list (I believe), and so far haven't communicated because I have everthing to learn and very little to relate that would be of use to any of you. I started trading in the stock market last spring. I've only traded online, and with NDB. In fact, the reason I started trading online was I was afraid a broker would see I didn't know what I was doing! That notwithstanding, I haven't lost anything yet. I've gotten very close -- seen my stocks go down 10 points or more and sold when they finally returned past the level I bought them. On the other hand, I haven't made much either, compared to the amount of time I've put into all this. Someone told me about William O'Neil sometime last summer. I bought the book and then a subscription to IDB. I haven't read the book yet (you wouldn't believe the size of my to-be-read pile) but peruse the newspaper most mornings. Although I can't say I'm fully applying CANSLIM I do appreciate the rankings. I appreciate everyone who posts. I'm learning a lot from this list. I now return to lurker status. Gina GreatBird@leonardo.net http://members.aol.com/greatbird ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] Intro Date: 12 Dec 1996 06:38:23 -0500 Hey Gina, come back! No, once exposed you can't regress and become a real lurker now. We know you're out there. Gina? Hello, Gina, are you there? Don't kid yourself, you can contribute. Gina? tom w ---------- > From: Gina Black > To: canslim@xmission.com > Subject: [CANSLIM] Intro > Date: Thursday, December 12, 1996 1:51 AM > > tom wrote: > > .Dave, > .Thanks for coming out of the shadows. A few more like you and Mike's > .Lurker-Poster ratio will be in trouble! > > I suppose I have to rise to a challenge worded like that. :) I've been > lurking since almost the beginning of this list (I believe), and so far > haven't communicated because I have everthing to learn and very little to > relate that would be of use to any of you. > > I started trading in the stock market last spring. I've only traded online, > and with NDB. In fact, the reason I started trading online was I was afraid > a broker would see I didn't know what I was doing! > > That notwithstanding, I haven't lost anything yet. I've gotten very close > -- seen my stocks go down 10 points or more and sold when they finally > returned past the level I bought them. On the other hand, I haven't made > much either, compared to the amount of time I've put into all this. > > Someone told me about William O'Neil sometime last summer. I bought the > book and then a subscription to IDB. I haven't read the book yet (you > wouldn't believe the size of my to-be-read pile) but peruse the newspaper > most mornings. Although I can't say I'm fully applying CANSLIM I do > appreciate the rankings. > > I appreciate everyone who posts. I'm learning a lot from this list. > > I now return to lurker status. > > Gina > > ------------------------------------ > GreatBird@leonardo.net > http://members.aol.com/greatbird > ------------------------------------ > ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] SGMA (Sigma Date: 12 Dec 1996 06:35:37 -0500 Hey, whoever said lurkers are selfish? Personally I do a lot of lurking on the net, joining in where I think I can contribute and trying to learn from others elsewhere. Truth is, the level of experience, knowledge, wisdom, and, yes, classic mistakes posted by those of us actively posting could easily intimidate new investors into being permanent lurkers. This is a tough group to just jump into. Shouldn't be the case, however, come on lurkers, introduce yourselves. We really do want to hear from you and hear your opinions. If I was as "expert" as some of you think, I would be financially independent instead of working for a living. I learn something new every day, and often from talking to so-called novices who ask some damn good questions. Yesterday, for example, in the middle of the mkt down over 100 pts, I told my assistant (who bot the same stock) that one of my microcaps was about to move up. Couldn't explain exactly why, just knew it. Not five minutes later, an uptick on both bid and offer. In trying to explain to her how I knew, I had to organize my thoughts and put them into some rational form. That helped me as well as her. We can all contribute here! As an aside, Jeff, how are we doing lately on the LP ratio? I know a few new names have joined in. Are we still running 20:1 on lurkers:posters or getting better/worse? Also Jeff, how about running a confidential survey of all registrants on their background? I know we have members who work in the computer and chip industry, for example. Another is an experienced trader of one computer stock. It would be good for the group to know of the expertise within our ranks for when we seek specific info, even if we don't know the individual member who has it, it could still be adressed to the group. tom w ---------- > From: Zoran Mitrovski > To: canslim@xmission.com > Cc: Zoran Mitrovski > Subject: Re: [CANSLIM] SGMA (Sigma > Date: Wednesday, December 11, 1996 7:05 PM > > Thanks for sharing your insights on this very important subject > with me. I'd like to hear how others deal with these problems. > (Yeah, selfish lurkers included, too ;^)) ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: [CANSLIM] "Selfish" lurkers Date: 12 Dec 1996 09:30:04 -0500 (EST) Tom, there was a smiley after that statement of mine. I guess I just have a twisted sense of humor of something. If you remember I was the one who advocated not being pushy towards the lurkers few weeks ago, and giving them all the time they needed to become comfortable posting. HJS, I didn't mean to chase you out with my long reply without any "welcome"-s in it. Welcome! Gina, if you hadn't noticed already, the W/M (women/men) ratio of the posters on this list is somewhat disasterous (Sorry guys, crossdressing doesn't count ;^)). Ladies, please do something about improving W/M. A big welcome to you, too, Gina. To me sharing info makes both the writer and the reader a lot richer. There are many issues in the writer's mind that are in urgent need of being structured and studied closely by the writer (him)herself. There's no better chance for that than in a forum while trying to explain decisions, thoughts and actions to others. That's the magic of the commodity called information. You increase it by sharing it. I liked Tom's idea to learn about our respective fields. My homepage says something about me: http://www.seas.rochester.edu:8080/ee/users/zmitrov/home.html If you didn't notice already both HDCO and SGMA are in the Electronics industry group. I felt comfortable reading about those co's and understanding the value of their contracts and future prospects. Anyways, back on my head... Cheers, Zoran ;^) ------------------------------------------------------------------------------- From: Dave Finley Subject: Re: [CANSLIM] Intro Date: 12 Dec 1996 10:47:23 -0500 At 10:51 PM 12/11/96 -0800, Gina wrote: >Someone told me about William O'Neil sometime last summer. I bought the >book and then a subscription to IDB. I haven't read the book yet (you >wouldn't believe the size of my to-be-read pile) but peruse the newspaper >most mornings. Although I can't say I'm fully applying CANSLIM I do >appreciate the rankings. > Gina, I sympathize with the problem of having too many things to read/do. Been there, am there, still trapped :) My recommendation is to set aside the paper and your trading activities for a week and read O'Neil's book. You'll get much more out of your IBD subscription and this list. There are very few books I've read more than once in my lifetime, but I plan to do this one again soon, some chapters multiple times. Best of luck on your future (and current) trades! Dave ------------------------------------------------------------------------------- From: Johan Van Houtven Subject: Re: [CANSLIM] My market comments postings Date: 12 Dec 1996 18:33:36 +0100 Tom, Keep your comments comming. I value them. The worst thing that could happen to this list is that we all start singing the same song. It is supposed to be a *discussion* group. It's good to have different opinions, and being able to discuss them. I would like the discussions to be about 'something', and not about 'someone' on this list. I.e. no personal attacks or whatever. I hope I have made myself clear. (English is not my mother tongue.) Johan (Belgium) PS: Currently in APCC ROSS ALPH BOOM (all CANSLIMs) and QKTN (somewhat speculative, Vinnik owns it, it's a good co, no overhead (chart)) BTGC (speculative, got in because of chart looks good) Have been holding since a long time: SGMA bought at 16 in the spring (dumb!) and added a lot of shares a few weeks ago at 11. LGND. IMGN. IOM. ANLT. TCCO (one of the most stupid things I ever did was buy this stock) I'd like to hear your comment on these. At 08:35 PM 12/10/96 -0500, you wrote: >I have posted some occasional "market comments" spiels with little feedback >so far. I realize I have a somewhat warped view as a broker/investor/back >office-order entry flunkie, but would be interested in knowing if (a) I am >wasting your time and space in your inbox or (b) I'm doing anyone any good >at least in educating and presenting a different (often contrarian) point >of view. > >I'm not looking for feedback to my self esteem, as you already painfully >know, I love to respond and share my opinion, just want to see if I am >being of any help. > >Feedback welcome, advice/suggestions will be honestly considered. > >tom w > > ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: Re: [CANSLIM] My market comments postings Date: 12 Dec 1996 13:50:17 EST Johan wrote: > PS: Currently in APCC ROSS ALPH BOOM (all CANSLIMs) > and QKTN (somewhat speculative, Vinnik owns it, it's a good co, > no overhead (chart)) > BTGC (speculative, got in because of chart looks good) > > Have been holding since a long time: SGMA bought at 16 in the spring (dumb!) > and added a lot of shares a few weeks ago at 11. LGND. IMGN. IOM. ANLT. > > TCCO (one of the most stupid things I ever did was buy this stock) Johan, please don't mind a newbie asking, but isn't it too hard to follow 12 stocks at the same time? But then again, if your funds are enormous then I guess you'd have to spread them wider. I noticed you "averaged down" and "bottom fished" on SGMA after it's dive down from 17 earlier this year. Did you have a specific reason to do that? I remember O'Neil strongly advising against doing that. Btw, I'm watching for SGMA to break the psychological barrier at 17-18. I think the basing on high volumes around these values for the past few days is because of all the buyers that bought it around 17 earlier this year and watched it go way below 10 soon after. They must be saying: "Lord thanks for bringing it back up so that I can take my money back and get the hell out of here". Btw, that was my target sell price anyway when I bought it at 14 7/8 few days ago. I'd watch for a potential breakout after the volume dries up enough and there are no more frustrated sellers to feed the interested buyers. Biotechs (LGND) are a scary domain for me. I have hard time figuring the values of the news and the announcements in that field. Cheers, Zoran ------------------------------------------------------------------------------- From: patrick.wahl@unpcbbs.cts.com (Patrick Wahl) Subject: Re: [CANSLIM] SGMA (Sigma Date: 12 Dec 1996 04:49:00 GMT ST>From: "tom worley" ST>Date: Wed, 11 Dec 1996 20:36:20 -0500 ST>Subject: Re: [CANSLIM] SGMA (Sigma ST>I couldn't agree more, Patrick. I will certainly admit to holding thru a ST>paper profit into a breakeven or loss or at least one or two occasions (as ST>Mike would say, hehhehheh). I have even, no don't say it, yes, averaged ST>DOWN! on occasion. I try to follow O'Neill's general rule of thumb, if a I can't believe it now, but I did that too, once, in a stock I had a profit in, and I was so sure it was fundamentally sound (AMAT) that I figured it had to go back up. That and a couple of other blunders have me convinced that the market is almost always right, and if a stock isn't behaving in accordance with my understanding of the fundamentals, then I am almost certainly missing something. ST>and giving them a good return. If you are comfortable watching a stock base ST>out, or more likely retreat 25% or more, to maintain a long term position, ST>then it is right for you. This is what I meant when I said I can't stand retracements. I am never confident enough of my own evaluations to sit through such things. You never know when it is a normal pullback, or a symptom of a problem that is going to lead to more severe price declines (I hate it when that happens). ST>On the other hand, I have bot back stocks higher than where I sold, because ST>their characteristics justified it. What I, and my clients, missed out on You can always get back in, although it sometimes seems a little harder psychologically speaking to get back in. I think I have owned Cisco Systems 4 different times. ------------------------------------------------------------------------------- From: "David Peterson" Subject: [CANSLIM] Re: AMAT Date: 12 Dec 1996 14:41:28 -0800 (PST) > > I can't believe it now, but I did that too, once, in a stock I had a > profit in, and I was so sure it was fundamentally sound (AMAT) that I > figured it had to go back up. That and a couple of other blunders have > me convinced that the market is almost always right, and if a stock > isn't behaving in accordance with my understanding of the fundamentals, > then I am almost certainly missing something. > Finally a subject I can talk about. I've been keeping pretty quiet as I've only read a couple of chapters in O'Neill's book and I don't know anything about analyzing charts. However, I did notice last year that AMAT was consistently trading between 100 and 105 (before the split). I played this successfully about 3 or 4 times before I got caught in the tech stock fallout. I've been holding onto it ever since. :( Dave ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] "Selfish" lurkers Date: 12 Dec 1996 18:26:34 -0500 I would like to add my 2 cents worth as a broker/former broker. The brokerage business is male dominated, and most brokers act like women can't handle finances and investing. My experience was that women made the best investors and best decision makers. Surprising to me was to discover that women actually were less emotionally attached to stocks than men. We need more women to speak up, their thoughts are often clearer. Yeah, I admit it, I am a feminist. My poor opinion of Garzarelli has nothing to do with her sex, it is with her opinions and I have said the same about male forecasters. I agree with Zoran, we need to improve the W/M ratio. tom w ---------- > From: Zoran Mitrovski > To: canslim@xmission.com > Cc: Zoran Mitrovski > Subject: [CANSLIM] "Selfish" lurkers > Date: Thursday, December 12, 1996 9:30 AM > > Gina, if you hadn't noticed already, the W/M (women/men) ratio > of the posters on this list is somewhat disasterous > (Sorry guys, crossdressing doesn't count ;^)). > Ladies, please do something about improving W/M. > A big welcome to you, too, Gina. ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] Re: AMAT Date: 12 Dec 1996 18:46:31 -0500 I haven't looked at the chart in several weeks, but for what's it's worth, AMAT is one of about 20 tech stocks I keep on my monitor at work to help guage the tech groups (cuz I see them as the single most important factor in market leadership). Subjectively, I like the way it has traded the past week or so, and I think an important factor in this is its trailing PE. I plan to post another "market comment" tonight which focuses on this issue. I don't think you will be getting back to your last entry pt any time soon, but the downside from here doesn't scare me. good luck tom w ---------- > From: David Peterson > To: canslim@xmission.com > Subject: [CANSLIM] Re: AMAT > Date: Thursday, December 12, 1996 5:41 PM > > > > > > I can't believe it now, but I did that too, once, in a stock I had a > > profit in, and I was so sure it was fundamentally sound (AMAT) that I > > figured it had to go back up. That and a couple of other blunders have > > me convinced that the market is almost always right, and if a stock > > isn't behaving in accordance with my understanding of the fundamentals, > > then I am almost certainly missing something. > > > > Finally a subject I can talk about. > > I've been keeping pretty quiet as I've only read a couple > of chapters in O'Neill's book and I don't know anything > about analyzing charts. > > However, I did notice last year that AMAT was consistently > trading between 100 and 105 (before the split). I played > this successfully about 3 or 4 times before I got caught > in the tech stock fallout. I've been holding onto it ever > since. :( > > Dave > ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] Intro Date: 12 Dec 1996 18:32:29 -0500 Concur. When I was an active broker, I tried altho not always successfully, to reread it monthly. This helped remind me of where and when I was diverging from the discipline. I also found something new every time that either I had overlooked previously or else it didn't apply then but did on the following read. Great book, best investment I ever made. tom w ---------- > From: Dave Finley > To: canslim@xmission.com > Subject: Re: [CANSLIM] Intro > Date: Thursday, December 12, 1996 10:47 AM > I sympathize with the problem of having too many things to read/do. Been > there, am there, still trapped :) My recommendation is to set aside the > paper and your trading activities for a week and read O'Neil's book. You'll > get much more out of your IBD subscription and this list. There are very > few books I've read more than once in my lifetime, but I plan to do this one > again soon, some chapters multiple times. ------------------------------------------------------------------------------- From: "tom worley" Subject: [CANSLIM] Re: BTGC Date: 12 Dec 1996 18:39:35 -0500 I followed BTGC some years ago for a client. After a full due diligence on it (she was long the stock), I told her to sell it. She didn't, I was right. Because of this I had to keep an eye on it for a number of years after, and never saw a reason to own it. One factor was that they kept losing money, and kept selling newly issued shares to compensate. I don't recall seeing a company their size burn thru so much dough. I haven't admittedly looked at it in several years, do recall there was some changing in mngmt forced by some of the outside investors tired of the losses. For me they were a co that always failed to deliver on promises of future prospects/products. Hope for you they have changed their pattern. I like APCC, altho not so impressed with BOOM. I think IOM is holding up well, SGMA today showed good strength in a 100 pt down mkt. good luck tom w ---------- > From: Johan Van Houtven > To: canslim@xmission.com > Subject: Re: [CANSLIM] My market comments postings > Date: Thursday, December 12, 1996 12:33 PM > > > PS: Currently in APCC ROSS ALPH BOOM (all CANSLIMs) > and QKTN (somewhat speculative, Vinnik owns it, it's a good co, > no overhead (chart)) > BTGC (speculative, got in because of chart looks good) > > Have been holding since a long time: SGMA bought at 16 in the spring (dumb!) > and added a lot of shares a few weeks ago at 11. LGND. IMGN. IOM. ANLT. > > TCCO (one of the most stupid things I ever did was buy this stock) > > I'd like to hear your comment on these. ------------------------------------------------------------------------------- From: Craig Griffin Subject: [CANSLIM] Dow Top Date: 13 Dec 1996 04:02:24 GMT This is a heads up. Looks like to me the dow has formed a top. Sorry to send this out so late at night, many of you will not read it until tomorrow and I know it will take some time to digest. I don't want to encourage anybody to be too worried and please don't panic based on my reading of the tea leaves, or anyone else's for that matter. I have never read one of these before, but it looks pretty straight forward. I'll give you my reading below and you can critique, review, etc. First the bad news, I should have spotted it several days ago, today's 98 point drop was not the defining action, only the start of the follow through. Now the GOOD news, these things do not go straight down. They usually rally alot along the way, looking like a good market for a while, suck some more people in and then drop back again. So this is not a flash bulletin to suggest you sell all your stocks immediately. But if you agree with me, you may want to lighten up in rally's, etc. Some stocks will continue to do well. Breakouts should continue to occur and some will succeed, but I will not be buying any for the time being. Here's the bottom line, IF I am right, the waters just got a lot more treacherous. I hope I am wrong, so anybody who will, take a close look, do some analysis, look backward in time to see if what I describe below has happened in a similar way in the last year. Maybe I am misreading it. If I am reading it right, could be the beginning of a 10% correction. Or could be the beginning of a bear. If I am reading it right, I suspect the correction will go more than 10%, because almost nobody is calling for it (except Ms. G, but that's another story). For this analysis you will need an IBD from today or yesterday. Turn to the page that has the charts of the 3 markets (for today, Thurs., the 12th, it is on page A27). Now look at the chart for the DOW JONES INDUSTRIALS. Get a 3x5 index card or some other straight edge to follow along with. Look at NYSE volume under the DOW chart (the volume comes from the NYSE, the chart comes from the DOW). Ready? OK, look at the Thanksgiving Holiday, November 28 (no trading). Right. Now back up 4 days on the volume chart. 1) This day is Friday, Nov. 22nd. That day is "good action". Note that the volume is high (relative to almost all days since June). Use your straight edge to connect the volume with the price bar for that day. Note that the price closes up for the day on good volume (new high). So far, no problem. 2) Go to the next day, (Monday the 25th) volume drops off, price moves up, another new high. This is not good action. No oompff behind the move to a new high. But, by itself, not particularly bad. Happens occasionally. 3) Go to the next day, (Tuesday the 26th). Higher volume than even Monday the 25th, but the price rally's up (new altime high of 6606.30 on chart) and then CLOSES down for the day. High volume with no progress = distribution. The smart boys are selling. 2nd day of bad action, but much worse than yesterday. Of course everybody not in the know feels good, headline on the Nightly Business Rpt probably mentions "profit takers". They don't know how right they are. 4) Next day, Wednesday the 27th, lower volume, down a little more, but closes off its lows. Pre-holiday, no reading. 5) Next two days are Thursday Thanksgiving and Friday after with short trading session and almost no volume - not significant. 5) Monday, December 2nd, low volume, closes unchanged, but most of action for that day was down. 6) Tuesday, Dec. 3rd, high volume again and closes at low for the day! - CONFIRMATION of the failed new high back on Tuesday, the 26th of Nov. (#3 above). But average guy is not worried, look how close to the recent high we still are. But then comes 3 more high volume days with no progress, more distribution. The last of those 3 days is the Greenspan comment day where the DOW showed "remarkable resilency", well not actually. 7) The DOW rally's back up the next day on LOW volume. Closes at the high for the day, but it is meaningless ... actually bad, there is no volume. 8) The next day is December 10th, Tuesday of this week. The volume picks up and there is an anemic attempt at a rally, which fails and closes at the low for the day. The next day is Wednesday the 11th - higher volume and a down day. That's it. Here are the important days, the ones that define the top from the above discussion. #2 and #3 together, but especially #3. Then #6 and #8. I believe that these days define the top. Perhaps for this bull market, perhaps for a correction. Today's weak close helps to verify it. Sorry to be so late with the info (IF accurate). Don't panic ... this is my first reading like this. So maybe I am misreading it, but see what you think. Even if the worst scenario is right, there should be rally's along the way. Also, any critiques within or outside of the discussion above are welcome. Here are the relevant pages from O'Neils book where he covers this sort of market reading pages 47 to 52 in Chapter 7 (the section called: "Historical Tops for Further Study" through the section "Look for Divergence of Key Averages"). Also, to repeat, sorry to send this out so late at night, many of you will not read it until tomorrow and I know it will take some time to digest. ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: Re: [CANSLIM] Dow Top Date: 13 Dec 1996 00:47:19 -0500 (EST) Craig, excellent analysis, and I did read it at midnight although I am 100% in cash at this moment anyway. I spent couple of hours today studying potential buys today and I didn't come up with anything that would ring as strong as my previous choices. Perhaps, that is a sign of rough times ahead, too. ;^) I also share your feelings about the market conditions, but I couldn't put them in a structured way as you just did. This was also one of the main reasons for my "hit'n run" approach lately. I also found myself totally avoiding overpriced stocks w/respect to their PE ratios, cause I have a feeling they would be the first ones to tank on a sign of panic. I really wouldn't be able to sleep if a big chunk of my $$ were in high PE stocks in these market conditions. Both HDCO and SGMA were tech stocks with great numbers, and promising up volumes on their charts AND with PE<15 when I bought them. Their PE's are still great, and that's why I'm still watching them for possible small rallies as more money (my gut feeling again) should decide to seek quality at no premium price in these risky times for the market. Something tells me that many of the hyped up quality stocks out there ought to make few deep dips before they decide to take off into new highs. And I'll be watching those and perhaps hit'n run on low risk/high reward stack of odds few more times here and there in the meantime. For what they're worth, these are my gut feelings. Good luck to y'all. Cheers, Zoran ------------------------------------------------------------------------------- From: "tom worley" Subject: [CANSLIM] Market comments 12/12 Date: 13 Dec 1996 06:39:58 -0500 I also apologize for the late posting, I fell asleep eating a late dinner and, when I woke at midnight, decided to keep sleeping instead of getting back on the keyboard. It's been a long hard week and will get worse as I lose my assistant today with no replacement in sight. If anybody knows someone good who wants to work in a "back office" in Miami for lousy pay (buy, hey, it's a great learning experience) let me know. Yesterday's drop bothered me primarily because I could not see it coming. Craig's post on market top is interesting and I want to study his approach further. My initial reaction is that a market top cannot be called over just a few days. He is correct that it takes weeks to months to form a true top so there is time for an orderly retreat if that is the case. Zoran's comments hit on what I was studying last nite. From a prediction standpoint, when a mkt corrects, the largest losers both in pts and percent are: ones with the greatest RECENT runup due profit taking and, second, ones with the highest PE (usually measured on trailing PE). I noted both HDCO and SGMA held up w/PEs of 17 and 15, for the day up 1/2 and 3/8. That got me examining some of the stocks I keep on my monitor, here are the results. stk PE close CPQ 24 -4.75 TXN 33 -.875 AMAT 12 +.75 CUBE NA -2 CYRX NA -1.22 MSFT 45 -2.375 new high SUNW 23 -.125 MU 13 +.375 INTC 29 --- new high IBM 16 -4.5 MOT 24 -.125 DELL 27 -2.625 ASND 84 -3 new high ELTN 30 -.44 CU 57 -.625 WHC 61 +.25 VTSS 67 -1.18 SGMA 15 +.375 HDCO 17 +.5 CSCO 49 -2.25 new high GATE 20 -2.25 MRVC NA -1 ENCD 46 -.75 ECILF 15 +.125 NETC NA -.5 NSCP 334 -..77 SPYG 48 -1.06 NOVL 28 -.125 OSSI 20 +.187 I also looked at mkt stats and noted following: NYSE NASDAQ Advance 877 2095 Decline 1616 2177 Advance vol 130.5m 232.9m Decline vol 310.3m 290.3m New highs 89 115 New lows 42 101 QUALIFIER: The above stocks which I choose to monitor are not indicative of the mkt at large, simply reflect where I believe mkt leadership is for the most part. You will note a very heavy nr of tech and comms stocks plus a few pets thrown in. You will also note a total absence of meds, food, cyclical, and financials which I simply won't touch, therefore don't watch. This is a PERSONAL bias from my own personal experience, you should not let it influence you. I do watch another 30 or so stocks, some of which are meds, but all are low priced and do not reflect either CANSLIM or mkt leadership. COMMENTS: Remember, just OMHO, the flight of money into the most liquid stocks that fueled a Nov runup into the best monthly gain ever has at least hit a profit taking wall if not ended. High PE stocks and stocks with recent runup got hit the worst. Almost without exception these benefited from the flight to liquidity. NYSE benefited most, now suffers more. NASDAQ still shows strength, adv/decline line while still near two yr low hasn't broken down. In both exchanges, new hi/low held positive which did surprise me after the past week. However, of the 89 new highs on NYSE only 11 closed down for the day and almost all were only down fractionally. On NASDAQ, 16 of the new highs closed down and several were down several pts so the NYSE new hi/low actually ends up looking better to me than NASDAQ's. Of the new lows on both exchanges, only 8 closed down over a pt. Economic reports out yesterday showed CPI in line at +.3%, and retail sales and weekly jobless claims were slightly softer than expected, thus still no evidence of inflation. Note also that the stocks that make up all the indexes are also among the most liquid stocks for the most part. Note also that I felt a week or so ago we were seeing a rotation of money from the top performing highly liquid stocks into the secondary/smaller caps as investors took profits and looked for undervalued stocks that had not joined the rally. While the bond mkt has sold off lately, I think that too is profit taking. Yesterday's early weakness reversed ending down two ticks with futures up two basis pts. CONCLUSION: Bull mkt intact Rotation of money continues from big cap to secondary stks No sig change in industry group leadership Some money shifting back from equities to bonds to take advantage of higher yields/lower prices (I think this shift was sig starting late yesterday morning) Be careful of high trailing PE, make sure it is supported by exceptional forward PE forecasts Be careful of stocks with recent runups that have not already based out, they are good candidates for profit taking for tax reasons for the rest of Dec Some comments noted a sig increase in "short against the box" (a tax strategy, not a trading one) which would go along with my last conclusion Remember I am not as concerned with whether the mkt is bear or bull, I focus on predictability. I can actually make money faster in a bear mkt because stks tend to fall faster than they rise. However, if I can't predict better than 50%, I am gambling, and I go to the Bahamas for that. ------------------------------------------------------------------------------- From: "David F. Cameron" Subject: Re: [CANSLIM] Dow Top Date: 13 Dec 1996 9:05:09 CST Commenting on Craig's insightful post. > > This is a heads up. Looks like to me the dow has formed a top. > ... Could it be that Mr. Greenspan was right - and I'm not so dumb for unloading 20% of my portfolio at the low for the day last Friday? Of course, I shy away from Dow stocks - and as a professional statistician, I am one of the world's biggest haters of basing the entire market on a non-random sample of 30 stocks. > alot along the way, looking like a good market for a while, suck some more > people in and then drop back again. So this is not a flash bulletin to > suggest you sell all your stocks immediately. But if you agree with me, you > may want to lighten up in rally's, etc. Some stocks will continue to do > well. Breakouts should continue to occur and some will succeed, but I will > not be buying any for the time being. ... This seems to just be happening in the large caps right now. Small caps have been hanging in there. You may very well be right, that this will set the ball in motion though. I need to look at the leaders this weekend - some of the stocks Tom listed are good for that. > > Here's the bottom line, IF I am right, the waters just got a lot more > treacherous. > > I hope I am wrong, so anybody who will, take a close look, do some analysis, ... I'm going to look it over in more detail this weekend, I think we need to compare to the S&P though. (Which at a glance looks similar.) > look backward in time to see if what I describe below has happened in a > similar way in the last year. Maybe I am misreading it. If I am reading it > right, could be the beginning of a 10% correction. Or could be the > beginning of a bear. If I am reading it right, I suspect the correction > will go more than 10%, because almost nobody is calling for it (except Ms. > G, but that's another story). ... it seems we all agree on Ms G. :^) > > Here are the relevant pages from O'Neils book where he covers this sort of > market reading pages 47 to 52 in Chapter 7 (the section called: "Historical > Tops for Further Study" through the section "Look for Divergence of Key > Averages"). .. Exactly. It could be that the Dow is over-extended. The S&P and the NASDAQ had not advanced as far as the Dow this year. Of course, it does seem the S&P and the Dow are moving in lock-step as I look at the charts on the morning of Friday the 13th.... But... the NASDAQ seems to be in more a sideways pattern of late. 6 weeks ago we were bemoaning that the Dow was racing upward, but HGS weren't following suit. So we've had divergence for a while. This could mean a correction just for large caps, but maybe not. > > Also, to repeat, sorry to send this out so late at night, many of you will > not read it until tomorrow and I know it will take some time to digest. > I'll take well thought out opinions whenever I can get 'em! Thanks, I'm taking your analysis and studying it this weekend, Dave dcameron@harper.cc.il.us ------------------------------------------------------------------------------- From: Haw-Jye Shyu Subject: Re: [CANSLIM] "Selfish" lurkers Date: 13 Dec 1996 10:23:55 -0500 (EST) > From owner-canslim@xmission.com Thu Dec 12 10:13 EST 1996 > From: Zoran Mitrovski > Subject: [CANSLIM] "Selfish" lurkers > To: canslim@xmission.com > Date: Thu, 12 Dec 1996 09:30:04 -0500 (EST) > Cc: zmitrov@ee.rochester.edu (Zoran Mitrovski) > Mime-Version: 1.0 > Content-Transfer-Encoding: 7bit > > > HJS, I didn't mean to chase you out with my long reply without > any "welcome"-s in it. Welcome! > Zoran, it's ok. I thought that I posted my personal failure on stock trading a few weeks back. I started trading stock last year. So far, I only managed to earn 8%. The commison eat a big junk of my profit (about 4%). I use the Waterhouse. One way is $31.5. I bought BSPT based on the suggestion from one of the guest on Louis Rukiser (sp?) show. I bought them at 9 3/4 and sold them at 6 1/4. I also buy VJET at 11 3/4 and sold them at 7 1/4. Loss big on these two. The winers I had were BLY, LSI, CSCO, OC, and KM. I did not get the golden opportunity to buy Intel, Motorola, nor HewletPacker. Beacuse all my money are tied up in the winners. Sight! I notice most of the charts shown in the IBD seem to form cup. they are small cup, wide and shallow cup, deep and narrow cup, .... Am I correct on this? Thanks! HJS I really have no experience on Canslim hence can not contribute too much discussion about it. ------------------------------------------------------------------------------- From: Craig Griffin Subject: Re: [CANSLIM] Market comments 12/12 Date: 13 Dec 1996 16:01:27 GMT Tom, Just a short note to thank you for your response. Great analysis all the way around. Haven't changed my mind about what I see in the chart, looks like significant distribution. But it could be that we are just going through a correction/shake-out, rather than the beginnings of a bear. Right now, until the market shows me otherwise, I believe we will at least have a significant correction. (See pg 52 in O'Neil for way to spot shakeout. See pg 58 and pg 64 for additional bear signals.) Again I want to Thank You! Very insightful and well reasoned analysis. Best regards, Craig At 06:39 AM 12/13/96 -0500, you wrote: > ... >COMMENTS: Remember, just OMHO, the flight of money into the most liquid >stocks that fueled a Nov runup into the best monthly gain ever has at least >hit a profit taking wall if not ended. High PE stocks and stocks with >recent runup got hit the worst. Almost without exception these benefited >from the flight to liquidity. NYSE benefited most, now suffers more. NASDAQ >still shows strength, adv/decline line while still near two yr low hasn't >broken down. In both exchanges, new hi/low held positive which did surprise >me after the past week. ... > ... Note also that I felt a >week or so ago we were seeing a rotation of money from the top performing >highly liquid stocks into the secondary/smaller caps as investors took >profits and looked for undervalued stocks that had not joined the rally. >While the bond mkt has sold off lately, I think that too is profit taking. >Yesterday's early weakness reversed ending down two ticks with futures up >two basis pts. > > ... > Be careful of high trailing PE, make sure it is supported by exceptional >forward PE forecasts > Be careful of stocks with recent runups that have not already based out, >they are good candidates for profit taking for tax reasons for the rest of >Dec > Some comments noted a sig increase in "short against the box" (a tax >strategy, not a trading one) which would go along with my last conclusion > >Remember I am not as concerned with whether the mkt is bear or bull, I >focus on predictability. I can actually make money faster in a bear mkt >because stks tend to fall faster than they rise. However, if I can't >predict better than 50%, I am gambling, and I go to the Bahamas for that. > ------------------------------------------------------------------------------- From: Johan Van Houtven Subject: Re: [CANSLIM] Re: BTGC Date: 13 Dec 1996 19:46:14 +0100 Tom, At 06:39 PM 12/12/96 -0500, you wrote: >I followed BTGC some years ago for a client. After a full due diligence on >it (she was long the stock), I told her to sell it. She didn't, I was >right. Because of this I had to keep an eye on it for a number of years >after, and never saw a reason to own it. One factor was that they kept >losing money, and kept selling newly issued shares to compensate. I don't >recall seeing a company their size burn thru so much dough. I haven't >admittedly looked at it in several years, do recall there was some changing >in mngmt forced by some of the outside investors tired of the losses. For >me they were a co that always failed to deliver on promises of future >prospects/products. Hope for you they have changed their pattern. Bought BTGC at 10 5/8, sold at 11 this week. It was just a play because of the brakout situation that I noticed in the chart. >I like APCC, Added to my position yesterday and today. Yesterday at 25 3/8, today at 24 7/8. >altho not so impressed with BOOM. I like them currently forming a base at 9 - 9.5. >I think IOM is holding up Just saw it you under 20... >well, SGMA today showed good strength in a 100 pt down mkt Indeed. I wonder what it will do in a good up day. :-) >good luck >tom w Thank you for your opinion. Johan > >---------- >> From: Johan Van Houtven >> To: canslim@xmission.com >> Subject: Re: [CANSLIM] My market comments postings >> Date: Thursday, December 12, 1996 12:33 PM >> >> >> PS: Currently in APCC ROSS ALPH BOOM (all CANSLIMs) >> and QKTN (somewhat speculative, Vinnik owns it, it's a good co, >> no overhead (chart)) >> BTGC (speculative, got in because of chart looks good) >> >> Have been holding since a long time: SGMA bought at 16 in the spring >(dumb!) >> and added a lot of shares a few weeks ago at 11. LGND. IMGN. IOM. ANLT. >> >> TCCO (one of the most stupid things I ever did was buy this stock) >> >> I'd like to hear your comment on these. > > ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: [CANSLIM] IOM Date: 13 Dec 1996 15:47:36 -0500 (EST) IOM broke an important psychological support level at 20 today, on volume much higher than average. The 400k that brought it down from 19.9 to 19.6 looks particularly scary to me. It's at 19 as I write this. I believe Dave (Cameron) had some IOM. Dave, are you still in? I was watching IOM today to see if I can jump in at the bottom of the 21-26-21-... pattern. Nope, no pattern, no way, Jose! Both HDCO is down 2 at 48 and SGMA is a bit lower on a weak volume. That's what I could observe during this one hour break. Back on my head... Cheers, Zoran ------------------------------------------------------------------------------- From: Johan Van Houtven Subject: Re: [CANSLIM] IOM Date: 13 Dec 1996 23:37:04 +0100 At 03:47 PM 12/13/96 -0500, Zoran wrote: > >IOM broke an important psychological support level at 20 today, >on volume much higher than average. The 400k that brought it >down from 19.9 to 19.6 looks particularly scary to me. >It's at 19 as I write this. I've been watching IOM all day. I was also think about getting in at 20. Emerald Research issued a research rapport on IOM today. You can get it from their sit at: http://www.emeraldresearch.com/ It costs 9.95 USD. I did not buy it, so I do not know what it says. >Both HDCO is down 2 at 48 and SGMA is a bit lower on a weak volume. >That's what I could observe during this one hour break. SGMA is holding uo remarkably IMHO. Let's hop efor a few good days next week. :-) My ALPH did well today: +7 %. It is features in IBD's New America today (Fri 13 dec). My ROSS is also looking strong. APCC still in nice base between 24 - 25. Cheers, ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: Re: [CANSLIM] "Selfish" lurkers Date: 13 Dec 1996 22:00:28 -0500 (EST) HJS wrote: [...] > I bought BSPT based on the suggestion from one of the guest on > Louis Rukiser (sp?) show. I bought them at 9 3/4 and sold them at 6 1/4. > I also buy VJET at 11 3/4 and sold them at 7 1/4. Loss big on these two. I'm sorry to hear that. I hope you learned something from those expensive classes. > The winers I had were BLY, LSI, CSCO, OC, and KM. I did not get the golden > opportunity to buy Intel, Motorola, nor HewletPacker. Beacuse all my money > are tied up in the winners. Sight! Don't worry about it. There's gonna be many other winners in the future as well. Not all of the boats have sailed away. ;^) > I notice most of the charts shown in the IBD seem to form cup. they are small > cup, wide and shallow cup, deep and narrow cup, .... Am I correct on this? Hmmm, you gotta be more specific here. And I'm not exactly the expert for cup-handle pattern recognition. Lately, I even forgot about the cup. The handle (the base) with a proper price and volume behavior is the most important thing when watching for breakouts, I think. > Thanks! > > > HJS > > I really have no experience on Canslim hence can not contribute too much > discussion about it. Me neither. Did you read O'Neil's book though? That can be a good start. Same as many others here, I refer to its chapers regularly. There's too much stuff to remember all at once. Cheers, Zoran ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: Re: [CANSLIM] IOM Date: 14 Dec 1996 01:06:59 -0500 (EST) Johan wrote: > Emerald Research issued a research rapport on IOM today. You can get it from > their sit at: > http://www.emeraldresearch.com/ It costs 9.95 USD. I did not buy it, so I do > not know what it says. Me neither. Frankly, I don't need to see the report. The chart speaks 1000 words. There are piles of "reports" on Iomega, but they are meaningless IMHO. IOM is driven by mass hysteria, and it is mainly a psychological and emotional phenomenon. I enjoy studying it. > >Both HDCO is down 2 at 48 and SGMA is a bit lower on a weak volume. > >That's what I could observe during this one hour break. > > SGMA is holding uo remarkably IMHO. Let's hop efor a few good days next > week. :-) Yep, we'll see. I still think there's more juice in HDCO, too. > My ALPH did well today: +7 %. It is features in IBD's New America today (Fri > 13 dec). My ROSS is also looking strong. APCC still in nice base between 24 > - 25. You take good care of your honeys, Johan. BTW, from all the ELECTR-SEMI stocks featured in the Weekend Graphic Review, I liked SEMX the most. Closed at 13 1/4 Fri with a strong upward price/volume momentum. I'd watch that one on Monday as well. And finally a question: What's a "trailing PE"? Cheers, Zoran ------------------------------------------------------------------------------- From: "tom worley" Subject: [CANSLIM] Re: Trailing PE Date: 14 Dec 1996 05:31:47 -0500 A trailing PE is the PE based on the past 12 months, which O'Neill generally ignores as it reflects what the company has DONE. O'Neill looks at the forecasted PE for the next 12 months as this reflects future expectation (what it is expected TO DO). Unfortunately, the market at large still looks at trailing PE, when you pull up a full quote on a symbol, the PE displayed is for trailing, therefore I still watch it. It is also significant since many stocks will trade within a historical range on trailing PE, so when a stock price has risen to where the PE approaches its historic high, it can suggest time for the stock to base or retreat until another qtr earnings are plugged in, thus lowering the new trailing PE (assuming it is a pos qtr earnings) and giving the price room to move higher within the historic range. ---------- > From: Zoran Mitrovski > To: canslim@xmission.com > Cc: Zoran Mitrovski > Subject: Re: [CANSLIM] IOM > Date: Saturday, December 14, 1996 1:06 AM > > And finally a question: > What's a "trailing PE"? > > Cheers, > Zoran ------------------------------------------------------------------------------- From: "fjsabour" Subject: [CANSLIM] Re: Iomega Date: 14 Dec 1996 13:30:04 -0800 > I've been watching IOM all day. I was also think about getting in at 20. Johan, IOM has been moving between 20 and 26 for the past 2-3 months. Yesterday it broke the support line at 20. Now, 20 is resistance line, and IOM is heading south toward the next support line which is at $14. Unless IOM breaks $20 with impressive volume, smart money should be on the short side. Fred ---------- > From: Johan Van Houtven > To: canslim@xmission.com > Subject: Re: [CANSLIM] IOM > Date: Friday, December 13, 1996 2:37 PM > > At 03:47 PM 12/13/96 -0500, Zoran wrote: > > > >IOM broke an important psychological support level at 20 today, > >on volume much higher than average. The 400k that brought it > >down from 19.9 to 19.6 looks particularly scary to me. > >It's at 19 as I write this. > > I've been watching IOM all day. I was also think about getting in at 20. > ------------------------------------------------------------------------------- From: "fjsabour" Subject: [CANSLIM] Introduction Date: 14 Dec 1996 13:09:41 -0800 Greetings, My name is Fred, and I have been an investor and trader for 15 years. I have been lurking this list for about 3 weeks and thought this is a good time to jump in and try to contribute. I am a bit amused with the attitude of some of the Canslim list members. Let me explain. I am under impression that the philosophy behind the Canslim system is that investors (not traders), do their study well enough that there is no need to panic or bail out the day, the week, or the month after the original purchase unless there is a giant change in the market conditions or an unexpected event that will cause fundamental shift in the company operation. Or, for reasons unclear to investor, the stock falls a significant and unreasonable amount (determined by various methods like moving averages, percentage, etc.). Other than these reasons why should the *investor* try to bail out of a company that is dominant, it's earnings growth is great, and has reasonable number of institutional followers that agree with you about the prospects of the company, etc. Canslim is a stock selection method for investors, not traders. Unless... we are all technical analysts and nimble *traders* hiding under Canslim cover, and care only about cups and handles. But that is another subject for another time. Fred S. ------------------------------------------------------------------------------- From: "tom worley" Subject: [CANSLIM] Fw: CRASH ALERT Date: 15 Dec 1996 05:23:18 -0500 In assessing market conditions (M), it is important to recognize that a volatile mkt is often driven by psycological factors more than fundamental or logical reasoning. This recent post on the usenet groups is provided first, for humor, and second for recognizing the thinking going on. On the other hand, during the past week I have seen a slight increase in bearish comments, which is encouraging to me. The attitude has been far to bullish lately. tom w ---------- > From: Deemy > Newsgroups: misc.invest.stocks; misc.invest.technical; misc.invest.futures > Subject: Re: CRASH ALERT > Date: Saturday, December 14, 1996 11:49 AM > > robnich@ix.netcom.com (Bob Nichols) wrote: > > >In article <1785AFED9S86.JPA94001@UConnVM.UConn.Edu>, Stock Market Update wrote: > > >> ***CRASH ALERT*** > >> > >> J. Adams > >> December 10th, 1996 > > > >Ah, at last! I've been waiting impatiently for this, having seen similar > >warnings at Dow 4000, 4100, 4200, 4300, 4400, 4500, 4600, 4700 etc., etc., > >as we passed through the 5000's and up to 6000, but strangely, not in > >recent weeks as we climbed to 6500. > > >Here is a prediction of my own: the Sun will collapse upon itself and > >become a nova (or perhaps even a supernova), and all life on Earth will be > >extinguished as the planet incinerates. This will happen sometime in the > >next 10 billion years. Get ready. > > Nah, the Sun does not have enough mass for Nova, more probable Red > Giant, then dwarf, and probably within 2 billion years. SO plenty of > time for a Dow Top :) > > Mr 50% > ~~~~~~~~~~~~~~~~~~~~~~~ > ~~ Time Tells Trend ~~ :) > ~~~~~~~~~~~~~~~~~~~~~~~ > > ------------------------------------------------------------------------------- From: patrick.wahl@unpcbbs.cts.com (Patrick Wahl) Subject: [CANSLIM] Chart Patterns Date: 14 Dec 1996 17:59:00 GMT I was scrolling through my charts, noticing the billions of dollars in trades that I have missed in various ways, and I noticed a number of 2B trades, a pattern I've only recently become aware of. This is not exactly Canslim, but might still be of interest. The 2B pattern is something discovered by Vic Sperandeo and described in both of his books, which are both very good, BTW. The trade goes like this: when a stock makes a low, then recovers by some amount, then comes back down and tests that old low and breaks it by a small amount, you want to buy at the level of the first low, and use a stop below the most recent low. If this is confusing, here are a couple of extremely obvious examples: Look at Adaptec, where your buy would have been at the July low, where prices broke the January low, then recovered. Also, note a short sale 2B setup in late April, late May. Another example, 3 Com (COMS), with a low in April, another lower low in July. 3 Com has doubled from the July low. ------------------------------------------------------------------------------- From: patrick.wahl@unpcbbs.cts.com (Patrick Wahl) Subject: [CANSLIM] Introduction Date: 14 Dec 1996 14:41:00 GMT FJ>From: "fjsabour" I am a bit amused with the attitude of some of the FJ>Canslim list members. Let me explain. FJ>I am under impression that the philosophy behind the Canslim FJ>system is that investors (not traders), do their study well FJ>enough that there is no need to panic or bail out the day, the I don't know if I am one of the people that you have found amusing, but I agree with your point, and meant to say something about this in regard to a few posts that floated by this week. I think it is important for the investor to remember that he isn't solely concerned with the squiggle on the screen in front of him (the chart pattern). That squiggle represents a company with products and earnings and sales and so on, and the big picture, the prospects for that company in the next 6-12 months are also a consideration. ------------------------------------------------------------------------------- From: patrick.wahl@unpcbbs.cts.com (Patrick Wahl) Subject: [CANSLIM] Re: Trailing PE Date: 14 Dec 1996 11:53:00 GMT ST>From: "tom worley" ST>A trailing PE is the PE based on the past 12 months, which O'Neill ST>generally ignores as it reflects what the company has DONE. O'Neill looks ST>at the forecasted PE for the next 12 months as this reflects future ST>expectation (what it is expected TO DO). Unfortunately, the market at large Of course, that future PE is only as good as the earnings forecast, and I have learned the hard way (lost money, that is) that those earnings forecasts in some cases aren't much more than a guess. ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: Re: [CANSLIM] Introduction Date: 15 Dec 1996 11:45:41 -0500 (EST) Fred wrote: > Greetings, > > My name is Fred, and I have been an investor and trader for 15 > years. I have been lurking this list for about 3 weeks and > thought this is a good time to jump in and try to contribute. Welcome, Fred. We can always use any wisdom coming from your 15 years on the market. > I am a bit amused with the attitude of some of the > Canslim list members. Let me explain. > I am under impression that the philosophy behind the Canslim > system is that investors (not traders), do their study well > enough that there is no need to panic or bail out the day, the > week, or the month after the original purchase unless there is a > giant change in the market conditions or an unexpected event > that will cause fundamental shift in the company operation. Or, > for reasons unclear to investor, the stock falls a significant > and unreasonable amount (determined by various methods like > moving averages, percentage, etc.). And what about the novice investors who are almost always unsure whether they have "done their study well", or the stock doesn't move down but stays where bought and moves sideways? Is a "proper" canslimer to just sit and watch while dosens of full fledged breakouts are taking place at the same moment elsewhere? And who said that Canslim (and I mean every aspect of it and every line of the book) is The Bible of investing? I don't see it as a religion either. If I say I am a canslimer that doesn't necessarily mean that I use it exclusively and that I piss on all of the remaining market wisdom out there. I have a feeling that I have been among the ones with the shortest fuses around here so far, so I figured that I was the one that amused you the most. If you read my most recent postings you'd see how I explained the reasoning behind each of my actions. I'd be glad to learn where you think I have made a mistake. I somehow know that I personally won't feel a similar amusement 15 years down the road when I join a forum and watch the new investors struggling to learn, each by their own ways, each with their own stories, their own characters, their own self-perception, their own levels of risk and each paying for their own mistakes. > Other than these reasons why should the *investor* try to bail > out of a company that is dominant, it's earnings growth is great, > and has reasonable number of institutional followers that agree > with you about the prospects of the company, etc. > Canslim is a stock selection method for investors, not traders. It doesn't have to be "bailing out". I have always wondered what's the difference between an investor and a trader. The way I see it, there is none. Both put money into the market with an intention of getting more when they take them out be, it 5 minutes or 5 years later. I cannot see how can someone be an investor without being a trader at the same time, and vice versa. Would you mind explaining your distinction between an investor and a trader? Is the difference solely in the timeframe of holding the position, and if so which is the threshold time period that distinguishes a trader from an investor? > Unless... we are all technical analysts and nimble *traders* > hiding under Canslim cover, and care only about cups and > handles. But that is another subject for another time. Investing is the subject. Not placing people into folders with preassigned labels on them. After reading many books on investing one of the things I learned that the best investors were the strongest individualists having the craft to learn the wisdom from others and mold it into a perfect fit with their own psychological structure. The more they knew about the outside and their inner worlds the better the mold and the final results. > Fred S. Cheers, Zoran ------------------------------------------------------------------------------- From: Johan Van Houtven Subject: Re: [CANSLIM] Chart Patterns Date: 15 Dec 1996 20:45:23 +0100 A lot of techs bottomed in the summer months (around July/August)... 2B = double bottom? At 05:59 PM 12/14/96 GMT, you wrote: >I was scrolling through my charts, noticing the billions of dollars in >trades that I have missed in various ways, and I noticed a number of 2B >trades, a pattern I've only recently become aware of. This is not >exactly Canslim, but might still be of interest. > >The 2B pattern is something discovered by Vic Sperandeo and described in >both of his books, which are both very good, BTW. The trade >goes like this: when a stock makes a low, then recovers by some amount, >then comes back down and tests that old low and breaks it by a small >amount, you want to buy at the level of the first low, and use a stop >below the most recent low. > >If this is confusing, here are a couple of extremely obvious examples: >Look at Adaptec, where your buy would have been at the July low, where >prices broke the January low, then recovered. Also, note a short sale >2B setup in late April, late May. Another example, 3 Com (COMS), with a >low in April, another lower low in July. 3 Com has doubled from the >July low. > > ------------------------------------------------------------------------------- From: Johan Van Houtven Subject: Re: [CANSLIM] Introduction Date: 15 Dec 1996 20:45:21 +0100 Patrick, I most probably am the one who 'fjsabour' found amusing. I''ll elaborate on the stocks with what I called 'nice' chart patterns. And I did not buy SOLELY because of the chart pattern. I have a watchlist of CANSLIM stocks and I look at the chart to determine WHEN I want to buy them. BTGC: It's a CANSLIM kind of stock AND the chart looked good. Look at the chart. At around 9 dec there is a significant volume% increase. BTGC is a biotech, but one with earnings. It made the Individual Investor's MAGIC 25 list for 1997 (doesn't mean a thing, IMHO). I bought on Dec, 9 at 10 5/8 and sold on Dec 13 at 11. That's only 3.5% indeed. But in 4 days it is not bad, considering that you get only 3% per year on money in the bank here in Belgium. I sold because I needed the money to buy other CANSLIM stocks. And BTW I do have some biotech (NON CANSLIM stocks) in my portfolio. I am a Licentiaat Biochemistry (I don't know what that is in US terms. It is 4 year university here). So I understand a little bit about those companies. Currently I own LGND, NTII and IMGN. All LONG term (years). What other stocks do you guys want me to explain why I picked them? For next week I'm looking at AMRI and ADAC. Both CANSLIM. And yes I do think the charts of these are looking good. And I would appreciate the opinion of all the CANSLIM wizards here. Other CANSLIM stocks currently in my portfolio: APCC, ALPH, CMCI, ROSS and SGMA. Last but not least: Do I always use CANSLIM? No. It's my definately my favorite, but it is not a fanatic religion for me. The ultimate goal is to make money, not to follow CANSLIM each and every time. This is the CANSLIM list however, so let's keep on topic. :^) At 02:41 PM 12/14/96 GMT, you wrote: > >FJ>From: "fjsabour" >FJ>I am a bit amused with the attitude of some of the >FJ>Canslim list members. Let me explain. > >FJ>I am under impression that the philosophy behind the Canslim >FJ>system is that investors (not traders), do their study well >FJ>enough that there is no need to panic or bail out the day, the > >I don't know if I am one of the people that you have found amusing, but >I agree with your point, and meant to say something about this in regard >to a few posts that floated by this week. I think it is important for >the investor to remember that he isn't solely concerned with the >squiggle on the screen in front of him (the chart pattern). That >squiggle represents a company with products and earnings and sales and >so on, and the big picture, the prospects for that company in the next >6-12 months are also a consideration. > > ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: Re: [CANSLIM] IOM Date: 15 Dec 1996 16:59:27 -0500 (EST) Johan wrote: > Emerald Research issued a research rapport on IOM today. You can get it from > their sit at: > http://www.emeraldresearch.com/ It costs 9.95 USD. I did not buy it, so I do > not know what it says. Johan, the Fools (www.fools.com) analyze IOM in and out. I think it was there that I read that Emerald holds the BUY on IOM with a target at $35. JP Morgan, although lowering the quarter earnings estimate still reiterates it BUY with a price target at $38. Interesting stuff, especially because the stock is so overhyped and over-covered so it makes a unique mix of technical analysis, fundamentals and emotions among short-term and long-term investors alike. Cheers, Zoran ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] Re: Trailing PE Date: 15 Dec 1996 17:08:18 -0500 Earnings forecasts are just that, forecasts, predictions, whatever. You use the best tools available, but no company or analyst will guarantee a forecast. If you use forecasts from O'Neill, you usually have a consensus forecast of at least three analysts (O'Neill does not research cos, nor make forecasts). If you have access to First Alert, it shows how many analysts are being used. I have seen cos that practically get in bed with analysts and tell them everything, others are so closed mouth'd that the analysts are totally on their own in forecasting, so usually go low. In these cases you are very dependent on the competency of the analyst to analyze. Of course, forecasted PE/earnings is only one of many tools you should be using to differentiate between possible candidates. Just OMHO, as always. tom w ---------- > From: Patrick Wahl > To: canslim@xmission.com > Subject: [CANSLIM] Re: Trailing PE > Date: Saturday, December 14, 1996 6:53 AM > > > ST>From: "tom worley" > > ST>A trailing PE is the PE based on the past 12 months, which O'Neill > ST>generally ignores as it reflects what the company has DONE. O'Neill looks > ST>at the forecasted PE for the next 12 months as this reflects future > ST>expectation (what it is expected TO DO). Unfortunately, the market at large > > Of course, that future PE is only as good as the earnings forecast, and > I have learned the hard way (lost money, that is) that those earnings > forecasts in some cases aren't much more than a guess. ------------------------------------------------------------------------------- From: Jeff Beckham Subject: Re: [CANSLIM] Introduction Date: 15 Dec 1996 15:43:03 -0700 >>FJ>I am under impression that the philosophy behind the Canslim >>FJ>system is that investors (not traders), do their study well >>FJ>enough that there is no need to panic or bail out the day, the One of O'Neils strongest points is to limit your losses. If your stocks are down to their stop point and you don't "bail out", because you're a calm, cool investor not to be scared by the market direction, what's the point?? Always amuzing, sometimes even profitable :) Jeff Beckham ------------------------------------------------------------------------------- From: "fjsabour" Subject: Re: [CANSLIM] Introduction Date: 15 Dec 1996 15:29:08 -0800 Hello Zoran, Thanks for dissecting my message. I'm not sure why you felt the urge to blow your fuse like this. Please go back and re-read the original message. I was talking about the trader's attitude in approaching, buying, and selling stocks. This is not a personal issue. If it was, it would have been addressed as such. So, calm down. This is my answer to your fair question about traders and investors: As you know, stocks go up when there are more buyers than sellers, and they go down when pressure from sellers exceed buying interest. When as an INVESTOR you pick a stock for purchase, you are in essence saying, " I believe that this company's earnings will rise over the years " or " I believe the glamour status of this company will improve as time goes on," or " I expect the understated asset value to be recognized " or a combination of these three statements. You conclude these favorable fundamentals will create more buyers for the stock than sellers and that the stock will therefore go up in price. When you choose a stock for quick profits (say a few weeks, or in your case few days), it is another matter. Then you are saying, " I believe there will be more buyers than sellers in this stock in the next few weeks/days " How can you know what other people are going to do with this stock over the next few weeks? To be truthful, you can not. Just when you are convinced that a mass of buying interest will build up in a stock over the near term, someone with a large block of stock may want to sell. Countless elements can make it difficult to predict stock actions over a short period. Traders job is just about the most difficult way to make a buck! Fred ---------- > I have a feeling that I have been among the ones with the shortest fuses around here so far, so I figured that I was the one that > amused you the most. If you read my most recent postings you'd > see how I explained the reasoning behind each of my actions. > I'd be glad to learn where you think I have made a mistake. > I somehow know that I personally won't feel a similar amusement > 15 years down the road when I join a forum and watch the new > investors struggling to learn, each by their own ways, each > with their own stories, their own characters, their own > self-perception, their own levels of risk and each paying > for their own mistakes. > > > Other than these reasons why should the *investor* try to bail > > out of a company that is dominant, it's earnings growth is great, > > and has reasonable number of institutional followers that agree > > with you about the prospects of the company, etc. > > Canslim is a stock selection method for investors, not traders. > > It doesn't have to be "bailing out". > I have always wondered what's the difference between an investor > and a trader. The way I see it, there is none. Both put money > into the market with an intention of getting more when they take > them out be, it 5 minutes or 5 years later. I cannot see how can > someone be an investor without being a trader at the same time, > and vice versa. > > Would you mind explaining your distinction between an investor > and a trader? Is the difference solely in the timeframe of > holding the position, and if so which is the threshold > time period that distinguishes a trader from an investor? > > > Unless... we are all technical analysts and nimble *traders* > > hiding under Canslim cover, and care only about cups and > > handles. But that is another subject for another time. > > Investing is the subject. Not placing people into folders with > preassigned labels on them. After reading many books on > investing one of the things I learned that the best investors > were the strongest individualists having the craft to learn > the wisdom from others and mold it into a perfect fit with > their own psychological structure. The more they knew about > the outside and their inner worlds the better the mold and > the final results. > Cheers, > Zoran > ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: [CANSLIM] Watch List Date: 15 Dec 1996 19:09:45 -0500 (EST) OK, I spend couple of hours today on the Weekend Review. (HJS, I worked on my conference papers for the rest of the day ;^)). Well I liked SEMX and SGMA the most. All the rest had something I didn't like. I liked SEMX especially, and if it goes up tomorrow then I'd strap my seat belts and GO. Friday ended with a dense and tall group of volume spikes that pushed it upwards. As if everybody was buying and then the market closed and everybody was: "Dammit, I wish we had few more minutes." There was a price spike at 13.5 few months ago cause by a similar behavior, but it went down to the bottom of the cup after that. If it breaks the resistance at 13.5-14 tomorrow, it is likely it will go much higher. But thet's only me, and you know how much of an expert I am. Just tought I'd share my opinion on this one. Cheers, Zoran ------------------------------------------------------------------------------- From: patrick.wahl@unpcbbs.cts.com (Patrick Wahl) Subject: Re: [CANSLIM] Chart Patte Date: 15 Dec 1996 10:29:00 GMT JO>From: Johan Van Houtven JO>A lot of techs bottomed in the summer months (around July/August)... JO>2B = double bottom? Just trying to point out low risk entry methods at potential turning points. Look at the charts yourself and decide if the idea makes any sense. 2B is also a double top. Probably used more for futures, but it certainly seems to be applicable for stocks. If you or anyone else is interested in this, look at the two stocks I mentioned. If not clear on what I meant after looking at the charts, send me a note explaining where the confusion is and I'll try to elaborate. ------------------------------------------------------------------------------- From: patrick.wahl@unpcbbs.cts.com (Patrick Wahl) Subject: Re: [CANSLIM] Introductio Date: 15 Dec 1996 10:14:00 GMT JO>From: Johan Van Houtven JO>Subject: Re: [CANSLIM] Introduction JO>I''ll elaborate on the stocks with what I called 'nice' chart patterns. And JO>I did not buy SOLELY because of the chart pattern. I have a watchlist of JO>CANSLIM stocks and I look at the chart to determine WHEN I want to buy them. No need to defend your stock picks, hope I didn't make anyone feel that way. I myself buy exclusively on certain chart patterns, and I don't care how rosy a scenario anyone has for a stock from a fundamental point of view, I won't buy anything unless the chart sets up in a certain way. And if it doesn't go up, I am out. What I was trying to say is that an investor should have a watch list that has been screened such that the outlook for the company is pretty good, as well as can be determined, and then when you see a breakout, you buy, but once you have bought, don't be overly quick to take a profit due to worries that your profit will disappear. Give the stock time to make a move. Also, if you don't trust the price action in regards to certain news items, dump the stock. For ex., I once owned a stock that released very good earnings, and the price went down. Turned out there were a number of problems beginning to appear, but were known only to the institutional people, who started unloading. So the thing to do (I didn't do it), would be to sell the stock even though to all appearances it was still doing well. Hope this doesn't sound like double talk. Guess I am saying if the price is going up, don't try to anticipate sell offs that might or might not be ahead, trust the company to continue to perform well (fundamentals), but if something unexplicable happens, don't wait for the explanation - get out (technical picture). ------------------------------------------------------------------------------- From: Johan Van Houtven Subject: Re: [CANSLIM] Watch List Date: 16 Dec 1996 07:36:52 +0100 At 07:09 PM 12/15/96 -0500, Zoran wrote: >OK, I spend couple of hours today on the Weekend Review. >(HJS, I worked on my conference papers for the rest of >the day ;^)). Well I liked SEMX and SGMA the most. What about SGMA's high debt? >All the rest had something I didn't like. > >I liked SEMX especially, and if it goes up tomorrow Good luck with SEMX. I do not have the time to check it. It is 7.32 AM Monday morning here in Belgium. ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] Introduction Date: 16 Dec 1996 06:11:51 -0500 I think this is a decent explanation of the difference between a trader and an investor. What is missing is that this is a CANSLIM based group, and one fundamental of CANSLIM is buying on breakouts, which means the "watch" candidates are not overlooked, they do not have unrecognized assets, if anything they are already overhyped and trading at premiums. This puts this philosophy much closer to the trader than would be the case for a value based or a bottom fishing approach. Yes, CANSLIM is designed for everything from short to medium to long term hold. On the other hand, probably the most important rule is not to let losses get large. The typical investor, with a stock showing what the investor believes to be good fundamentals, will typically try to fight the market with logic and sound reasoning. Result: often he's steamrollered. I have had, too often, a stock go against me with no bad news or market conditions. If I didn't limit my losses, it would have been too late when the news was finally released to the general public regarding why the stock went down. This isn't to necessarily say the slide was caused by insiders, it only takes one analyst reading a just released 10Q a day or so sooner than I, and discover slipping profit margins, or increased inventory, or higher rate of returns, or mention of a future secondary, etc then drops his rating on the stock and sets off an avalanche of selling. By the time the downgrade is reported, the damage is done. Because CANSLIM is based on breakout, it also works for traders since, theoretically, at breakout point there is no overhead resistance, therefore a quick couple of points is possible even the same day. The diferences between traders and CANSLIMers mostly has to do with looking at momentum vs momentum combined with future fundamentals. The difference between traders and investors is far greater. Just my thoughts, having watched all types of players in the market. tom w ---------- > From: fjsabour > To: canslim@xmission.com > Subject: Re: [CANSLIM] Introduction > Date: Sunday, December 15, 1996 6:29 PM > > Hello Zoran, > > Thanks for dissecting my message. I'm not sure why you felt the > urge to blow your fuse like this. > > Please go back and re-read the original message. I was talking > about the trader's attitude in approaching, buying, and selling > stocks. This is not a personal issue. If it was, it would have > been addressed as such. > So, calm down. > > This is my answer to your fair question about traders and > investors: > As you know, stocks go up when there are more buyers than > sellers, and they go down when pressure from sellers exceed > buying interest. When as an INVESTOR you pick a stock for > purchase, you are > in essence saying, " I believe that this company's earnings will > rise over the years " or " I believe the glamour status of this > company will improve as time goes on," or " I expect the > understated asset value to be recognized " or a combination of > these three statements. You conclude these favorable > fundamentals will create more buyers for the stock than sellers > and that the stock will therefore go up in price. > When you choose a stock for quick profits (say a few weeks, or > in your case few days), it is another matter. Then you are > saying, " I believe there will be more buyers than sellers in > this stock in the next few weeks/days " How can you know what > other people are going to do with this stock over the next few > weeks? To be truthful, you can not. > Just when you are convinced that a mass of buying interest will > build up in a stock over the near term, someone with a large > block of stock may want to sell. Countless elements can make it > difficult to predict stock actions over a short period. Traders > job is just about the most difficult way to make a buck! > > > Fred > > ---------- > > > I have a feeling that I have been among the ones with the > shortest fuses around here so far, so I figured that I was the > one that > > amused you the most. If you read my most recent postings you'd > > see how I explained the reasoning behind each of my actions. > > I'd be glad to learn where you think I have made a mistake. > > I somehow know that I personally won't feel a similar > amusement > > 15 years down the road when I join a forum and watch the new > > investors struggling to learn, each by their own ways, each > > with their own stories, their own characters, their own > > self-perception, their own levels of risk and each paying > > for their own mistakes. > > > > > Other than these reasons why should the *investor* try to > bail > > > out of a company that is dominant, it's earnings growth is > great, > > > and has reasonable number of institutional followers that > agree > > > with you about the prospects of the company, etc. > > > Canslim is a stock selection method for investors, not > traders. > > > > It doesn't have to be "bailing out". > > I have always wondered what's the difference between an > investor > > and a trader. The way I see it, there is none. Both put money > > into the market with an intention of getting more when they > take > > them out be, it 5 minutes or 5 years later. I cannot see how > can > > someone be an investor without being a trader at the same > time, > > and vice versa. > > > > Would you mind explaining your distinction between an investor > > > and a trader? Is the difference solely in the timeframe of > > holding the position, and if so which is the threshold > > time period that distinguishes a trader from an investor? > > > > > Unless... we are all technical analysts and nimble *traders* > > > hiding under Canslim cover, and care only about cups and > > > handles. But that is another subject for another time. > > > > Investing is the subject. Not placing people into folders with > > > preassigned labels on them. After reading many books on > > investing one of the things I learned that the best investors > > were the strongest individualists having the craft to learn > > the wisdom from others and mold it into a perfect fit with > > their own psychological structure. The more they knew about > > the outside and their inner worlds the better the mold and > > the final results. > > Cheers, > > Zoran > > ------------------------------------------------------------------------------- From: shyu@ait.nrl.navy.mil Subject: Re: [CANSLIM] Re: Trailing PE Date: 16 Dec 1996 11:15:00 -0500 Question, How reliable is the estimated or projected P/E? >A trailing PE is the PE based on the past 12 months, which O'Neill >generally ignores as it reflects what the company has DONE. O'Neill looks >at the forecasted PE for the next 12 months as this reflects future >expectation (what it is expected TO DO). Unfortunately, the market at large >still looks at trailing PE, when you pull up a full quote on a symbol, the >PE displayed is for trailing, therefore I still watch it. It is also >significant since many stocks will trade within a historical range on >trailing PE, so when a stock price has risen to where the PE approaches its >historic high, it can suggest time for the stock to base or retreat until >another qtr earnings are plugged in, thus lowering the new trailing PE >(assuming it is a pos qtr earnings) and giving the price room to move >higher within the historic range. > >---------- >> From: Zoran Mitrovski >> To: canslim@xmission.com >> Cc: Zoran Mitrovski >> Subject: Re: [CANSLIM] IOM >> Date: Saturday, December 14, 1996 1:06 AM >> >> And finally a question: >> What's a "trailing PE"? >> >> Cheers, >> Zoran Haw-Jye (Howard) Shyu e-mail: shyu@ait.nrl.navy code 5582 phone: (202)404-7331 Naval Research Lab ------------------------------------------------------------------------------- From: "David F. Cameron" Subject: Re: [CANSLIM] Introduction Date: 16 Dec 1996 8:50:10 CST OK, I'm due for my 2 cents here... > > I think this is a decent explanation of the difference between a trader and > an investor. What is missing is that this is a CANSLIM based group, and one > fundamental of CANSLIM is buying on breakouts, which means the "watch" > candidates are not overlooked, they do not have unrecognized assets, if > anything they are already overhyped and trading at premiums. This puts this > philosophy much closer to the trader than would be the case for a value > based or a bottom fishing approach. Yes, CANSLIM is designed for everything > from short to medium to long term hold. On the other hand, probably the > most important rule is not to let losses get large. The typical investor, > with a stock showing what the investor believes to be good fundamentals, > will typically try to fight the market with logic and sound reasoning. > Result: often he's steamrollered. I have had, too often, a stock go against > me with no bad news or market conditions. If I didn't limit my losses, it > would have been too late when the news was finally released to the general > public regarding why the stock went down. This isn't to necessarily say the > slide was caused by insiders, it only takes one analyst reading a just > released 10Q a day or so sooner than I, and discover slipping profit > margins, or increased inventory, or higher rate of returns, or mention of a > future secondary, etc then drops his rating on the stock and sets off an > avalanche of selling. By the time the downgrade is reported, the damage is > done. ... This is something which I am still learning the hard way, but much less often than before. But I think it is the most crucial part of the reply to Fred's posting! You and I as investors or traders can NOT know everything about an individual company. If there is an unexplained price drop down - it often means something is going to happen in a negative direction - but the news isn't out yet. I have found that if there is one common hallmark of successful traders -- well... actually two ... 1.) Develop a successful system for selecting stocks, 2.) Cut your losses - set a stop point no matter HOW much you like the company. This could mean you get stopped out of a company you like - only to watch it go back - but CANSLIM's philosophy is - oh well, there are thousands of stocks out there - don't risk losing too much of your starting capital. NOw I say this all with an "IMHO" attached, because I'm getting killed this year. I've mentioned before that I've made money using CANSLIM principles, doubling my money last year. This year, I'm down on the year. Part of the reason is a gap down by a stock - but another part is that I've taken a LOT of 8-10% losses. Finally, this has affected my judgment. There is a part of me that does not want a loss carryover this year - so I realize that some of my purchases were colored by this. But... most successful investors & traders still live by the cut your losses approach (unless your name is Warren Buffett...) > Because CANSLIM is based on breakout, it also works for traders since, > theoretically, at breakout point there is no overhead resistance, therefore > a quick couple of points is possible even the same day. > The diferences between traders and CANSLIMers mostly has to do with looking > at momentum vs momentum combined with future fundamentals. The difference > between traders and investors is far greater. .. Again, complete agreement .. > Just my thoughts, having watched all types of players in the market. > tom w > > ---------- p.s. To those of you on the IOM front - I called it wrong. Zoran, I'm out with another 10% loss. ;-( Dave dcameron@harper.cc.il.us ------------------------------------------------------------------------------- From: "KNOWLES, RICHARD" Subject: [CANSLIM] SFAM running up Date: 16 Dec 1996 10:09:52 -0500 Hey Canslimmers, Glance at SFAM. On the handle and running up after passing 26. Rich Knowles ------------------------------------------------------------------------------- From: shyu@ait.nrl.navy.mil Subject: Re: [CANSLIM] Introduction Date: 16 Dec 1996 11:49:57 -0500 Tom: I like your post very much. I have to admit that the reason that I bought the Kmart and ValueJet is bottom fishing. Kmart did me good, I bought at 8 and sold at 12 in four months. I thought that I can repeat it with VJET, but I was wrong. The insiders (cofounders, CEO) are selling Vjet in big wave and I was too late to know that. As to the BSPT, the number one bicycle helmet manufacture, its fundamental has not changed since I bought it. I have tied my money in it too long (almost one year and loossing money not to mention the potential interest from bank). SO I decided to take a loss, and use the left over to buy a "better" stock. I am still learning. I want to know how good is my own performance. If I can not achieve 15% annual retrun on my account. I think I will give up the idea of trading stock by myself. I'll buy mutual fund instead. HJS >I think this is a decent explanation of the difference between a trader and >an investor. What is missing is that this is a CANSLIM based group, and one >fundamental of CANSLIM is buying on breakouts, which means the "watch" >candidates are not overlooked, they do not have unrecognized assets, if >anything they are already overhyped and trading at premiums. This puts this >philosophy much closer to the trader than would be the case for a value >based or a bottom fishing approach. Yes, CANSLIM is designed for everything >from short to medium to long term hold. On the other hand, probably the >most important rule is not to let losses get large. The typical investor, >with a stock showing what the investor believes to be good fundamentals, >will typically try to fight the market with logic and sound reasoning. >Result: often he's steamrollered. I have had, too often, a stock go against >me with no bad news or market conditions. If I didn't limit my losses, it >would have been too late when the news was finally released to the general >public regarding why the stock went down. This isn't to necessarily say the >slide was caused by insiders, it only takes one analyst reading a just >released 10Q a day or so sooner than I, and discover slipping profit >margins, or increased inventory, or higher rate of returns, or mention of a >future secondary, etc then drops his rating on the stock and sets off an >avalanche of selling. By the time the downgrade is reported, the damage is >done. >Because CANSLIM is based on breakout, it also works for traders since, >theoretically, at breakout point there is no overhead resistance, therefore >a quick couple of points is possible even the same day. >The diferences between traders and CANSLIMers mostly has to do with looking >at momentum vs momentum combined with future fundamentals. The difference >between traders and investors is far greater. >Just my thoughts, having watched all types of players in the market. >tom w > Haw-Jye (Howard) Shyu e-mail: shyu@ait.nrl.navy code 5582 phone: (202)404-7331 Naval Research Lab ------------------------------------------------------------------------------- From: "fjsabour" Subject: [CANSLIM] Investor/Trader and Canslim Date: 16 Dec 1996 10:07:02 -0800 Tom, Right on. Every investor needs an approach to ENTRY and EXIT points. It can be technical evaluation of the chart (which I like, and CANSLIM recommends, such as double bottom, cup and handle, head and shoulder, etc.), or fundamentals (such as projected earnings, or visiting the store and checking out the number of parked cars in the parking lot!!). I'm with you so far. EXIT should be as methodical as ENTRY. I personally draw two medium term moving averages and when they cross, I'm out. That is my *fluid* stop. A more mechanical approach is what Canslim recommends (8% or so). So far so good! Now, if I watch the tape and see a couple of large trades on down tick, and decide to EXIT( ignoring my pre-set or previously decided stops), then I am not a Canslimmer. I'm a true stock trader. Nothing wrong with that. It is not Canslim. If I choose a company with a large debt(ex. SGMA), or too much institutional followers(ex. IOM), then I'm not a Canslimmer either. Again nothing wrong with that method. I do it sometimes when the chart pattern looks solid and attractive. But it is not investment and surely is not Canslim. My 2 cents. Fred ---------- > From: tom worley > To: canslim@xmission.com > Subject: Re: [CANSLIM] Introduction > Date: Monday, December 16, 1996 3:11 AM > > I think this is a decent explanation of the difference between a trader and > an investor. What is missing is that this is a CANSLIM based group, and one > fundamental of CANSLIM is buying on breakouts, which means the "watch" > candidates are not overlooked, they do not have unrecognized assets, if > anything they are already overhyped and trading at premiums. This puts this > philosophy much closer to the trader than would be the case for a value > based or a bottom fishing approach. Yes, CANSLIM is designed for everything > from short to medium to long term hold. On the other hand, probably the > most important rule is not to let losses get large. The typical investor, > with a stock showing what the investor believes to be good fundamentals, > will typically try to fight the market with logic and sound reasoning. > Result: often he's steamrollered. I have had, too often, a stock go against > me with no bad news or market conditions. If I didn't limit my losses, it > would have been too late when the news was finally released to the general > public regarding why the stock went down. This isn't to necessarily say the > slide was caused by insiders, it only takes one analyst reading a just > released 10Q a day or so sooner than I, and discover slipping profit > margins, or increased inventory, or higher rate of returns, or mention of a > future secondary, etc then drops his rating on the stock and sets off an > avalanche of selling. By the time the downgrade is reported, the damage is > done. > Because CANSLIM is based on breakout, it also works for traders since, > theoretically, at breakout point there is no overhead resistance, therefore > a quick couple of points is possible even the same day. > The diferences between traders and CANSLIMers mostly has to do with looking > at momentum vs momentum combined with future fundamentals. The difference > between traders and investors is far greater. > Just my thoughts, having watched all types of players in the market. > tom w ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: Re: [CANSLIM] Introduction Date: 16 Dec 1996 13:56:17 -0500 (EST) Fred wrote: > Please go back and re-read the original message. I was talking > about the trader's attitude in approaching, buying, and selling > stocks. This is not a personal issue. If it was, it would have > been addressed as such. > So, calm down. I didn't see anything personal. If it was, it would have been addressed as such. So calm down. More follows... > This is my answer to your fair question about traders and > investors: > As you know, stocks go up when there are more buyers than > sellers, and they go down when pressure from sellers exceed > buying interest. When as an INVESTOR you pick a stock for > purchase, you are > in essence saying, " I believe that this company's earnings will > rise over the years " or " I believe the glamour status of this > company will improve as time goes on," or " I expect the > understated asset value to be recognized " or a combination of > these three statements. You conclude these favorable > fundamentals will create more buyers for the stock than sellers > and that the stock will therefore go up in price. > When you choose a stock for quick profits (say a few weeks, or > in your case few days), it is another matter. Then you are > saying, " I believe there will be more buyers than sellers in > this stock in the next few weeks/days " Well isn't the "investor" saying the same thing about his picks: "I believe there will be more buyers than sellers in this stock in the next X amount of time"? It is the amount of buyers vs. sellers that ultimately define the price of the stock -- not the levels of the earnings or the glamour of the company. Both 'traders' and 'investors', the way you defined them, count on an increased ratio of buyers vs sellers to push the price up. > How can you know what > other people are going to do with this stock over the next few > weeks? To be truthful, you can not. So you are basicaly saying that the further the phenomenon into the future the better prediction of its behavior can you make. I respectfully beg to differ. If it is hard for me to predict what people will do with a stock in the next few weeks, then it would be many times as hard for you to predict what people will do with a stock further ahead in the future. > Just when you are convinced that a mass of buying interest will > build up in a stock over the near term, someone with a large > block of stock may want to sell. Countless elements can make it > difficult to predict stock actions over a short period. Noone said making money was easy. Why should less than "countless" elements be involved when a longer period of time is in question? The way I see investing (i.e. both 'trading' and 'investing' in your case) it is all a matter of maximizing the predictability of the price moves so that you can distribute your assets along the "TIME" and the "STOCKS" axes accordingly as to maximize your profits. There is one single 2-D time-stocks continuum (chessboard). The modern mantra preached to the "individual investor" is 1) go for the long haul and 2) diversify, and if you disregard it than you are either too stupid not to listen what the "wise men" are telling you or you are too greedy and agressive and will pay for those sinns eventualy. To me that's all a bunch of crap. If what really worked on the market was the same thing that was accepted by the masses then everybody would win on the market, and we all know that that's impossible. Btw, you avoided the answer to my question. Seems that the time-length is the only parameter that distinguishes a trader from an investor. What is the threshold timelength? Define "short period". > Traders > job is just about the most difficult way to make a buck! Speaking from experience, or is this some common market wisdom that I have yet to comprehend? And "investors" have it much easier with higher profits to boot, right? For those of you that got down to here. I APOLOGIZE for the lengthy article. I'll try not to waste your time like this again. Cheers, Zoran ------------------------------------------------------------------------------- From: "Michael R. Jeffers" Subject: [CANSLIM] SEMX Date: 16 Dec 1996 12:43:29 PST To Zoran and all others that touted this stock, THANKS! I purchased a lot (which is a lot for me) at 14.25. Although I fit more into the lurker (which rhymes with shirker) mode, I appreciate the hard work all of you do in researching good picks, and then tell us about them. Whether or not this stock blasts through the roof, or falls into the cellar doesn't really matter. This is the type of company that has all the technical and fundamental properties I like, in particular a discounted PE relative to it's group and a strong group. Had I known about the stock myself, I would have bought it anyway. You guys just brought it to my attention. Of course three months down the line should the stock fail, I'll be kicking myself in the lower regions since I did only real quick checking on the company. (smile) There is one question I have however. I noticed in the IBD that it's group strength has advanced in three months from a low 100+ to a single digit high. I would think that group advance is a bit too fast for proper validation. Is that what others think, or do you think that the quick group rise is due to the beginning of a long term strong upward trend? Once again, thanks for being the great gals and guys you all are! Just Little 'Ole Me, Michael R. Jeffers ------------------------------------------------------------------------------- From: Michael A Langston Subject: trading vs investing (was re: [CANSLIM] Introduction) Date: 16 Dec 1996 16:05:14 -0500 ok fellas, mainly zoran and fred, i ain't gonna get into this argument -- we all know that canslim has momentum as one of it's components, and thus it's stop-loss rules force us all to act like traders at times (esp on failed b/o's) but i do think one of zoran's comments deserves a response: > If what really worked on the market was the same thing that > was accepted by the masses then everybody would win on the > market, and we all know that that's impossible. impossible in zero-sum games like commodity futures, yes, but not impossible in long-side stock transactions over time -- you musta been thinking of something else when you wrote that btw, seasons greetings to posters and lurkers alike! mike (who's still in cash, and still not encouraged by the recent "open-up-but-close-down" scenarios we've been seeing) ------------------------------------------------------------------------------- From: Linda Thomas Subject: [CANSLIM] Commentary on 'M' Date: 16 Dec 1996 18:05:45 -0500 I've been meaning to post this since Friday, but this was my first = opportunity. I've noticed that five month long trend lines on the Dow, S&P 500 and = NASDAQ have all been broken in the last few days of last week. The S&P = line was broken on Wednesday, the Dow on Thursday, and the NASDAQ on = Friday. With today's 23 point drop in the NASDAQ, it is now back to where it was = in the beginning of November. This seemed like a serious resistance = level at the time since it took three tries to get the NASDAQ composite = over 1260. From a chart perspective, if we drop below 1260, it looks = like we could go all the way to 1200. The Dow looks like it could drop to 6060 and the S&P to 715. I'd guess = that if we can rally off these levels then this could be a short term = correction but if we break them, then it could be a long way down. Of course, take this with however many grains of salt you feel = appropriate. I make no claims of being an expert or even correct. It = just seems likely from my basic interpretation of the charts. -Linda ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: Re: trading vs investing (was re: [CANSLIM] Introduction) Date: 16 Dec 1996 20:50:17 -0500 (EST) Mike L. wrote: > but i do think one of zoran's comments deserves a response: > > > If what really worked on the market was the same thing that > > was accepted by the masses then everybody would win on the > > market, and we all know that that's impossible. > > impossible in zero-sum games like commodity futures, yes, but > not impossible in long-side stock transactions over time -- > you musta been thinking of something else when you wrote that I agree, Mike, it's not impossible in long-side stock transactions because there's always new value created by the companies that "spoil" he zero-sum. But just look at the pretty consistent 80% of money (or fund) managers that underperform the market and you'll catch my drift. Also if you look at the market volumes, you can sense that there is a pretty decent speculation involved in the stock market as well. I really wanted to say "beat" instead of "win on". Anybody care to tell me how "long" and "short" (a security) got their names? Cheers, Zoran ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] SFAM running up Date: 16 Dec 1996 21:20:06 -0500 I wouldn't be surprised if WON likes it as well ---------- > From: KNOWLES, RICHARD > To: 'canslim list' > Subject: [CANSLIM] SFAM running up > Date: Monday, December 16, 1996 10:09 AM > > Hey Canslimmers, > > Glance at SFAM. On the handle and running up after passing 26. > > Rich Knowles ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] Investor/Trader and Canslim Date: 16 Dec 1996 21:33:52 -0500 There is a danger to "micro managing" a stock position, and when several large trades can influence your position (either to buy or sell), then you are in trouble unless you are a true "day trader". I say this in the context of the market place. Often when a large block is traded, it is already placed in opposing hands. I have frequently seen a large block, 50,000 or more shares, trade at the bid, followed within minutes by a 50,000 share block a sixteenth or an eighth above the bid. This tells me the block was crossed. Yes, this does diminish other buying out there, but also says the stock is being handled. O'neill doesn't look trade by trade, he watches to see if the price of a stock is violating certain resistance/support levels, if it has broken some limit. He looks at daily and weekly up/down vol, accum and dist nrs, group performance, etc. I think watching a stock this closely will lead to you more often being shaken out on a winner than protected from a major gap down. tom w ---------- > From: fjsabour > To: canslim@xmission.com > Subject: [CANSLIM] Investor/Trader and Canslim > Date: Monday, December 16, 1996 1:07 PM > > Tom, > Right on. Every investor needs an approach to ENTRY and EXIT > points. It > can be technical evaluation of the chart (which I like, and > CANSLIM recommends, such as double bottom, cup and handle, head > and shoulder, etc.), or fundamentals (such as projected > earnings, or visiting the store and checking out the number of > parked cars in the parking lot!!). I'm with you so far. > EXIT should be as methodical as ENTRY. I personally draw two > medium term moving averages and when they cross, I'm out. That > is my *fluid* stop. A more mechanical approach is what Canslim > recommends (8% or so). So far so good! > > Now, if I watch the tape and see a couple of large trades on > down tick, and decide to EXIT( ignoring my pre-set or previously > decided stops), then I am not a Canslimmer. I'm a true stock > trader. Nothing wrong with that. It is not Canslim. > If I choose a company with a large debt(ex. SGMA), or too much > institutional > followers(ex. IOM), then I'm not a Canslimmer either. Again > nothing > wrong with that method. I do it sometimes when the chart > pattern looks solid and attractive. But it is not investment > and surely is not Canslim. > My 2 cents. > > Fred > > ---------- > > From: tom worley > > To: canslim@xmission.com > > Subject: Re: [CANSLIM] Introduction > > Date: Monday, December 16, 1996 3:11 AM > > > > I think this is a decent explanation of the difference between > a trader and > > an investor. What is missing is that this is a CANSLIM based > group, and one > > fundamental of CANSLIM is buying on breakouts, which means the > "watch" > > candidates are not overlooked, they do not have unrecognized > assets, if > > anything they are already overhyped and trading at premiums. > This puts this > > philosophy much closer to the trader than would be the case > for a value > > based or a bottom fishing approach. Yes, CANSLIM is designed > for everything > > from short to medium to long term hold. On the other hand, > probably the > > most important rule is not to let losses get large. The > typical investor, > > with a stock showing what the investor believes to be good > fundamentals, > > will typically try to fight the market with logic and sound > reasoning. > > Result: often he's steamrollered. I have had, too often, a > stock go against > > me with no bad news or market conditions. If I didn't limit my > losses, it > > would have been too late when the news was finally released to > the general > > public regarding why the stock went down. This isn't to > necessarily say the > > slide was caused by insiders, it only takes one analyst > reading a just > > released 10Q a day or so sooner than I, and discover slipping > profit > > margins, or increased inventory, or higher rate of returns, or > mention of a > > future secondary, etc then drops his rating on the stock and > sets off an > > avalanche of selling. By the time the downgrade is reported, > the damage is > > done. > > Because CANSLIM is based on breakout, it also works for > traders since, > > theoretically, at breakout point there is no overhead > resistance, therefore > > a quick couple of points is possible even the same day. > > The diferences between traders and CANSLIMers mostly has to do > with looking > > at momentum vs momentum combined with future fundamentals. The > difference > > between traders and investors is far greater. > > Just my thoughts, having watched all types of players in the > market. > > tom w ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] Re: Trailing PE Date: 16 Dec 1996 21:23:50 -0500 As reliable as the analysts who made the projections, the data they worked from, the companies they analyzed, the market the businesses made projections on, the employees who made the products, the sales staff who told the company what they would do the next qtr, etc. Come on, it's a forecast, for gods sake, it's not set in concrete, what part of "estimate" don't you understand? Forecasted PE is one element of what should be your "Plan", it allows you to anticipate what the mkt will do cuz you have an "idea" of what the mkt is EXPECTING!. If the nrs are in line or below, the stock should tank, if they are way ahead of expectation, stock should rally, anything in between, anybody's guess. Estimates will vary from analyst to analyst and co to co. If you want to try and apply this, Three Com (COMS) is due to report on 12/19, stock tanked over 4 pts today, short base around 65, better bases lower, Barron's forecasts 55 cents/share vs 37, Bear Stearns forecasts 57 vs 37, how many tech stocks have we seen lately (such as MU today reporting 10 cents including a 3 cent gain vs $1.51 a yr ago, expectation was from flat to 4 cents) where yr to yr was dismal, but stock did better than a very poor expectation? Here's one that's expected to beat last yr, let's see how good the analysts are on it, and what the mkt reaction is. Let's apply your question to Navy budget estimates, how many times do projects get completed at or under budget? Same thing, someone made an estimate, and it was factored on a lot of items out of control of the estimator. All it did was set a level of expectation, which Congress funded, then paid for the overage out of our pockets to keep the project going. tom w ---------- > From: shyu@ait.nrl.navy.mil > To: canslim@xmission.com > Subject: Re: [CANSLIM] Re: Trailing PE > Date: Monday, December 16, 1996 11:15 AM > ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] Introduction Date: 16 Dec 1996 21:43:08 -0500 I'll risk jumping in here just to say that EXPECTATION, not future profits, drives the price. ---------- > From: Zoran Mitrovski > To: canslim@xmission.com > Cc: Zoran Mitrovski > Subject: Re: [CANSLIM] Introduction > Date: Monday, December 16, 1996 1:56 PM > > Fred wrote: > (snip) > The modern mantra preached to the "individual > investor" is 1) go for the long haul and 2) diversify, Zoran, I always preached diversification to my clients, and will continue to do so. On the other hand, I am well diversified in my "paper" trading contest, and getting my head handed to me by, I suspect, one or two stock portfolios. (snip) > For those of you that got down to here. I APOLOGIZE for the > lengthy article. I'll try not to waste your time like this again. Zoran, you haven't wasted my time yet, and I'm not worried you will in the future. BTW, good call on SEMX, it's another I suspect O'Neill likes currently. > > Cheers, > Zoran ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: trading vs investing (was re: [CANSLIM] Introduction) Date: 16 Dec 1996 22:01:05 -0500 Welcome back, Mike. Thought you'd gone to sleep on us (or worse still, become a lurker!!!) (BTW, that's a call to all lurkers to at least come forward, introduce yourselves, and tell us a little about your background (investing and/or job skills) which could help support this group). I agree with Mike's comments on opening up and closing down, it's a disturbing pattern we are seeing too much of. I am even more concerned with the poor showing by NASDAQ compared to the NYSE composite and the bond mkt. For NYSE (understand DOW 30) to have paralleled today's NASDAQ performance, it would have had to close down over 130 pts, instead it was down about 38 pts. After an initial strong opening, techs failed miserably. Granted, NYSE was buoyed by the oils and the McDonnell/Boeing deal, and inflation concerns were hurt by higher oil prices (is this logical with Iran starting to pump??) Can we say MANIPULATION, kiddies? What's going on here, folks? I'm getting tired of the overworn "profit taking". Who's got profits left to take, at least short term? tom w ---------- > From: Michael A Langston > To: canslim@xmission.com > Subject: trading vs investing (was re: [CANSLIM] Introduction) > Date: Monday, December 16, 1996 4:05 PM > we all know that canslim has momentum as one of > it's components, and thus it's stop-loss rules force us all > to act like traders at times (esp on failed b/o's) > > but i do think one of zoran's comments deserves a response: > > > If what really worked on the market was the same thing that > > was accepted by the masses then everybody would win on the > > market, and we all know that that's impossible. > > impossible in zero-sum games like commodity futures, yes, but > not impossible in long-side stock transactions over time -- > you musta been thinking of something else when you wrote that > > btw, seasons greetings to posters and lurkers alike! > > mike (who's still in cash, and still not encouraged by the recent > "open-up-but-close-down" scenarios we've been seeing) ------------------------------------------------------------------------------- From: OWENTIME@delphi.com Subject: Re: [CANSLIM] Introduction Date: 16 Dec 1996 23:08:56 -0500 (EST) Re: discussions of traders vs. investors. I'm curious how many CANSLIMMERS out there prefer put/call options for leisurely strikes into their breakout stocks. ------------------------------------------------------------------------------- From: "fjsabour" Subject: [CANSLIM] Re: Investing ( Was:Introduction) Date: 16 Dec 1996 21:56:49 -0800 My apologies to list members. This is a long and BORING message!! Zoran, I will try to answer your questions and be brief at the same time. You know, I much rather be analyzing stocks :-) If after reading this message and the one I wrote this morning, you still have more questions or want to discuss this fascinating issue further, contact me directly. I will be more than happy to answer them the best I can, and spare the others from reading my long and boring messages. ---------- > Well isn't the "investor" saying the same thing about his > picks: "I believe there will be more buyers than sellers in this > stock in the next X amount of time"? It is the amount of buyers vs. > sellers that ultimately define the price of the stock -- not the > levels of the earnings or the glamour of the company. > Both 'traders' and 'investors', the way you defined them, > count on an increased ratio of buyers vs sellers to push the > price up. Yep. Investors, day traders, night traders, mid-day traders; They all want the ratio to be in favor of the buyers in the market. If the company has good earnings, and glamour, then odds are in favor of increased buyer ratio. > So you are basicaly saying that the further the phenomenon into > the future the better prediction of its behavior can you make. Who said that? Select a Canslim, or any fundamentally sound stock. Over time, the market (supply and demand rule) will take care of short term price hops. As an example, look at the 50-day moving average of a stock. Compare it to the daily prices. Most of the peaks and valleys are absent from the MA. Time element is at work here!! So if you look at trades, tick by tick, and get IN or OUT because of a large block of share traded on an uptick or downtick, you ARE a trader not an investor. You have mentioned this reaction to block trades when you were getting Out of HDCO and again on Friday while talking about IOM. Of course INVESTOR does not mean someone who wants to lose money and is relaxed about a stock which is sliding to hell. On the contrary, he/she will place stops at logical and reasonable areas to protect himself from getting burned. At the same time he/she does not let these little blips in price prevent him from potential price appreciation. > The way I see investing (i.e. both > 'trading' and 'investing' in your case) it is all a matter > of maximizing the predictability of the price moves so that > you can distribute your assets along the "TIME" and the > "STOCKS" axes accordingly as to maximize your profits. And how do you propose to maximize the predictability of the prices? By jumping in and out of a stock? Did you know there are hundreds of traders at the floor of each exchange who follow and trade only one or two stocks all day long, and DO NOT pay any commissions? How can you compete with them? The large block of stock that you just saw on your screen is OLD news to them. You must treat their action as a blip (while above your stops), and do not run to exits. > The modern mantra preached to the "individual > investor" is 1) go for the long haul and 2) diversify, and > if you disregard it than you are either too stupid not to > listen what the "wise men" are telling you or you are too > greedy and agressive and will pay for those sinns eventualy. > To me that's all a bunch of crap. I'm glad you are open minded. > If what really worked on the market was the same thing that was accepted by the > masses then everybody would win on the market, and we all know that that's impossible. No we do not. You are absolutely wrong. Look. According to a recent study by Money magazine, even if you are the world's most unlucky investor (not trader), and you put $5000 into the market at the October 1987 peak just before the crash, and then added equal sums the very day the market hit a high ever since then ( most unlucky individual ). Today you have a nice ~10.5% annual return. > Btw, you avoided the answer to my question. Seems that the > time-length is the only parameter that distinguishes a > trader from an investor. Not exactly. In my opinion the name of the game is discipline and time. Do your research, choose your entry point logically, set stops where they make sense, and let the games begin!! Oh...and remember, do not change your rules at the middle of the game. > > Traders job is just about the most difficult way to make a buck! > > Speaking from experience, or is this some common market wisdom > that I have yet to comprehend? Both. Fred ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] Re: Investing ( Was:Introduction) Date: 17 Dec 1996 06:57:01 -0500 I'm still waiting for the day I am bored by either a short or long posting in this group. Every one has contributed something, if not knowledge and experience, then at least a fresh perspective or humor. And the latter, frankly, has been sorely lacking in this market. tom w ---------- > From: fjsabour > To: canslim@xmission.com > Subject: [CANSLIM] Re: Investing ( Was:Introduction) > Date: Tuesday, December 17, 1996 12:56 AM > > My apologies to list members. This is a long and BORING > message!! ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] Introduction Date: 17 Dec 1996 06:41:52 -0500 I did very well in 1995 buying calls on the more expensive stocks, and would have done well in same way this year had I had the funds to use (on paper I got filthy rich). On the other hand, when I play options, it's anything but leisurely, mostly it's white knuckle cuz I'm betting on short term where time is my enemy.\ tom w ---------- > From: OWENTIME@delphi.com > To: canslim@xmission.com > Subject: Re: [CANSLIM] Introduction > Date: Monday, December 16, 1996 11:08 PM > > Re: discussions of traders vs. investors. > > I'm curious how many CANSLIMMERS out there prefer put/call options > for leisurely strikes into their breakout stocks. ------------------------------------------------------------------------------- From: "tom worley" Subject: [CANSLIM] COMS Date: 17 Dec 1996 07:26:02 -0500 If anybody can find the time, how about reviewing Three Com by CANSLIM standards and advising the group. I will try to do my homework, but without an assistant it's hard to find the time during the day, and I got to go to a co party tonight. thanks tom w ------------------------------------------------------------------------------- From: Craig Griffin Subject: [CANSLIM] Market Comment from DBC Date: 17 Dec 1996 21:07:51 GMT See following URL for today's market comment: http://www.dbc.com/cgi-bin/htx.exe/newsroom/newsroom.html?source=core/dbc Regards, Craig ------------------------------------------------------------------------------- From: Craig Griffin Subject: Re: [CANSLIM] Market Comment from DBC Date: 17 Dec 1996 22:51:08 GMT Ooops, sorry, I read my own post and it sounded like spam. Meant to say, that the market comment section at this URL for today sounds bearish and verify the signs of distribution I was seeing. It also mentions head and shoulder patterns on some stocks. At 09:07 PM 12/17/96 GMT, you wrote: >See following URL for today's market comment: > >http://www.dbc.com/cgi-bin/htx.exe/newsroom/newsroom.html?source=core/dbc > >Regards, >Craig > > ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: Re: [CANSLIM] Re: Investing Date: 17 Dec 1996 20:46:46 -0500 (EST) Fred wrote: > Zoran, > I will try to answer your questions and be brief at the same > time. You know, I much rather be analyzing stocks :-) You're right Fred. It seems that we both knew what the other one was trying to say. Cheers, Zoran ------------------------------------------------------------------------------- From: Haw-Jye Shyu Subject: Re: [CANSLIM] Re: Trailing PE Date: 18 Dec 1996 10:00:50 -0500 (EST) Here is my thought on Three Com (COMS). They may not consist with CANSLIM: 1. Currently at $ 72 3/8, 52 week high is $ 81 3/8. From the peak, COMS got a 11% correction. (data from DBC) 2. Trailing P/E ratio is 60.31. (from DBC) Based on this number, the stock owner is expecting an earning growth rate of 60% a year. (I got this idea from an article in WORTH, how to evaluate a growth stock). 3. The annual earing at 5/31/96 is $1.01. (from Barron ON-line) Therefore, based on the P/E ratio, the earning should at least be $1.62 (=1.01 * 1.6). 4. Quartely, the earing per share is $0.52 at 8/30/96. Based on the P/E ratio, the expected earing for this quarter should be at least $0.60 (i.e. 0.52 * 1.15 = 0.60). 5. the Pre-tax margin is 20.4 at 8/30/96. If this profit margin shrinked and combined with a disappointing earning. I doubt it is a good time to buy this share. After all, no company can maintain that kind of growth rate for 5 years and beyond. On the other hand, I am an amature and have lost money in thestock. Don't take my word too seriousely. HJS ------------------------------------------------------------------------------- From: Haw-Jye Shyu Subject: Re: [CANSLIM] Re: Trailing PE Date: 18 Dec 1996 10:51:10 -0500 (EST) Oh, Yes! I forgot the sell figure. Their sell growth rate is 1) 80% from 95 to 96 2) 57% from 94 to 95 3) 34% from 93 to 94 4) 51% from 92 to 93 If COMS can maintain the sell growth rat, better yet can improve it, the shrinking profit margin may not cause too much of trouble. HJS ----- Begin Included Message ----- From owner-canslim@xmission.com Wed Dec 18 10:42 EST 1996 Here is my thought on Three Com (COMS). They may not consist with CANSLIM: 1. Currently at $ 72 3/8, 52 week high is $ 81 3/8. From the peak, COMS got a 11% correction. (data from DBC) 2. Trailing P/E ratio is 60.31. (from DBC) Based on this number, the stock owner is expecting an earning growth rate of 60% a year. (I got this idea from an article in WORTH, how to evaluate a growth stock). 3. The annual earing at 5/31/96 is $1.01. (from Barron ON-line) Therefore, based on the P/E ratio, the earning should at least be $1.62 (=1.01 * 1.6). 4. Quartely, the earing per share is $0.52 at 8/30/96. Based on the P/E ratio, the expected earing for this quarter should be at least $0.60 (i.e. 0.52 * 1.15 = 0.60). 5. the Pre-tax margin is 20.4 at 8/30/96. If this profit margin shrinked and combined with a disappointing earning. I doubt it is a good time to buy this share. After all, no company can maintain that kind of growth rate for 5 years and beyond. On the other hand, I am an amature and have lost money in thestock. Don't take my word too seriousely. HJS ----- End Included Message ----- ------------------------------------------------------------------------------- From: patrick.wahl@unpcbbs.cts.com (Patrick Wahl) Subject: [CANSLIM] COMS Date: 18 Dec 1996 02:58:00 GMT ST>From: "tom worley" ST>Date: Tue, 17 Dec 1996 07:26:02 -0500 ST>Subject: [CANSLIM] COMS ST>If anybody can find the time, how about reviewing Three Com by CANSLIM ST>standards and advising the group. I will try to do my homework, but without Here are a few thoughts, at least - The stock has risen from a low of 34 in July to a high of 80, and a current price of around 76, obviously a gain of over 100 percent in a space of 5 months. It probably needs to take a rest here, form another base before it can be bought. It did bounce off of its 50 day moving average. I have heard that institutional investors will buy a stock when it touches its 50 day ma, but I don't know if that is an accurate statement. Anyway, COMS did seem to find some buying support down there, around 72 or so. From what I know of the fundamentals, COMS is in good shape. They have a wide product line and are able to offer products in a number of different areas. Earnings have been strong lately. I think the recent 10 point drop marks the end, temporarily, of this recent upmove. I think the stock needs to consolidate here, probably bounce around in the 70's for a while if it is eventually going to go higher. Watch for another base to form. ------------------------------------------------------------------------------- From: patrick.wahl@unpcbbs.cts.com (Patrick Wahl) Subject: [CANSLIM] the stock market Date: 18 Dec 1996 03:35:00 GMT All I have to say about the last 3 days is - Ouch. A couple of my stocks got clobbered. One stock I have that slowly but surely built up a 14 point gain over a period of two months gave back 10 of those points in two days. However, it had a 5 point rebound yesterday, and another point and change today. Let me just toss out a thought or two on why I held the stock and see if anyone finds it useful or disagrees with me - The selloff was on low volume and mirrored the market action. This didn't seem to indicate a problem with the company, that is, a situation where the market is going up, but the stock is going down. This was just a stock that got caught in the general technology downdraft. As far as I knew, there was no news on the company itself that should account for a 10 point drop (16% decline from where the high was, like I said, ouch). I had to go back to my Daily Graph chart and look at the numbers again, and remind myself of why I bought the stock. What I saw were 4 quarters of accelerating earnings growth. So I felt fairly sure that the stock would rebound. However, in the event that it did decline further, I would have bailed out just above my buy point. Never let a gainer turn into a loser. Also, selling after most of the gain was erased didn't seem to make sense. Better to risk a small further loss versus chance of recouping the losses of the last two days than taking the remnants of my profits. A bit off the point, but I would suggest, for those that don't already do this, when you buy a stock, save the chart, mark where you bought the stock on the chart, put it in a notebook, and again when you sell, get another copy of the chart and mark where you sell. I have learned quite a bit by doing this. ------------------------------------------------------------------------------- From: Michael A Langston Subject: re: [CANSLIM] the stock market Date: 18 Dec 1996 17:47:00 -0500 patrick wahl writes: > One stock I have that slowly but surely built up a 14 point > gain over a period of two months gave back 10 of those points > in two days. However, it had a 5 point rebound yesterday, and > another point and change today. let me guess: CPWR? if that's correct, you may be interested to know that the rebound was largely due to the pristine day trader, which issued a hot buy yesterday am -- careful, those folks tend to synchronize their stops, they can really kill one when they all try to get out the exit at the same time... mike ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] Commentary on 'M' Date: 18 Dec 1996 19:22:21 -0500 I've been lurking on this posting, as well as Craig's on the DOW 30 topping out, both to see how the mkt was going to weather this storm and also to try to get a feel for the O'Neill camp sense of things. You should all know by now that I have been bullish, well I still remain so. Of course, O'Neill's watch list is heavily weighed with techs, and I feel that is where mkt leadership lies, so how goes the techs goes the mkt, IMHO. Bottom line: best sense I can gather is that O'Neill is once again talking about this mkt as an "aging bull", he is warning of a correction/consolidation that COULD be as much as 15%, but he is not in a panic to get out, what he is saying is really what he has always preached, use this time to carefully examine your portfolio and get rid of the dogs. His reason, mkt action is volatile, shaky, AND there will always be something better than your dogs to buy. He also indicates that IF we go into a bear mkt, he expects it to be a brief one. I haven't heard any mention here of last week's book-to-bill report on the semis. Did nobody notice? Expectation was for 1.10 after a 1.10 report for Sept. Report was for 1.15 with Sept revised up to 1.11. Anything over 1 means orders are coming in (booking) faster than they are shipping (billing). And this is despite increased capacity leading to reduced prices and past inventory problems since this report is based on dollars, not units. Even the worldwide mkt was 1.09 I think, slightly slower than us but still expanding. I am encouraged also by the increased negative sentiment out there based on the way the mkt has been trading. Note also that INTC just got an earnings forecast increase, which helped it add a couple of points today. Overall the techs did well today, I noted COMS has gained about 7 pts or so since I mentioned it, and many others that recently sold off, supposedly on profit taking, have regained some of the lost ground. MY OPINION: While it looks pretty hopeless for me to see my forecast from awhile back of the mkt approaching 7000 this year, I still expect a good January and overall a good 1997. I am not convinced that this "aging bull" has reached the end of an already record setting duration. Stepping back briefly from the day-to-day trading, I continue to see an intact economy, low interest rates and stable, no serious signs of inflation, reasonably healthy xmas sales, increasing demand for chips, stable employment, improving earnings and increasing dividends on year-to-year basis, huge short position, and healthy to heavy volume days. It looks unlikely that any major index will set any more new records this year, but I remain comfortable (and fully invested) with this mkt. good luck tom w ---------- I've been meaning to post this since Friday, but this was my first opportunity. I've noticed that five month long trend lines on the Dow, S&P 500 and NASDAQ have all been broken in the last few days of last week. The S&P line was broken on Wednesday, the Dow on Thursday, and the NASDAQ on Friday. With today's 23 point drop in the NASDAQ, it is now back to where it was in the beginning of November. This seemed like a serious resistance level at the time since it took three tries to get the NASDAQ composite over 1260. From a chart perspective, if we drop below 1260, it looks like we could go all the way to 1200. The Dow looks like it could drop to 6060 and the S&P to 715. I'd guess that if we can rally off these levels then this could be a short term correction but if we break them, then it could be a long way down. Of course, take this with however many grains of salt you feel appropriate. I make no claims of being an expert or even correct. It just seems likely from my basic interpretation of the charts. -Linda ---------- ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] the stock market Date: 18 Dec 1996 19:34:51 -0500 IMHO, Patrick, you just demonstrated very well the difference between a trader and an investor. Yes, you held past the magical 8% or so stop loss level, but you had your factual reasons, and by not being shook out were able to enjoy that 5 pt and 1+ pt recovery. The key for you appears to have been noting why you bot it in the first place (historical earnings growth) and checking to be sure that the original fundamentals were still in place. Being willing to hold longer term also means enduring some of the mkt volatility, but you proved my past point that applying CANSLIM means using judgement. It's not an absolute rule, it's flexible not rigid, it's an aid in stock selection, not a total selector (if it was then we could just plug it into a computer and let a machine trade for us all the time). Your approach supports the several postings of using a rigid stop when you first buy a stock (to try and avoid a serious loss) but using looser (or no) stops once you have a profit. good job, and good luck tom w ---------- > From: Patrick Wahl > To: canslim@xmission.com > Subject: [CANSLIM] the stock market > Date: Tuesday, December 17, 1996 10:35 PM > > All I have to say about the last 3 days is - Ouch. A couple of my > stocks got clobbered. One stock I have that slowly but surely built up > a 14 point gain over a period of two months gave back 10 of those points > in two days. However, it had a 5 point rebound yesterday, and another > point and change today. > > Let me just toss out a thought or two on why I held the stock and see if > anyone finds it useful or disagrees with me - > > The selloff was on low volume and mirrored the market action. This > didn't seem to indicate a problem with the company, that is, a situation > where the market is going up, but the stock is going down. This was > just a stock that got caught in the general technology downdraft. > > As far as I knew, there was no news on the company itself that should > account for a 10 point drop (16% decline from where the high was, like I > said, ouch). I had to go back to my Daily Graph chart and look at the > numbers again, and remind myself of why I bought the stock. What I saw > were 4 quarters of accelerating earnings growth. So I felt fairly sure > that the stock would rebound. However, in the event that it did decline > further, I would have bailed out just above my buy point. Never let a > gainer turn into a loser. Also, selling after most of the gain was > erased didn't seem to make sense. Better to risk a small further loss > versus chance of recouping the losses of the last two days than taking > the remnants of my profits. > > A bit off the point, but I would suggest, for those that don't already > do this, when you buy a stock, save the chart, mark where you bought the > stock on the chart, put it in a notebook, and again when you sell, get > another copy of the chart and mark where you sell. I have learned quite > a bit by doing this. ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] Re: Trailing PE Date: 18 Dec 1996 19:48:20 -0500 In simplistic terms, the PE of a stock, whether measured in trailing or leading terms, is a measure of the popularity, or expectation, of a stock. I know few successful investors that equate PE of any kind with expected future growth rate, altho I am aware of some who try to compare PE and growth rate as a selection means in their stock picking "system". Personally I have found little if any correlation. You did not mention the earnings forecasts on COMS, which is essential to looking at any stock from a CANSLIM perspective, which is what I requested. Unfortunately, the stock has already moved about 7 pts from my base-bounce point of 71, and I still have not found the time to review. As to revenue growth, this must be looked at carefully. As a co grows rapidly, it becomes increasingly difficult, if not impossible, to maintain the same percentage rate because the comparison is being made to an ever larger prior year/qtr. You must look at actual rev, as well as profit mrgns since cost efficiency should be kicking in as the co grows. Going back to growth rate vs PE a moment, I suspect that if anyone uses this as a criteria, your list will mostly consist of cos growing 10 to 12% a year with lower PE figures. This will not produce many CANSLIM candidates. As to time horizon, while I will gladly review data for the past 5 years, I never buy a stock with any idea of what it will do for the next five. At best I am looking out maybe a year, and during that time will review the performance, qtr'y earnings, each 10Q and the 10K, chart, etc many times. If I continue to like what I see and read, I will hold or even add to the position. But my future expectation is subject to frequent and regular updates. good luck tom w ---------- > From: Haw-Jye Shyu > To: canslim@xmission.com > Subject: Re: [CANSLIM] Re: Trailing PE > Date: Wednesday, December 18, 1996 10:51 AM > > Oh, Yes! I forgot the sell figure. > > Their sell growth rate is > 1) 80% from 95 to 96 > 2) 57% from 94 to 95 > 3) 34% from 93 to 94 > 4) 51% from 92 to 93 > > If COMS can maintain the sell growth rat, better yet can improve it, the > shrinking profit margin may not cause too much of trouble. > > HJS > > ----- Begin Included Message ----- > > >From owner-canslim@xmission.com Wed Dec 18 10:42 EST 1996 > From: Haw-Jye Shyu > Date: Wed, 18 Dec 1996 10:00:50 -0500 (EST) > To: canslim@xmission.com > Subject: Re: [CANSLIM] Re: Trailing PE > > > Here is my thought on Three Com (COMS). They may not consist with CANSLIM: > 1. Currently at $ 72 3/8, 52 week high is $ 81 3/8. From the peak, COMS got a > 11% correction. (data from DBC) > > 2. Trailing P/E ratio is 60.31. (from DBC) Based on this number, the stock > owner is expecting an earning growth rate of 60% a year. (snipped the rest because I start disagreeing with your logic right here) ------------------------------------------------------------------------------- From: "tom worley" Subject: [CANSLIM] Bond mkt forecast Date: 18 Dec 1996 19:57:48 -0500 Just to add an opinion, and hopefully some controversy, to this group, thought I would make official what I said to one of the new owners of my firm last nite at our joint company xmas party (not a great one, but at least I sliced and diced the CEO at pool, may not have helped my chances for a bonus or pay raise, but sure as hell was fun and probably gained me some respect considering my condition!) INTEREST RATES/FOMC ACTION (1997): I expect no rate hikes for at least 3-6 months, and anticipate one or two rate cuts of 25 basis pts during all of 1997. yep, you read it right. Far as I know, I am the first, and probably the only one, to forecast a cut. Ballsy, I know, but so far I have read Greenspan real well, and this is OMHO. If you want to hear my reasoning, start posting and I will share if there is enough interest in being bored. P.S. guess what a surprise rate cut will do to the equity mkt????? tom w ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: Re: [CANSLIM] Bond mkt forecast Date: 19 Dec 1996 00:39:54 -0500 (EST) Uh, so I guess HJS was right reminding me about not doing enough work on my conference papers. Here I am in the middle of the night cracking formulas and fighting Word, Equation Editor and Canvas singlehandedly. I have five more days to finish these three papers before I board that plane for Macedonia. If I didn't play the big investor for the past few weeks I would've been done by now. Anyways...It's not that bad, especially considering the 25% more $$ I have now on my account. I just needed to spend some time with my canslim friends since I hardly see real-life ones recently. Reply to Tom follows. Tom wrote: > firm last nite at our joint company xmas party (not a great one, but at > least I sliced and diced the CEO at pool, may not have helped my chances > for a bonus or pay raise, but sure as hell was fun and probably gained me > some respect considering my condition!) Ah, you old fox, you! Still haven't forgotten the good ole trade of sucking up, have you? ;^) > INTEREST RATES/FOMC ACTION (1997): I expect no rate hikes for at least 3-6 > months, and anticipate one or two rate cuts of 25 basis pts during all of > 1997. > > yep, you read it right. Far as I know, I am the first, and probably the > only one, to forecast a cut. Ballsy, I know, but so far I have read > Greenspan real well, and this is OMHO. If you want to hear my reasoning, > start posting and I will share if there is enough interest in being bored. I am interested enough for everybody here, so even if noone else wants to read it ("delete" is just a button click away) know that there IS enough interest concentrated in me alone. > P.S. guess what a surprise rate cut will do to the equity mkt????? > > tom w Cheers, Zoran (the night hawk) ------------------------------------------------------------------------------- From: patrick.wahl@unpcbbs.cts.com (Patrick Wahl) Subject: [CANSLIM] miscellaneous stuff Date: 18 Dec 1996 12:39:00 GMT Don't have current information on several of these stocks, but they seem to be forming constructive charts patterns and are worth watching - Amresco (AMMB) Financial services company, kind of bouncing around in at 23 or so. PE in line with or a bit below growth rate. Periphonics (PERI) I fell asleep on this one and missed the breakout, but watch the stock for further buying opportunities. Davox (DAVX) Good base, had a sell off a few weeks ago and came back to near the old high. I believe I saw a few people talking about Iomega last week. I'm quite familiar with the stock, saw the rather speculative interest in it last spring and the whole blowoff top. Once a stock has gone through that process, I think usually it is going to be dead in the water for a long time and probably is a good one to forget about. Presstek is another that went through the same process. Better to move on to finding the next Iomega than to wait for it to recover. Market stuff - I am a terrible market forecaster, so I won't try and forecast where the thing is headed, but I do know what could throw a monkey wrench in the works, and that is if interest rates continue to trend down. 30 year bonds reached a low in yield of 6.35% about 2 weeks ago, since then have risen to a yield of 6.65%. Some people feel that there may be some wage pressures in the works. This is probably the single biggest contributor to inflation, if it occurs. The way to know is to watch the monthly Unemployment report, released on the first Friday of the month (except on rare occasions, apparently at the whim of the govt.), and from there see how bonds react. LAst March or so a bad report caused a 220 point intraday drop in the Dow, so the report is closely watched on Wall Street. The report comes out at 8:30 am EST (5:30 am for us poor slobs on the west coast), so if it is bad, the market heads straight south from the open. Anyway, just something to keep in mind. ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: [CANSLIM] 99 >= EPS > 95 list Date: 19 Dec 1996 02:49:57 -0500 (EST) I was just wondering... Is there an easy way to get a list of stocks with EPS>95 ranked starting from 99 down to 95? The range is 5% so on a total of 6000-8000 stocks, that would make the list 300-400 stocks long. Or should I just waste my eyes going through IBD? Cheers, Zoran ------------------------------------------------------------------------------- From: "Dean Edwards" Subject: [CANSLIM] Stock Market and Stock Pick Date: 19 Dec 1996 22:59:35 +1300 Just my opinion on the market. I am very bullish on the US market. It is suppose to be the second longest US bull market this century. I can't predict the future nor can anyone else for that matter. The main thing that I am watching is an interest rate hike in the US, which would certainly put a damper on things. Already Mr Greenspan has caused a knee-jerk reaction with his comments on the "exuberance in the market". And then there is factor X which comes out of no where and knocks down the market. For example an Iraq invasion of Kuwait in 1990 which caused a bear market and then the start of a new bull with a 30% gain in the S&P 500 average, a 25% gain in the DOW, and a 60% gain in smaller stocks, which made 1991 the best year in two decades. I hate to make predictions because so many fail. Sorry I am not gonna quote figures and years as this is all from memory. In my opinion the best theory as to why the market should continue to soar is because of the ageing population in the US. I work for Statistics New Zealand and the evidence I have seen suggests that ageing population in the US will continue to have an enormous impact on the United States markets if not the world. Mexico is one example of the clout that US pension funds have, to move a market/country. It is the sheer weight of US money that has to find a home. I saw another example of this, when a report indicated that US pension funds were bullish on the Asian markets. It dawned on me that what happened to Mexico, would surely happen in the Asian sector as well. The Asia markets plunged the following year, as interest rates rose in the United States and US pension funds decreased their "sector weighting" in Asia. In New Zealand our own fund managers blame the increasing volatilty on "overseas investor's" who can literally push our market up and down like a yo-yo at will. The total market capitalisation of the NZ stock market is less than $US 30 billion. US investor's own a large majority of biggest NZ public companies. The US stock market has the power to influence the NZ share market because of that reason. Here is my number one pick for the year. I use CANSLIM to find my stocks of course! But I have some more stringent criteria. I try to find companies with a market capitalisation of US500 million or less, which is the same as small number of shares outstanding. The IPO must be less than 4 years, more like 2-3 years. When I invest in a stock, I am expecting a 100% return on my investment. Why should I take the risk/reward of a small percentage gain. I have been investing for the last 16 years and 5 of them in the US market. It is hard to explain but I'll try another tack. In the currency market you don't risk your money unless the reward ratio is 3/1. It forces you to think harder about your stock selections. If you don't see a big enough reward for the risk you are taking, you will not gamble/invest in the stock. Finally I research the company to death and have confidence in my stock selection. Quoting William O'neil, "If you really know a company and its products well, you will have the additional confidence required to sit tight though several inevitable normal corrections. Achieving giant profits in a stock usually takes one to three years time and patience." The company is Network Appliance which hit the IBD volume list today, with a breakout to a new high. I already own the stock my purchase price was at $28.5 EPS RnkRel. Str.Acc. Dis. 52-Wk High 52-Wk Low 75 92 A $41.75 $20 Stock Symbol Closing Price PriceChange PE Ratio NTAP 44 1/4 +4 1/4 67 10 498 160 Float (mil) Vol. (1000s) % Chng in Vol. 10 498 160 I actually prefer an investor's reasons. Here is some of the reasons why I selected NTAP What does the company do? L = Leader of its industry. Network Appliance supplies high performance network data access devices that provide fast, simple, reliable and cost-effective file service for net-work-attached storage environments. They have the fastest "proprietary" servers around and compete in a niche market. The major trend - large companies are downsizing from mainframes to servers which carter to their staff (the pc) at the desk-top environment. N = New products. NTAP is out of the starting gate and is the "first company" to introduce new products that will be compatible with Microsoft's killer NT product software. Large companies will be slow to move. They don't want Microsoft at all, on their playing field. So they are not going to manufacture a server that is compatible with Microsoft software for the moment. Bill Gates reckons he will make at least US1 billion dollars from NT. Don Valentine is the venture capitalist who took Network Appliance public. The IPO was in November 1995. A major force/guru in taking high-techs public. His other sucess stories include Cisco Systems, C-Cube, Oracle, Micro-chip Technology. He is on the board of Directors for NTAP as well as some of those previous companies I just mentioned. There EPS are excellent. This is the web-site. http://weaver-gw.netapp.com/news/index.html Good luck in your investing. Regards Dean ------------------------------------------------------------------------------- From: Michael A Langston Subject: re: [CANSLIM] 99 >= EPS > 95 list Date: 19 Dec 1996 10:13:33 -0500 > I was just wondering... > Is there an easy way to get a list of stocks with EPS>95 > ranked starting from 99 down to 95? > The range is 5% so on a total of 6000-8000 stocks, that > would make the list 300-400 stocks long. > Or should I just waste my eyes going through IBD? zoran -- my man -- how many times must we say "daily graphs?" :) DG has a page for the top 100 R stox, and one for the top 100 E stox -- that's probably plenty to get you started... mike ------------------------------------------------------------------------------- From: connor@adrs1.dseg.ti.com (Martin Connor 575-6279) Subject: Re: [CANSLIM] Stock Market and Stock Pick Date: 19 Dec 1996 09:58:19 CST > "Dean Edwards" wrote... > > In the currency market you don't risk your money > unless the reward ratio is 3/1. > As the consumate lurker, I reluctantly emerge from mailbox, so here goes my first CANSLIM post: How does CANSLIM deal with the concept of "reward ratio"? Presumably if you are doing CANSLIM, you are minimizing risk, and maximizing reward. Soooo... can CANSLIM be rolled up into a single number (perhaps a reward ratio) so that you could rank equities accordingly? Regards and Best Wishes for the Holidays, Martin Connor bio: Like to trade stocks on cycles. Read O'Neal's book this year, need to read again, and again... Use Metastock 5.11 for data gathering and analysis. Love Tech stocks. Love Volatility. Love Bull markets. My most consistent and reliable trading system: "Buy High, Sell Low, and Take the Write-Off." ------------------------------------------------------------------------------- From: Craig Griffin Subject: Re: [CANSLIM] 99 >= EPS > 95 list Date: 19 Dec 1996 16:10:03 GMT Zoran, Don't know of any easy way to get list of EPS>95. But you can get list of 100 "fastest growing stocks" form DG (changes weekly) based on 5 yr eps growth rate. At 02:49 AM 12/19/96 -0500, you wrote: > >I was just wondering... >Is there an easy way to get a list of stocks with EPS>95 >ranked starting from 99 down to 95? >The range is 5% so on a total of 6000-8000 stocks, that >would make the list 300-400 stocks long. > >Or should I just waste my eyes going through IBD? > >Cheers, >Zoran > > ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: Re: [CANSLIM] 99 >= EPS > 95 list Date: 19 Dec 1996 14:38:50 -0500 (EST) OK, Craig, can you give me the types of subscription for DG with their respective costs? Thanks, Zoran ------------------------------------------------------------------------------- From: Johan Van Houtven Subject: Re: [CANSLIM] Re: BTGC Date: 19 Dec 1996 22:11:38 +0100 BTGC now at bid 11 7/8 ask 12. I menionted it at 10 5/8. About 12% higher now. Too bad I sold early. APCC broke out to an all time high today. Closed at bid 27 6/8 ask 28. I mentioned it at around 24 -25 if I remember correctly. Bought SEMX at 13 5/8. eps 99 rs 91 acc/dis B group strenght A ,last quater eps inc. +62%, anaula eps growth +100%. Based on dec 97 eps it should go to $ 20 by then. At 06:39 PM 12/12/96 -0500,Tom wrote: >I followed BTGC some years ago for a client. After a full due diligence on >it (she was long the stock), I told her to sell it. She didn't, I was >right. Because of this I had to keep an eye on it for a number of years >after, and never saw a reason to own it. One factor was that they kept >losing money, and kept selling newly issued shares to compensate. I don't >recall seeing a company their size burn thru so much dough. I haven't >admittedly looked at it in several years, do recall there was some changing >in mngmt forced by some of the outside investors tired of the losses. For >me they were a co that always failed to deliver on promises of future >prospects/products. Hope for you they have changed their pattern. ------------------------------------------------------------------------------- From: Johan Van Houtven Subject: Re: [CANSLIM] 99 >= EPS > 95 list Date: 19 Dec 1996 22:12:43 +0100 And were can I order DG? Will they send it to Belgium, Europe? At 02:38 PM 12/19/96 -0500, you wrote: > >OK, Craig, can you give me the types of subscription for DG >with their respective costs? > >Thanks, >Zoran > > ------------------------------------------------------------------------------- From: Craig Griffin Subject: Re: [CANSLIM] 99 >= EPS > 95 list Date: 19 Dec 1996 21:47:44 GMT DG Subscription info per Zoran's request: Nasdaq/American Edition Weekly (52 issues) $363 + $156 postage Biweekly (26 issues) $297 + $78 postage Monthly (12 issues) $195 + $36 postage New York Edition same prices as above Both Editions Double subscription rates above, but pay for postage only one time. Many larger cities have home delivery included in the postage costs above. It arrives on Saturday night around midnight here in Raleigh. 1-800-472-7479 = DG toll free order line Hope this helps. At 02:38 PM 12/19/96 -0500, you wrote: > >OK, Craig, can you give me the types of subscription for DG >with their respective costs? > >Thanks, >Zoran > ------------------------------------------------------------------------------- From: Jeff Beckham Subject: Re: [CANSLIM] 99 >= EPS > 95 list Date: 19 Dec 1996 14:50:13 -0700 At 02:38 PM 12/19/96 -0500, you wrote: > >OK, Craig, can you give me the types of subscription for DG >with their respective costs? New York Stock Exchange Edition: subscription postage & handling weekly $363 $156 bi-weekly $297 $ 78 monthly $195 $ 36 5 week trial $ 14 $ 15 NASDAQ/American Edition subscription postage & handling weekly $363 $156 bi-weekly $297 $ 78 monthly $195 $ 36 5 week trial $ 14 $ 15 Both editions subscription postage & handling weekly $723 $156 bi-weekly $591 $ 78 monthly $390 $ 36 5 week trial $ 28 $ 15 To order call 1-800-819-8200 I would suggest you try out the 5 week trial to start with. You could possibly even talk to your local library obout getting an annual subscription. I know ours subscribes to Value Line, Standard & Poors, and several other good financial references. Jeff Beckham ------------------------------------------------------------------------------- From: Craig Griffin Subject: [CANSLIM] Dow Top? - Apparently Not - But Jury's Still Out Date: 19 Dec 1996 22:24:31 GMT Sorry folks. Based on the last three day's action it looks like I may have been wrong about a Dow Top a week or so ago. I'd like to go back over my reading of the Dow chart and include the recent action to see where/if I went wrong, but no time now. Still not sure about this market and I am still personally not buying breakouts... but the signs seem good for a continuation of the bull. I warned that it was the first time I had tried to call a top, and looks like I made a mistake. Bottom line is that I am still taking a "wait and see" attitude to buying new breakouts, but the market looks like it is having a mighty strong bounce. I would have waited another day or two or more to make this post so I could do some more analysis and have some more data. But my wife and I are heading to Orlando for Christmas with her family in a couple of days and things are chaotic around here. I probably will not get much chance to watch the market or read e-mail for a week or so. Best to all, Craig ------------------------------------------------------------------------------- From: Craig Griffin Subject: Re: [CANSLIM] 99 >= EPS > 95 list Date: 19 Dec 1996 22:24:29 GMT It seems logical that the "postage cost" in the subscription rates I gave in the response to Zoran would be higher to Europe, but I don't see why they would not send it there. By the way, I probably left out the cost of the most important subscription of all (sorry Zoran), that is the trial. The trial subscription runs 5 weeks and costs $14 for either edition (NY or OTC) and $15 for postage, or get both editions on trial for $28 and $15 for postage. The trials are a very good deal. By the way, when I go on vacation, or just get too swamped with other things, I will frequently put my subscription on hold. They then simply pickup with however many issues were left when you ask that they start it back up. At 10:12 PM 12/19/96 +0100, you wrote: >And were can I order DG? Will they send it to Belgium, Europe? > >At 02:38 PM 12/19/96 -0500, you wrote: >> >>OK, Craig, can you give me the types of subscription for DG >>with their respective costs? >> >>Thanks, >>Zoran >> >> > > ------------------------------------------------------------------------------- From: joani@mindspring.com (Joan Sherman) Subject: Re: [CANSLIM] 99 >= EPS > 95 list Date: 19 Dec 1996 20:46:22 -0400 >Zoran, Don't know of any easy way to get list of EPS>95. But you can get >list of 100 "fastest growing stocks" form DG (changes weekly) based on 5 yr >eps growth rate. > >At 02:49 AM 12/19/96 -0500, you wrote: >> >>I was just wondering... >>Is there an easy way to get a list of stocks with EPS>95 >>ranked starting from 99 down to 95? >>The range is 5% so on a total of 6000-8000 stocks, that >>would make the list 300-400 stocks long. >> >>Or should I just waste my eyes going through IBD? >> >>Cheers, >>Zoran >> >> What is DG? Joan ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] Re: BTGC Date: 19 Dec 1996 21:28:48 -0500 Johan, too bad you sold BTGC too early, hope I didn't influence that decision. From another group I am in, I picked up some comments on the biotech group that may lead some of us to reexamine this group. Apparently, the group is only up about 2% for the year, but is currently showing great strength. A day or so ago it was featured in IBD as the 4th best group for the day, beat out only by three tech groups. There was one buyout just announced at about 30% premium to the mkt, suggesting that the group may be seriously undervalued. Several others showed multi-pt moves (up to 5 pts) apparently in sympathy. Wonder if there are some members of this group with well established bases starting to break out??? Hmmmmm! As I have mentioned before, I hate this group, but sure do like making a profit! Maybe time to hit the books?? tom w ---------- > From: Johan Van Houtven > To: canslim@xmission.com > Subject: Re: [CANSLIM] Re: BTGC > Date: Thursday, December 19, 1996 4:11 PM > > BTGC now at bid 11 7/8 ask 12. I menionted it at 10 5/8. About 12% higher now. > > Too bad I sold early. > > >I followed BTGC some years ago for a client. After a full due diligence on > >it (she was long the stock), I told her to sell it. She didn't, I was > >right. Because of this I had to keep an eye on it for a number of years > >after, and never saw a reason to own it. ------------------------------------------------------------------------------- From: "tom worley" Subject: [CANSLIM] Daily Graphs (DG) Date: 19 Dec 1996 21:22:32 -0500 Judging by all the responses to Zoran's question about stocks with high EPS, there clearly are many in this group who are familiar with DGs value and content. For those members of this group who are serious about trying the CANSLIM method and want to learn, you owe it to yourself to at least give the trial offer a trial. I would like to suggest when you call or write IBD, ask them when/if/why this data is not available online for a fee. If enough ask, maybe they will start offering it in addition to/instead of mailed service. Could save the mailing fee and get the data faster. Also express an interest in being able to get a five year chart. It apparently is not longer offered except to institutional clients, but personnally I find it far superior to identifying various patterns, esp cup and handle (strongest formation of all) as well as spotting support and resistance points. no, I get no compensation from O'Neill, just find his database very useful and would like to see it more available. tom w ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] Dow Top? - Apparently Not - But Jury's Still Out Date: 19 Dec 1996 21:14:14 -0500 Thanks for the post, Craig, and the honesty. I was going to write you anyway tonite to ask you to review your data in light of past several days to see if any of your upward limits were being violated, and what that might suggest. Still interested in your feedback when you have a chance to go over it. Have a safe trip to Orlando, but take a coat. Cold front just hit Miami this afternoon, and it is already DOWN TO 53 AND FALLING. They even had some SNOW in the Panhandle last nite. Damn, I may have to move further south, that white stuff (not coke, it's already here) is getting too close. With the strong winds accompanying this frontal system, it must have a chill factor down into the low forties!!! No question today was a strong performance day, however I am still concerned by the mixed performance by the techs, and the lack of a justifiable reason for the action. Yes, trade deficit nrs came in well ahead of expectation despite a strong dollar, however jobless claims was 1000 below expectation and was still cited as part of the cause. Maybe it was simply prior overselling and the big money managers saw opportunity, but I think more likely cause was money managers want to go on holiday and got to be invested by end of qtr plus typical triple witching behaviour. Maybe I should hang onto my hopes for a test of 7000 by year's end???? Will review my info later and try to post a more comprehensive "mkt comment" for all to go to sleep by. good luck tom w ---------- > From: Craig Griffin > To: canslim@xmission.com > Subject: [CANSLIM] Dow Top? - Apparently Not - But Jury's Still Out > Date: Thursday, December 19, 1996 5:24 PM > > Sorry folks. Based on the last three day's action it looks like I may have > been wrong about a Dow Top a week or so ago. I'd like to go back over my > reading of the Dow chart and include the recent action to see where/if I > went wrong, but no time now. Still not sure about this market and I am > still personally not buying breakouts... but the signs seem good for a > continuation of the bull. I warned that it was the first time I had tried > to call a top, and looks like I made a mistake. > > Bottom line is that I am still taking a "wait and see" attitude to buying > new breakouts, but the market looks like it is having a mighty strong bounce. > > I would have waited another day or two or more to make this post so I could > do some more analysis and have some more data. But my wife and I are > heading to Orlando for Christmas with her family in a couple of days and > things are chaotic around here. I probably will not get much chance to > watch the market or read e-mail for a week or so. > > Best to all, > Craig ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: Re: [CANSLIM] 99 >= EPS > 95 list Date: 19 Dec 1996 22:09:59 -0500 (EST) Joan asked: > What is DG? Joan Daily Graphs. A service with charts and other canslim related info on stocks. Zoran ------------------------------------------------------------------------------- From: "Dean Edwards" Subject: Fw: [CANSLIM] Stock Market and Stock Pick Date: 20 Dec 1996 18:13:52 +1300 What do I mean when I said "Reward / Risk" ratio? The risk is that you always cut your losses at 7-8% no hesitation, no questions, no doubts you just get out! What is my reward? I do not buy a stock unless I think I can double my money. That is my goal or aim. Trying to double your money makes you focus on stock selection and forces you to find the very best stock. In a currency trade you don't risk your money unless its a killer trade. The same thing with a stock basically. CANSLIM helps you identify the strongest and best growth stocks in the stock market. It also tells you when to cut your losses. If the purchase price drops below 7-8%. However I have never been satisfy with 'M' market conditions. If there was a correction in the market tomorrow, I am not going to sell any of my stocks. For starters there are too many false signals in the stock market. A correction in the market doesn't happen in 1 day nor 1 week. When you have a major break in the market the trend still takes a long time to be defined upward or downward and of course there are always rallies in the market. Back to my Reward / Risk ratio. Some of my companies have made returns that are over a 100%. I let the company tell me when to sell my investment. For example a drop in profits, decrease in sales, or market share, profit margins etc. I have found outstanding companies using CANSLIM in the past, only to see large profits evaporate. For example in March 1994 there was a US interest rate hike. A market correction lasting 9-10 months. I bought Cisco Systems and Wellfleet Communications (now called Bay Networks) just before the correction. Nothing wrong with the companies except market conditions. I sold both companies for a small capital gain. Subsequently Cisco soared over 300% and Bay over 100%. For 3 years my stock return performance was abysmal. I had to study my mistakes to find out what I was doing wrong. I then made an important discovery that has helped me improved my stock return performance. I absolutely refuse to sell any stock unless company conditions change for the worse or it drops below my 7-8% purchase price . I am currently holding Fore Systems in my portfolio for a capital gain of 111%. I have taken the initial risk at the beginning (if my purchase price dropped below 7-8% I would have been forced to sell) and now I expect it to double to 200% (my large reward). That is what I meant when I referred to Reward/Risk ratio. My goal was to make a 100% return for taking the risk in the first place. Goal Setting False market conditions would have normally shaken me out of a stock like Fore Systems a long time ago. And then what would I have to show for it? A small capital gain. Cut your losses and let your profits ride based on "company" and not market conditions. If you already have a healthy gain on your stock investment, then you don't have to worry about market conditions. I tend to focus on company conditions and my goal is to aim for a 100% return on my investment. If I didn't set that goal, I would probably lose interest in the stock get bored and sell it. Again there would be nothing wrong with the company but market conditions would spook me enough to sell it or the stock price was sitting there doing nothing. My other weakness is always wanting something to happen. Patience is a virtue in the stock market.. Merry XMAS to all and happy New Year. By the way there is suppose to be 200 people in this CANSLIM group. How about everyone comes forward with there one favourite stock selection for next year. I will be very happy to have 200 CANSLIM stocks to choose from as a Christmas present :-) Regards Dean ---------- > From: Martin Connor 575-6279 > To: canslim@xmission.com > Subject: Re: [CANSLIM] Stock Market and Stock Pick > Date: Friday, December 20, 1996 4:58 AM > > > > "Dean Edwards" wrote... > > > > In the currency market you don't risk your money > > unless the reward ratio is 3/1. > > > > As the consumate lurker, I reluctantly emerge from mailbox, > so here goes my first CANSLIM post: > > How does CANSLIM deal with the concept of "reward ratio"? > Presumably if you are doing CANSLIM, you are minimizing risk, > and maximizing reward. Soooo... can CANSLIM be rolled up into > a single number (perhaps a reward ratio) so that you could rank > equities accordingly? > > > Regards and Best Wishes for the Holidays, > > Martin Connor > > > > bio: Like to trade stocks on cycles. > Read O'Neal's book this year, need to read again, and again... > Use Metastock 5.11 for data gathering and analysis. > Love Tech stocks. > Love Volatility. > Love Bull markets. > My most consistent and reliable trading system: > "Buy High, Sell Low, and Take the Write-Off." > > ------------------------------------------------------------------------------- From: rcstein@airmail.net (Richard S) Subject: Re: [CANSLIM] 99 >= EPS > 95 list Date: 20 Dec 1996 05:54:01 GMT Is Daily Graphs an IBD product. I take it and read it every day and have not seen any ads for the Daily Graphs. The other day I got IBD back out of the trash, and read it again looking for an ad, and still couldn't find them. =20 Where is the information concerning DG listed? On Thu, 19 Dec 1996 10:13:33 -0500, you wrote: :: > I was just wondering... :: > Is there an easy way to get a list of stocks with EPS>95 :: > ranked starting from 99 down to 95? :: > The range is 5% so on a total of 6000-8000 stocks, that=20 :: > would make the list 300-400 stocks long.=20 :: > Or should I just waste my eyes going through IBD? ::=20 << Richard S. >> ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: [CANSLIM] NSMI? Date: 20 Dec 1996 00:06:48 -0500 (EST) Tom wrote: > that tempting profit. By this method, he is able to substantially > outperform the S&P with his NSMI stocks (in Aug he was up over 700% > compared to S&P up 119%). Tom, what's NMSI, and what was the timeframe for those 700%. Zoran ------------------------------------------------------------------------------- From: Johan Van Houtven Subject: Re: [CANSLIM] Re: BTGC Date: 20 Dec 1996 12:34:06 +0100 Tom, I divide biotech in two classes. Those without and those with earnings. AFAIK BTGC has earnings. And based on estimated future sales it should fetch $40 by 2001. Other biotechs that I think will do fine the next few weeks: LGND, AGPH. Both do not have earnings, but really good technology IMHO of course. Forget about studying biotechs, it is so difficult that even with my biotech degree I have a hard time understanding the small details (that count the most). And you never know what is really going on. It is the researchers who right the reports and I know how these can be manipulated. At 09:28 PM 12/19/96 -0500, you wrote: >Johan, too bad you sold BTGC too early, hope I didn't influence that >decision. From another group I am in, I picked up some comments on the >biotech group that may lead some of us to reexamine this group. Apparently, >the group is only up about 2% for the year, but is currently showing great >strength. A day or so ago it was featured in IBD as the 4th best group for >the day, beat out only by three tech groups. There was one buyout just >announced at about 30% premium to the mkt, suggesting that the group may be >seriously undervalued. Several others showed multi-pt moves (up to 5 pts) >apparently in sympathy. Wonder if there are some members of this group >with well established bases starting to break out??? Hmmmmm! As I have >mentioned before, I hate this group, but sure do like making a profit! >Maybe time to hit the books?? >tom w >---------- >> From: Johan Van Houtven >> To: canslim@xmission.com >> Subject: Re: [CANSLIM] Re: BTGC >> Date: Thursday, December 19, 1996 4:11 PM >> >> BTGC now at bid 11 7/8 ask 12. I menionted it at 10 5/8. About 12% >higher now. >> >> Too bad I sold early. >> >> >I followed BTGC some years ago for a client. After a full due diligence >on >> >it (she was long the stock), I told her to sell it. She didn't, I was >> >right. Because of this I had to keep an eye on it for a number of years >> >after, and never saw a reason to own it. > > ------------------------------------------------------------------------------- From: "tom worley" Subject: [CANSLIM] DG, NSMI Date: 20 Dec 1996 06:47:34 -0500 Yes, DG is an O'Neill/IBD product, it is the heart and soul of CANSLIM. Don't know about where it is advertised in IBD, I have seen ads for it there before however. The OTC edition has about 900 (sometimes more) stocks plus about 100 AMEX. The NYSE edition has about 1600 stocks. Both have respective lists of the top 100 EPS, 100 RS, top groups, plus charts of some indexes. Take the 4 week trial and check it out, it's worth it (800-472-7479 or 310-448-6843 in Los Angeles). NSMI stands for New Stock Market Ideas and is now an institutional product. At one time it was also available at great cost (about $80,000/yr) at the retail level but O'Neill did not like the exposure to arbitration, so cut out all retail firms. The 700% I mentioned was from the 1990 market low to about August 96 and was 740% gain for NSMI compared to 119% for S&P index. As far as I am aware, IBD will not sell this to individuals, but never hurts to ask. tom w ------------------------------------------------------------------------------- From: Haw-Jye Shyu Subject: Re: Fw: [CANSLIM] Stock Market and Stock Pick Date: 20 Dec 1996 10:12:09 -0500 (EST) Dear Dean: I like your approach. It makes sense to me, especially try to make over 100% gain. But honest with you, whenever I buy the stock, I always strongly believe that this time I'll make a big profit out of the stock (a gamler psychological behavior). But, For the past year, I always 1) do bottom fishing: KM (buy at 8 sold at 12) , a 50% gain in 4 month LSI (buy at 22 still hodl on it), 30% gain so far CSCO buy at 60 sold at 68, a 13% gain in 1 one month VJET (buy at 11 sold at 7 1/4) , 34% lost 2) following suggestion from panelist of the Louis Ruskier TV program: BLY (buy at 16 sold at 22), 37% gain in 4 month BSPT (buy at 9 7/8 and sold at 6 1/4), 37% lost IQ (mergered to CU) (equilent to buy at 23.5 sold at 22 and 1/8, this time I stick to the 8% stop) and now it back to 24. 8% lost After a whole year of reading, following and trading (total 14 trades). I discovered that I learned a lot but made very little money not to mention when the tax hit me and the profit eaten by commision. Where did I go wrong? Am I a trader or an investor? HJS ----- Begin Included Message ----- From owner-canslim@xmission.com Fri Dec 20 01:06 EST 1996 X-MSMail-Priority: Normal X-Priority: 3 MIME-Version: 1.0 Content-Transfer-Encoding: 7bit What do I mean when I said "Reward / Risk" ratio? The risk is that you always cut your losses at 7-8% no hesitation, no questions, no doubts you just get out! What is my reward? I do not buy a stock unless I think I can double my money. That is my goal or aim. Trying to double your money makes you focus on stock selection and forces you to find the very best stock. In a currency trade you don't risk your money unless its a killer trade. The same thing with a stock basically. CANSLIM helps you identify the strongest and best growth stocks in the stock market. It also tells you when to cut your losses. If the purchase price drops below 7-8%. However I have never been satisfy with 'M' market conditions. If there was a correction in the market tomorrow, I am not going to sell any of my stocks. For starters there are too many false signals in the stock market. A correction in the market doesn't happen in 1 day nor 1 week. When you have a major break in the market the trend still takes a long time to be defined upward or downward and of course there are always rallies in the market. Back to my Reward / Risk ratio. Some of my companies have made returns that are over a 100%. I let the company tell me when to sell my investment. For example a drop in profits, decrease in sales, or market share, profit margins etc. I have found outstanding companies using CANSLIM in the past, only to see large profits evaporate. For example in March 1994 there was a US interest rate hike. A market correction lasting 9-10 months. I bought Cisco Systems and Wellfleet Communications (now called Bay Networks) just before the correction. Nothing wrong with the companies except market conditions. I sold both companies for a small capital gain. Subsequently Cisco soared over 300% and Bay over 100%. For 3 years my stock return performance was abysmal. I had to study my mistakes to find out what I was doing wrong. I then made an important discovery that has helped me improved my stock return performance. I absolutely refuse to sell any stock unless company conditions change for the worse or it drops below my 7-8% purchase price . I am currently holding Fore Systems in my portfolio for a capital gain of 111%. I have taken the initial risk at the beginning (if my purchase price dropped below 7-8% I would have been forced to sell) and now I expect it to double to 200% (my large reward). That is what I meant when I referred to Reward/Risk ratio. My goal was to make a 100% return for taking the risk in the first place. Goal Setting False market conditions would have normally shaken me out of a stock like Fore Systems a long time ago. And then what would I have to show for it? A small capital gain. Cut your losses and let your profits ride based on "company" and not market conditions. If you already have a healthy gain on your stock investment, then you don't have to worry about market conditions. I tend to focus on company conditions and my goal is to aim for a 100% return on my investment. If I didn't set that goal, I would probably lose interest in the stock get bored and sell it. Again there would be nothing wrong with the company but market conditions would spook me enough to sell it or the stock price was sitting there doing nothing. My other weakness is always wanting something to happen. Patience is a virtue in the stock market.. Merry XMAS to all and happy New Year. By the way there is suppose to be 200 people in this CANSLIM group. How about everyone comes forward with there one favourite stock selection for next year. I will be very happy to have 200 CANSLIM stocks to choose from as a Christmas present :-) Regards Dean ---------- ------------------------------------------------------------------------------- From: jeff@scrooge.idec.sdl.usu.edu (Jeff Salisbury) Subject: [CANSLIM] (Fwd) Is the 8-10% rule realistic ? Date: 20 Dec 1996 15:00:52 -0600 Everyone, This message was inadvertantly sent to me at canslim-owner. I am forwarding it to the group... Jeff Salisbury --- Forwarded mail from MMLEUN@ccmail.monsanto.com To all, I don't think the rule of cutting loss at 8-10% is realistic at all. With the recent market volatility, even Coca - cola have a 10 % adjustment within this week! Do I misunderstood O'Neil's rule ? Please help on how this should be done! Thanks! Have a Merry X'mas! My favorite stocks for 1997 are : csco, coms and cs! Martina ---End of forwarded mail from MMLEUN@ccmail.monsanto.com ------------------------------------------------------------------------------- From: patrick.wahl@unpcbbs.cts.com (Patrick Wahl) Subject: Re: [CANSLIM] 99 >= EPS > Date: 20 Dec 1996 05:29:00 GMT JO>What is DG? Joan If you want to see what information you get with the Daily Graphs, each page of DG contains four charts like the middle chart printed in the stocks in the news feature in the IBD (the one with one year of data and earnings and sales for 4 quarters along the bottom). ------------------------------------------------------------------------------- From: joani@mindspring.com (Joan Sherman) Subject: [CANSLIM] Wall Street Journal article Date: 20 Dec 1996 23:44:57 -0400 I have a question that I would appreciate if someone could explain for me According to the article (pgc2) Abreast of the Market - last paragraph: Michael Schwartz, chief options strategist at Oppenheimer, said exuberant buying at one point drove the March futures contract on the S & P 500 to a large premium over fair value, in part because sellers of the future were scarce due to the approaching year-end and holiday season. Arbitragers bought the cash stocks aggressively and sold the futures. Firstly, explain this for me, please, secondly, what impact will this have at the next options expiration? Thanks, Joan Sherman ------------------------------------------------------------------------------- From: Dan Sutton Subject: [CANSLIM] List of HI-EPS, HI-ERG stocks from TELESCAN Date: 20 Dec 1996 23:56:26 -0500 (EST) Here is a list of stocks with High EPS, High ERG and High Group Rank from a search I use in TELESCAN. The search was done after todays market close.TELESCAN criteria seldom match IBD numbers exactly, but they should be very close. Symbol Grp Price EPSRk ERG GrpRk TMAR OWD 46 89 99 97 UTI OWD 36 90 99 97 SIPX ESE 33 93 99 99 HMAR OWD 22 95 99 97 MDCO OWD 19 80 99 97 SBSE EEE 36 97 99 86 MLR ATT 30 95 99 96 CLDR OWD 61 92 99 97 QLGC DCO 23 93 99 98 INVX DCO 55 81 99 98 MOIL OCP 20 95 99 90 FGAS OIL 37 86 99 95 PETD OCP 4.8 98 99 90 ACTM EEE 30 95 98 86 FLC OWD 40 85 99 97 DELL DCS 54 98 99 95 CAM OWD 45 94 99 97 COLL ATT 5.9 92 99 96 AALR DCS 13 99 99 95 VTSS ESE 41 99 99 99 ESV OWD 49 98 99 97 ULTK EEE 26 97 98 86 LCRY EEE 36 97 98 86 CTN DPE 45 98 97 73 CKH OWD 64 97 99 97 GLM OWD 20 91 99 97 INTC ESE 134 89 99 99 RDC OWD 24 90 99 97 ENCD DPE 40 95 97 73 NE OWD 20 87 99 97 RSYS DSO 49 99 97 71 GLBL OWD 19 91 99 97 CHML MAN 39 93 97 82 IOM DPE 18 96 97 73 BBOX EEE 40 89 98 86 ETRC DCS 12 86 99 95 PRDE OWD 20 89 99 97 CLFY DSO 44 97 96 71 CMSX DSO 22 98 96 71 GROV BSB 49 85 98 93 STM ESE 68 96 99 99 GEN EEE 20 94 98 86 CIBR DCS 31 97 99 95 SII OWD 45 92 99 97 SYSF DSO 15 97 96 71 EVI OWD 50 97 99 97 CHK OCP 54 98 99 90 TOS ORE 75 81 99 98 ESST ESE 28 82 99 99 SFY OCP 28 92 98 90 WDC DPE 56 90 96 73 ETEC DSO 35 99 96 71 UMC OCP 48 80 97 90 UNT OCP 8.6 86 98 90 MARY OCP 25 87 98 90 VSVR DCS 49 99 99 95 ATMI ESE 17 89 99 99 OPAL ESE 18 89 99 99 STBI DCS 21 92 99 95 VRC OWD 22 85 99 97 RMDY DSO 50 99 96 71 SCOP DSO 42 99 96 71 GATE DCS 57 94 99 95 JDAS DSO 30 91 95 71 SMOD DPE 25 88 95 73 CHPS ESE 17 98 99 99 MCRL ESE 28 85 99 99 ROSS DSO 8.8 85 95 71 AMMB FDM 26 81 98 96 PSFT DSO 51 99 96 71 PBK BSL 25 92 98 89 MTSI DPE 28 85 95 73 HP OWD 54 87 99 97 NEV OCP 49 80 97 90 PEGA DSO 30 99 96 71 AE ORE 12 82 98 98 GPT BSB 48 84 98 93 MXP OCP 5.4 89 98 90 RATL DSO 37 84 94 71 VNTV DSO 27 99 96 71 PGSAY OWD 37 89 99 97 SAI FDM 43 90 99 96 WIND DSO 48 92 95 71 SIGM DCO 11 82 98 98 CBTSY DSO 55 98 95 71 ALOG DCO 32 91 99 98 LBI FDM 4.3 96 99 96 KEG OWD 11 91 99 97 TROW SEC 42 86 98 94 PPP OCP 45 89 98 90 MCAF DSO 46 96 95 71 SCH SEC 31 90 98 94 PMTS FSE 18 96 98 93 GDX.A RDR 17 80 97 94 RB OWD 28 93 99 97 KTII EEE 10 81 97 86 QCSB BSB 48 90 98 93 LOM OCP 16 99 98 90 RES OWD 15 86 98 97 PESC OWD 15 81 98 97 ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: Re: [CANSLIM] List of HI-EPS, HI-ERG stocks from TELESCAN Date: 21 Dec 1996 01:16:46 -0500 (EST) Dan, thanks for posting the list. Excuse my ignorance but I have few questions: What do EPSRk and ERG mean exactly? IBD calculates the EPS rank of the stock by a formula that I'd like to get a peek at. I wonder how much emphasis is put on the two latest quarters' increase and how much on yearly growth. What does Telescan use? Also is GrpRk the rank of the stock within the group or the rank of the group on the market? Can you describe Telescan and how you use it to pick stocks? Thanks, Zoran ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] (Fwd) Is the 8-10% rule realistic ? Date: 21 Dec 1996 08:42:02 -0500 The most basic premise of CANSLIM investing is timing. This means finding stocks that show superior earnings and revenues growth compared first to their industry group and second to the market at large, then studying the charts and the bases and resistance levels and identifying the pivot, or breakout, points reasonably accurately. This is the part of investing that you can control, your own homework and your own timing. What you can't control is the actions of all other investors, esp the institutional types. Because of this, as well as to protect yourself from your own mistakes in reading all of this, you should use a reasonably tight stop loss based, at least initially, upon your final buy price. This should be in the neighborhood of 8%. O'Neill's book explains why this nr was found to work, if you haven't read the book then this discussion group's comments will often make little sense to your investing methods. The key to using a stop is to protect you from what you can't control and thereby end up with a significant loss. First and foremost, you must protect your principal. If you lose that, you are out of the game and sitting on the bench, feeling real hurt and bruised. You are correct, many stocks, esp in the volatile mkt we have had lately, can flucuate wildly, even exceeding 10% in a week. This doesn't mean the stock is in trouble, that is why M is in CANSLIM. You have to be able to read and consider the mkt conditions in your hopefully daily assessment of your portfolio. good luck tom w ---------- > From: MMLEUN@ccmail.monsanto.com > To: canslim > Subject: Is the 8-10% rule realistic ? > Date: Fri, 20 Dec 1996 15:45:19 -0600 > > To all, > > I don't think the rule of cutting loss at 8-10% is realistic at > all. With the recent market volatility, even Coca - cola have a 10 % > adjustment within this week! Do I misunderstood O'Neil's rule ? Please > help on how this should be done! Thanks! > > Have a Merry X'mas! My favorite stocks for 1997 are : csco, coms > and cs! > > Martina > > > ---End of forwarded mail from MMLEUN@ccmail.monsanto.com ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: Fw: [CANSLIM] Stock Market and Stock Pick Date: 21 Dec 1996 08:51:19 -0500 Judging by what you have been buying, and how, you are definitely an investor. A trader does not normally bottom fish, nor does a CANSLIMer, and it certainly appears you have been doing a lot of that. The danger of bottom fishing is: a) there is a reason for the stock to be trading at low multiples, obviously it is out of favor for a reason. If you fail to identify the reason(s) and ensure they have been corrected, then you are buying a stock that can go even lower. The market at large sets the value, esp short term, when a stock is in trouble. b) Forget book value (it can often be overstated and at best is misleading if you don't do close and intense analysis of the asset valuations). c) Forget past earnings, they are only history now. Future expectations are what counts, and obviously they are low or the stock would not be at a low. d) Watch out for tax related selling, a stock that has tumbled is usually a candidate for yr end tax related selling to book losses to offset prior gains. e) Watch out for end of qtr window dressing by mutual funds and other institutional money mgrs. You appear to be "value shopping" which can prove out to be rewarding if you buy quality solid cos for the long term. On the other hand, by definition, you are not likely to be buying "top performing" cos, which is what the CANSLIM philosophy is trying to identify. good luck tom w ---------- > From: Haw-Jye Shyu > To: canslim@xmission.com > Subject: Re: Fw: [CANSLIM] Stock Market and Stock Pick > Date: Friday, December 20, 1996 10:12 AM > > Dear Dean: > > I like your approach. It makes sense to me, especially try to make over 100% > gain. But honest with you, whenever I buy the stock, I always strongly > believe that this time I'll make a big profit out of the stock (a gamler > psychological behavior). But, > > For the past year, I always > 1) do bottom fishing: > KM (buy at 8 sold at 12) , a 50% gain in 4 month > LSI (buy at 22 still hodl on it), 30% gain so far > CSCO buy at 60 sold at 68, a 13% gain in 1 one month > VJET (buy at 11 sold at 7 1/4) , 34% lost > > > 2) following suggestion from panelist of the Louis Ruskier TV program: > BLY (buy at 16 sold at 22), 37% gain in 4 month > BSPT (buy at 9 7/8 and sold at 6 1/4), 37% lost > IQ (mergered to CU) (equilent to buy at 23.5 sold at 22 and 1/8, this time I > stick to the 8% stop) and now it back to 24. 8% lost > > After a whole year of reading, following and trading (total 14 trades). I > discovered that I learned a lot but made very little money not to mention > when the tax hit me and the profit eaten by commision. Where did I go wrong? > Am I a trader or an investor? > > HJS > > ----- Begin Included Message ----- > > >From owner-canslim@xmission.com Fri Dec 20 01:06 EST 1996 > From: "Dean Edwards" > To: > Subject: Fw: [CANSLIM] Stock Market and Stock Pick > Date: Fri, 20 Dec 1996 18:13:52 +1300 > X-MSMail-Priority: Normal > X-Priority: 3 > MIME-Version: 1.0 > Content-Transfer-Encoding: 7bit > > What do I mean when I said "Reward / Risk" ratio? > The risk is that you always cut your losses at 7-8% no hesitation, no > questions, no doubts you just get out! > > What is my reward? > I do not buy a stock unless I think I can double my money. That is my goal > or aim. Trying to double your money makes you focus on stock selection and > forces you to find the very best stock. In a currency trade you don't risk > your money unless its a killer trade. The same thing with a stock > basically. > > CANSLIM helps you identify the strongest and best growth stocks in the > stock market. It also tells you when to cut your losses. If the purchase > price drops below 7-8%. However I have never been satisfy with 'M' market > conditions. If there was a correction in the market tomorrow, I am not > going to sell any of my stocks. For starters there are too many false > signals in the stock market. A correction in the market doesn't happen in > 1 day nor 1 week. When you have a major break in the market the trend still > takes a long time to be defined upward or downward and of course there are > always rallies in the market. > > Back to my Reward / Risk ratio. > Some of my companies have made returns that are over a 100%. I let the > company tell me when to sell my investment. For example a drop in profits, > decrease in sales, or market share, profit margins etc. I have found > outstanding companies using CANSLIM in the past, only to see large profits > evaporate. > For example in March 1994 there was a US interest rate hike. A market > correction lasting 9-10 months. I bought Cisco Systems and Wellfleet > Communications (now called Bay Networks) just before the correction. > Nothing wrong with the companies except market conditions. I sold both > companies for a small capital gain. Subsequently Cisco soared over 300% and > Bay over 100%. For 3 years my stock return performance was abysmal. I had > to study my mistakes to find out what I was doing wrong. I then made an > important discovery that has helped me improved my stock return > performance. > > I absolutely refuse to sell any stock unless company conditions change for > the worse or it drops below my 7-8% purchase price . I am currently holding > Fore Systems in my portfolio for a capital gain of 111%. I have taken the > initial risk at the beginning (if my purchase price dropped below 7-8% I > would have been forced to sell) and now I expect it to double to 200% (my > large reward). That is what I meant when I referred to Reward/Risk ratio. > My goal was to make a 100% return for taking the risk in the first place. > > Goal Setting > False market conditions would have normally shaken me out of a stock like > Fore Systems a long time ago. And then what would I have to show for it? A > small capital gain. Cut your losses and let your profits ride based on > "company" and not market conditions. If you already have a healthy gain on > your stock investment, then you don't have to worry about market > conditions. I tend to focus on company conditions and my goal is to aim > for a 100% return on my investment. If I didn't set that goal, I would > probably lose interest in the stock get bored and sell it. Again there > would be nothing wrong with the company but market conditions would spook > me enough to sell it or the stock price was sitting there doing nothing. My > other weakness is always wanting something to happen. Patience is a virtue > in the stock market.. > > Merry XMAS to all and happy New Year. > By the way there is suppose to be 200 people in this CANSLIM group. > How about everyone comes forward with there one favourite stock selection > for next year. I will be very happy to have 200 CANSLIM stocks to choose > from > as a Christmas present :-) > > Regards Dean > > ---------- > ------------------------------------------------------------------------------- From: Dan Sutton Subject: Re: [CANSLIM] List of HI-EPS, HI-ERG stocks from TELESCAN Date: 21 Dec 1996 09:23:44 -0500 (EST) At 01:16 AM 12/21/96 -0500, you wrote: > >Dan, thanks for posting the list. >Excuse my ignorance but I have few questions: >What do EPSRk and ERG mean exactly? IBD calculates >the EPS rank of the stock by a formula that I'd like >to get a peek at. I wonder how much emphasis is put on >the two latest quarters' increase and how much on yearly >growth. What does Telescan use? > >Also is GrpRk the rank of the stock within the group or the >rank of the group on the market? Can you describe Telescan >and how you use it to pick stocks? > >Thanks, >Zoran > Zoran, EPS Rank combines a company's earnings performance over the past five years into a single indicator so that it can be used to rank earnings momentum against all other companies. It is computed as the weighted sum of the following earnings growth rates (over 5 years), with the heaviest weight on the most recent quarter: Last quarter percentage change in EPS, Previous quarter percentage change in EPS, 5-year percentage change in EPS and EPS stability, which is one standard deviation of data fit through five years of quarterly EPS data (TELESCAN uses three years if five years are not available). ERG is the sum of three rankings EPS rank, price rank(a close facsimile of IBD's Relative Strength rank) and group rank which sum is then ranked against all other companies. Group Rank measures an industry group's strength over six months, using the sum of the group's relative performance, with the heaviest weighting on the most recent three months. TELESCAN is a database service that allows you to build customized searches for stocks using your choice of about 240 different fundamental and technical indicators. You can use a combination of 40 at a time to develop stock selections. They also have modules for Mutual Funds and Options, although I do not subscribe to those. The basic service is about $30 per month for one hour of online time. Additional hours are around $5 per. The software is around $300. While the information seems fairly accurate I occasionally find figures that do not agree with those posted by IBD, Barrons, Wall Street Journal or other sources.TELESCAN also has what they call a PROSEARCH builder where you enter a list of stocks and it will bring back the search parameters required to return the list. As an example I can enter IBD's weekend review and it will bring back the criteria that is similar in all these stocks that would be required to find them in a Prosearch scan. It will also backtest your searches and show you the return over any historic time period you desire(monthly or annually up to 3 years). It is an expensive service, but it has great potential. After you have the list, you still need to do your homework. The first week I had it, I spent hours building a "foolproof" search and bought a stock that ended up being de-listed, and is now selling on the bulletin boards for about 10% of what I paid. I am currently using two or three filters based on Ian Woodwards posting on American On-Line, as well as a fairly basic CANSLIM search. And by the way, TELESCAN has not made me rich yet, it is not the Holy Grail...only another research tool! After I download the stock info,I then plug it into EXEL using a spreadsheet I have devised to further analyse the selections. The spreadsheet cuts my initial analysis time down by about 90%. Hope this answers your questions. it is not the Holy Grail..it is not the Holy Grail...it is not the Holy Grail ------------------------------------------------------------------------------- From: "David F. Cameron" Subject: [CANSLIM] STRL Date: 21 Dec 1996 8:37:03 CST OK, I'm asking several of you to put your thinking caps on re: STRL. I bought STRL at a recent breakout when it passed 40. A look at the chart shows I was a little late on the pivot point (if you agree that it was one...) but decent enough given the move. After the buy, STRL went up to 44 - then seemed to start consolidating. It dropped to 41-1/2 by 41-/34 on lower than average volume. Then on Thurs. or Fri. IBD ran a front page article that mentioned STRL as a good stock with accelerating earnings. The next thing I knew is looking at Friday's close that STRL dropped to 39-1/2 (or so). Any interpretations? My gut feel is to sell if it drops below 38 because of the chart read, but there is a part of me that thinks someone is fading IBD on this one. I've seen it happen before - stocks they mention drop after the mention - maybe more than 10% - but then rebound. Or is this coincidence. Anyway, I'll follow my own star regardless, but Friday's move was unexpected, and I;d appreciate anyone's spin on this. Thanks, Dave Cameron dcameron@harper.cc.il.us ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] Wall Street Journal article Date: 21 Dec 1996 09:49:27 -0500 I will try not to hedge your question too much. What the article says is that there was heavy buy side volume on the S&P Mar contracts anticipating a good mkt thru Q1, thus the arbitragers took the opportunity to short sell the futures contracts at a high premium, while simultaneously buying the underlying stocks at today's price. Their reward: the immediate premium; their cost: tying up capital for up to three months; their risk: none, they have already locked in the net. As to the effect on the next contract expiration (which will actually be in Jan, Feb and Mar even tho we are talking about Mar contracts, all will be effected), it depends on what the mkt does in the next 1,2, and 3 months. Let's assume for the moment that I know what I am so often yapping about and the mkt does very well in Jan. These arbitragers will have a long posit in many stocks, while holding a short posit in the contracts. A month of time value will have elapsed, so the value of the contracts will have dropped, offset in part or more by the rising value of the underlying stocks. Depending on the size of the move, it may be financially beneficial (as well as releasing capital otherwise tied up) for them to buy back the contracts (hopefully lower than they short sold them) and sell the stocks (hopefully at a profit), thus leading to or anticipating a correction in the mkt which could reverse the situation. This same scenario will again hold true in Feb and Mar, assuming the mkt didn't already do a correction. I hope I have answered your basic questions, if I didn't or got too complicated, just ask again. tom w ---------- > From: Joan Sherman > To: canslim@xmission.com > Subject: [CANSLIM] Wall Street Journal article > Date: Friday, December 20, 1996 10:44 PM > > > > I have a question that I would appreciate if someone could explain for me > > According to the article (pgc2) Abreast of the Market - last paragraph: > Michael Schwartz, chief options strategist at Oppenheimer, said > exuberant buying at one point drove the March futures contract on the > S & P 500 to a large premium over fair value, in part because sellers > of the future were scarce due to the approaching year-end and holiday > season. Arbitragers bought the cash stocks aggressively and sold the > futures. > Firstly, explain this for me, please, secondly, what impact will this have > at the next options expiration? > Thanks, Joan Sherman > ------------------------------------------------------------------------------- From: Michael A Langston Subject: [CANSLIM] DG online Date: 21 Dec 1996 11:59:32 -0500 rumor has it that DG may go online in late january -- pricing is yet to be determined, and hardcopy will continue -- advertising for this service to begin after the new year, it might be a good idea to keep an eye peeled... mike ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: Re: [CANSLIM] List of HI-EPS, HI-ERG stocks from TELESCAN Date: 21 Dec 1996 16:23:44 -0500 (EST) Dan, thanks again. Your long explanation was very enlightening to me. One think that I don't like about these EPS rankings is that they don't provide you with info on the TREND of the EPS increase/decrease. For instance, if a stock had an astronomic EPS yearly increase 3 years ago and an extremely good previous quarter but a sluggish present one and average performance for the rest of the time it could still rank better than a stock with a consistently improving EPS increases. The standards deviation could help a little bit to solve this problem but if it was found relative to a straight line fit, I don't think it'll help much either. That's why I want to see the IBD formulas myself, or hope that O'Neil was smart enough to take my above concerns into consideration. I gotta work now...I'm flying in three days and there's still so much work to be done. Oh, I got bored and I bought me some SEMX on Friday. My father told me that he can hook me to the Net from Macedonia so probably I will be able to follow the market from there. Cheers, Zoran ------------------------------------------------------------------------------- From: joani@mindspring.com (Joan Sherman) Subject: Re: [CANSLIM] Wall Street Journal article Date: 21 Dec 1996 19:19:46 -0400 Tom, I appreciated your very clear explanation. There is so much to absorb regarding investing concepts and strategy - the one thing I know is how little I know. Nice to know your're there. Happy Holidays, Joan. 21 Dec 1996 20:17:14 -0500 One thing I have learned after almost 40 yrs in mkt is that I am still learning something new every day. That is one good aspect of my job, running the "back office" for a brokerage house, as it gives me some exposure to the trading aspects I would otherwise not have. Would hate to leave it for a more typical job. tom w ---------- > From: Joan Sherman > To: canslim@xmission.com > Subject: Re: [CANSLIM] Wall Street Journal article > Date: Saturday, December 21, 1996 6:19 PM > > Tom, I appreciated your very clear explanation. There is so much to absorb > regarding investing concepts and strategy - the one thing I know is how > little I know. Nice to know your're there. Happy Holidays, Joan. > ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] List of HI-EPS, HI-ERG stocks from TELESCAN Date: 21 Dec 1996 20:14:14 -0500 Don't count on ever seeing O'Neill's formulas, they are closely guarded, but I do know from verbal briefings I have had that the EPS formula does take into account the rate of increase/decrease in earnings, that is the primary point of the formula, to show rate of growth, not just earnings relative to other stocks. Glad to hear we won't lose you while on vacation. Since you got bored enough to buy another stock, does this mean all the papers are finished? Have a safe trip. tom w ---------- > From: Zoran Mitrovski > To: canslim@xmission.com > Cc: Zoran Mitrovski > Subject: Re: [CANSLIM] List of HI-EPS, HI-ERG stocks from TELESCAN > Date: Saturday, December 21, 1996 4:23 PM > > > Dan, thanks again. Your long explanation was very > enlightening to me. One think that I don't like about > these EPS rankings is that they don't provide you with > info on the TREND of the EPS increase/decrease. For instance, > if a stock had an astronomic EPS yearly increase 3 years ago > and an extremely good previous quarter but a sluggish present one > and average performance for the rest of the time it could still rank > better than a stock with a consistently improving EPS increases. > > The standards deviation could help a little bit to solve > this problem but if it was found relative to a straight line > fit, I don't think it'll help much either. > > That's why I want to see the IBD formulas myself, or hope that > O'Neil was smart enough to take my above concerns into > consideration. > > I gotta work now...I'm flying in three days and there's still > so much work to be done. Oh, I got bored and I bought me some > SEMX on Friday. My father told me that he can hook me to the > Net from Macedonia so probably I will be able to follow the > market from there. > > Cheers, > Zoran ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: [CANSLIM] Bored Date: 21 Dec 1996 23:00:58 -0500 (EST) Tom wrote: > Don't count on ever seeing O'Neill's formulas, they are closely guarded, > but I do know from verbal briefings I have had that the EPS formula does > take into account the rate of increase/decrease in earnings, that is the > primary point of the formula, to show rate of growth, not just earnings > relative to other stocks. Good then. I knew O'Neil was a smart guy. > Glad to hear we won't lose you while on vacation. Since you got bored > enough to buy another stock, does this mean all the papers are finished? Oh, no. I got bored from the Matlab programming and I figured I'd make my life more interesting. ;^) > Have a safe trip. Thanks and Happy Holidays to everyone. May 1997 be a 100% gain year for each of us. Or, that PhD degree and a lousy 70% would be fine with me. ;^) > tom Zoran ------------------------------------------------------------------------------- From: "fjsabour" Subject: Re: [CANSLIM] STRL Date: 21 Dec 1996 21:12:05 -0800 Dave, If I *had* to do something with STRL today, I will short it. 1) the stock was up against long term resistance dated mid-December 1995 at around 43.5 and did not break it (double top?) 2) both medium-term stochastic and longer term MACD show extreme overbought situations and are turning down. 3) buying support has not diminished yet (no large scale selling). Positive for long term hold. IMHO the stock is going to test $36 before it make another attempt at breaking 44 (it might have a one or two point jump before going down toward $36 within the next 3 days). Just my opinion. Fred ---------- > From: David F. Cameron > To: canslim@xmission.com > Subject: [CANSLIM] STRL > Date: Saturday, December 21, 1996 6:37 AM > > OK, I'm asking several of you to put your thinking caps on re: STRL. > > I bought STRL at a recent breakout when it passed 40. A look at the chart > shows I was a little late on the pivot point (if you agree that it was > one...) but decent enough given the move. > > After the buy, STRL went up to 44 - then seemed to start consolidating. > It dropped to 41-1/2 by 41-/34 on lower than average volume. Then on > Thurs. or Fri. IBD ran a front page article that mentioned STRL as a > good stock with accelerating earnings. The next thing I knew is > looking at Friday's close that STRL dropped to 39-1/2 (or so). > > Any interpretations? > > My gut feel is to sell if it drops below 38 because of the chart read, > but there is a part of me that thinks someone is fading IBD on this one. > I've seen it happen before - stocks they mention drop after the mention - > maybe more than 10% - but then rebound. Or is this coincidence. > > Anyway, I'll follow my own star regardless, but Friday's move was > unexpected, and I;d appreciate anyone's spin on this. > > Thanks, > > Dave Cameron > dcameron@harper.cc.il.us ------------------------------------------------------------------------------- From: "Michael R. Jeffers" Subject: [CANSLIM] How High P/E Date: 21 Dec 1996 23:02:32 PST I've heard from several posters that bottom fishing is against the CANSLIM philosiphy. I agree, but there should be some sort of limit to trailing or expected P/E's. Shouldn't there? I mean, if the P/E has no relation to the growth rate, then how can you tell when you're preparing to buy something that is poised to come crashing down? Is a P/E of 50 too much? What about 75 or 100+? If a trailing P/E is below the expected earnings growth rate of a stock that has shown steady earnings growth, couldn't that identify a stock that is ready for strong future growth? I recently bought SEMX based on that reason. Well, it's just about time for "It's a Wonderful Life", and I can't miss that most excellent show. Thanks for perusing these poorly stated words. Merry Christmas! {:)> Just Little 'Ole Me, Michael R. Jeffers ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] How High P/E Date: 22 Dec 1996 12:29:32 -0500 I say again, I am not aware of any direct correlation between PE (whether based on trailing or projected earnings) and rate of earnings growth. PE is a reflection of investors attitude towards the stock. Some investors will buy a stock because of historic earnings patterns, these are typically conservative investors looking for a safe, stable stock. Some investors will buy a stock based on future outlook where they expect a rapid rise in earnings. Where these dominate, you will often see very high (over 100) PE ratios. It is also important to recognize how recently the co turned profitable. Trailing PE where the co only earned a few cents can often be high, whereas forecasted earnings might drop the PE down to the 20s or 30s. Invariably, a hi PE stock will crash/correct big time if these high expectations are not met or exceeded. On the other hand, a very low PE stock says very low expectation for the future. Without a change in expectation (such as might happen if they came in with earnings way above expectation, with reason to expect this again next qtr), the price won't move up significantly since the only buyers are the conservative ones. When you talk about a "bottom fishing" stock, you are describing one well below its 12 month high. To trade there means there is a problem. Until the problem is corrected, high future expectation is unlikely, thus high PE also unlikely. Without either a significant increase in EPS or PE, the price doesn't go up measurably. Most good CANSLIM candidate stocks will have a PE well above average because of hi future expectations. Historic earnings growth may or may not support this high expectation. tom w ---------- > From: Michael R. Jeffers > To: canslim@xmission.com > Subject: [CANSLIM] How High P/E > Date: Sunday, December 22, 1996 2:02 AM > > I've heard from several posters that bottom fishing is against the > CANSLIM philosiphy. I agree, but there should be some sort of limit to > trailing or expected P/E's. Shouldn't there? > I mean, if the P/E has no relation to the growth rate, then how can > you tell when you're preparing to buy something that is poised to come > crashing down? Is a P/E of 50 too much? What about 75 or 100+? > If a trailing P/E is below the expected earnings growth rate of a > stock that has shown steady earnings growth, couldn't that identify a stock > that is ready for strong future growth? I recently bought SEMX based on > that reason. > Well, it's just about time for "It's a Wonderful Life", and I can't > miss that most excellent show. Thanks for perusing these poorly stated > words. Merry Christmas! {:)> > > > Just Little 'Ole Me, > > Michael R. Jeffers ------------------------------------------------------------------------------- From: "tom worley" Subject: [CANSLIM] Some thoughts on "M" in CANSLIM Date: 22 Dec 1996 19:16:10 -0500 I remain concerned about the "quality" of market advancement, and would like to share a few tidbits I picked up from my local Sunday paper business section, as well as my own editorial comments. According to AMG Data Services, which tracks weekly mutual fund cash flows, a net $1.8 billion flowed out of equity funds in the week ended Wednesday, bringing net redemptions so far in Dec to $3.7 billion. Equity funds have not suffered net outflows of cash in any month since Sept 1990. Latest outflow could be mostly seasonal, since many investors have been trained not to put money in during Dec to avoid a cap gains payout (and tax). Analysts do expect an inflow for the remainder of Dec, and much more in Jan as many investors get annual bonuses, and 401s again have to place funds somewhere. Inflows could be as large as $5 biliion/week for the next two weeks. Remember that funds have to be invested within their limits (often 5% or less cash allowed) by the end of the qtr. The mkt tends to reverse on the Monday following a triple witching Friday. With NASDAQ down sharply, and the techs showing poorly, and the Dow 30 only up 10, I rate Friday as down, so look for a moderate move up on Monday. Europe will give us our first good clue. Volume was especially heavy on Friday, even for triple witching. I have no good answer as to why, but still expect light vol for the remainder of the year. This could lead to excessive volatility. When you try to understand "M", remember to look at the big picture. One day, or even one week, does not set the tone for market conditions. tom w ------------------------------------------------------------------------------- From: patrick.wahl@unpcbbs.cts.com (Patrick Wahl) Subject: [CANSLIM] stock symbols Date: 22 Dec 1996 12:15:36 GMT I know that stock symbols on the NASDAQ are 4 letters long, and if they are 5 letters, the fifth means something, like an F is a foreign stock. I found a stock symbol with a Y (NICEY) and am stumped on what the Y means. Can anyone explain this one? ------------------------------------------------------------------------------- From: "David F. Cameron" Subject: Re: [CANSLIM] STRL Date: 23 Dec 1996 8:08:07 CST Fred, Thanks for your opinion (I think...). If you're right - I'm definitely not reading the charts right of late. I'll admit that I considered (when I bought, and I guess still...) the high reached in mid-December 1995 too far back to be serious overhead supply - so I haven't really been thinking in terms of double top. Its interesting that 2 people can look at a chart - and one buys (granted a couple weeks ago) - and the other would shun - even short if pressed. I appreciate your time. Anyone else have an opinion? Dave dcameron@harper.cc.il.us > > Dave, > If I *had* to do something with STRL today, I will short it. > 1) the stock was up against long term resistance dated > mid-December 1995 at around 43.5 and did not break it (double > top?) > 2) both medium-term stochastic and longer term MACD show extreme > overbought situations and are turning down. > 3) buying support has not diminished yet (no large scale > selling). Positive for long term hold. > IMHO the stock is going to test $36 before it make another > attempt at breaking 44 (it might have a one or two point jump > before going down toward $36 within the next 3 days). > > Just my opinion. > > Fred > > ---------- > > From: David F. Cameron > > To: canslim@xmission.com > > Subject: [CANSLIM] STRL > > Date: Saturday, December 21, 1996 6:37 AM > > > > OK, I'm asking several of you to put your thinking caps on re: > STRL. > > > > I bought STRL at a recent breakout when it passed 40. A look > at the chart > > shows I was a little late on the pivot point (if you agree > that it was > > one...) but decent enough given the move. > > > > After the buy, STRL went up to 44 - then seemed to start > consolidating. > > It dropped to 41-1/2 by 41-/34 on lower than average volume. > Then on > > Thurs. or Fri. IBD ran a front page article that mentioned > STRL as a > > good stock with accelerating earnings. The next thing I knew > is > > looking at Friday's close that STRL dropped to 39-1/2 (or so). > > > > Any interpretations? > > > > My gut feel is to sell if it drops below 38 because of the > chart read, > > but there is a part of me that thinks someone is fading IBD on > this one. > > I've seen it happen before - stocks they mention drop after > the mention - > > maybe more than 10% - but then rebound. Or is this > coincidence. > > > > Anyway, I'll follow my own star regardless, but Friday's move > was > > unexpected, and I;d appreciate anyone's spin on this. > > > > Thanks, > > > > Dave Cameron > > dcameron@harper.cc.il.us > ------------------------------------------------------------------------------- From: Jeff Beckham Subject: Re: [CANSLIM] STRL Date: 23 Dec 1996 15:13:48 -0700 At 08:08 AM 12/23/96 CST, you wrote: >Fred, > >Thanks for your opinion (I think...). If you're right - I'm >definitely not reading the charts right of late. I'll admit >that I considered (when I bought, and I guess still...) the >high reached in mid-December 1995 too far back to be serious >overhead supply - so I haven't really been thinking in terms >of double top. > >Its interesting that 2 people can look at a chart - and >one buys (granted a couple weeks ago) - and the other would >shun - even short if pressed. After reading the IBD article and reviewing DG, I took a small position in this stock this morning at $40. If their projections on earning are correct this could be a real winner. Jeff Beckham ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] stock symbols Date: 23 Dec 1996 19:13:16 -0500 The "Y" in the fifth place of the symbol indicates it's an ADR (American Depositary Receipt). If it was an Ordinary, it would have the usual "F" to indicate foreign. Just for everyone's info, as well as to show off, if the fifth ltr is a "C" or "E", look out, they mean that it has failed NASDAQ's capitalization listing requirement (C) or has failed to file required reports, typically qtr financial reports, and is trading on an exception basis (E). A "D" indicates it has done a split, usually (maybe always) a reverse split. I think there are a few other letters used in even rarer cases, but can't think of them just now. If anyone can, and wants to try to stump the Professor, take your best shot. tom w ---------- > From: Patrick Wahl > To: canslim@xmission.com > Subject: [CANSLIM] stock symbols > Date: Sunday, December 22, 1996 7:15 AM > > I know that stock symbols on the NASDAQ are 4 letters long, and if they > are 5 letters, the fifth means something, like an F is a foreign stock. > I found a stock symbol with a Y (NICEY) and am stumped on what the Y > means. Can anyone explain this one? ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: [CANSLIM] SEMX Date: 23 Dec 1996 23:38:50 -0500 (EST) Nice 1 pt. jump on 3-4 the avg volume. People obviously like this stock. I like it when they jump a point or two right after you buy them. I bought it at 13 3/4 Friday, and it closed 14 3/4 today with a high of 15 1/4. And what I like even better is the fact that I didn't check it all day today. It's 11:30 pm now and this is the first time I checked it. I'm starting to become, as they say, "seasoned". I'm finally done with the papers, I think. I faxed them down to Florida for my advisor to check them and give me the green light. One more day till home...Yes. HAPPY HOLYDAYS TO EVERYONE! (I know I sound delirious but who wouldn't after two weeks of 16 hr work days and 5 hrs sleep per night. ;^)) Cheers, Zoran ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] SEMX Date: 24 Dec 1996 07:35:54 -0500 Been there, done that, know what you're saying. Good to be young! tom w ---------- > From: Zoran Mitrovski > To: canslim@xmission.com > Cc: Zoran Mitrovski > Subject: [CANSLIM] SEMX > Date: Monday, December 23, 1996 11:38 PM > > > Nice 1 pt. jump on 3-4 the avg volume. > People obviously like this stock. > I like it when they jump a point or two > right after you buy them. I bought it > at 13 3/4 Friday, and it closed 14 3/4 > today with a high of 15 1/4. > And what I like even better is the fact that I > didn't check it all day today. It's 11:30 pm > now and this is the first time I checked it. > I'm starting to become, as they say, "seasoned". > > I'm finally done with the papers, I think. > I faxed them down to Florida for my advisor > to check them and give me the green light. > > One more day till home...Yes. > > HAPPY HOLYDAYS TO EVERYONE! > (I know I sound delirious but who > wouldn't after two weeks of 16 hr work > days and 5 hrs sleep per night. ;^)) > > Cheers, > Zoran ------------------------------------------------------------------------------- From: patrick.wahl@unpcbbs.cts.com (Patrick Wahl) Subject: Re: [CANSLIM] stock symbo Date: 23 Dec 1996 15:03:00 GMT ST>From: "tom worley" ST>The "Y" in the fifth place of the symbol indicates it's an ADR (American ST>Depositary Receipt). If it was an Ordinary, it would have the usual "F" to ST>indicate foreign. Thanks for the dope. I don't know exactly what the difference is, but don't try to explain. I'll be out of here freezing my you know what off back in MN anyway for a while. Maybe I can scrounge up a good stock to post here by the time I return. ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: Re: [CANSLIM] SEMX Date: 24 Dec 1996 11:59:56 -0500 (EST) Guys just watch the rocket take off. I think I said few weeks ago that if this one breaks the resistance at around 14 it's gonna go up strong. That's what's happening right around these days. It's at 15 1/2 as I write this with a day's high of 15 5/8 on around twice the avg volume by noon. Although I am little bit temped to get my 13% "in two days" and run away, I decided to sit on this one untill I come back from Macedonia. Just to see whether patience will pay off. I also want to see whether more money will look for it after the holidays and into the new year. (from the "Reminiscences of a Student Trader") Cheers, Zoran ;^) ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: [CANSLIM] SGMA Date: 24 Dec 1996 12:47:51 -0500 (EST) And how about this baby-rocket? It almost doubled from 11 to 20 in ONE month! And I rode it from 13 to around 16 (was it?). If only I had hold onto my picks (HDCO and SGMA) I'd have more than doubled my money in a month or so. Now I see what you guys mean by "hold your winners". Although I'm up only around 40% since I started (Don't get me wrong, "only" is just when compared to the 100% i spoke of) I think that what i paid for this lesson will be worth it. At the same time I wouldn't dismiss my "be careful and wary" strategy too soon. I hardly had (or felt) ANY risk of loosing money whatsoever since I begun, and that's what I think is most important for a beginner, especially in a choppy market for the techs such as this one. Now that I have the profit I have, I feel much more comfortable being patient about SEMX. Or whatever, I just felt like saying something. Cheers, Zoran ;^) ------------------------------------------------------------------------------- From: Johan Van Houtven Subject: Re: [CANSLIM] SGMA Date: 24 Dec 1996 23:27:16 +0100 At 12:47 PM 12/24/96 -0500, you wrote: >And how about this baby-rocket? >It almost doubled from 11 to 20 in ONE month! >And I rode it from 13 to around 16 (was it?). >If only I had hold onto my picks (HDCO and SGMA) I know what you mean. I was in in the Spring at 16. I had NO idea about WHEN to buy a stock back then. I rode it down to 11. Picked up a bunch at 11. And sold at 17 1/2 a few days ago. Reason: I got shared during the few days that it was choppy. I had been looking at that 'loss' for a lot of months... Anyway I made a nice profit, but not as much as I could have. And it looks like SGMA's ascend is not over yet. >I'd have more than doubled my money in a month or >so. Now I see what you guys mean by "hold your >winners". Although I'm up only around 40% since >I started (Don't get me wrong, "only" is just >when compared to the 100% i spoke of) I >think that what i paid for this lesson will be >worth it. At the same time I wouldn't dismiss >my "be careful and wary" strategy too soon. >I hardly had (or felt) ANY risk of loosing money >whatsoever since I begun, and that's what I >think is most important for a beginner, especially >in a choppy market for the techs such as this one. >Now that I have the profit I have, I feel much >more comfortable being patient about SEMX. >Or whatever, I just felt like saying something. I bought SEMX at an average of 13 7/8. I think this will be a big winner in the comming months. It is a nice CANSLIM type of stock. I also recently bought TMSR @ 9 and AALR @ 13. TMSR is Trustmaster. They sell quality joysticks and stuff like that. Their business is booming. They are now even selling in Belgium. They recently opened a European distribution centre. They have products for PC and Mac. AALR is Advanced Logic Research. Intel PPro based servers and workstation. Both with WinNT and UNIX. Considering the increasing demand for these kind of systems, I expect them to do really well in the next year. My target is 20 by end 1997. As a upcomming CANSLIM stock (now still speculative) GEOI. They are drilling for oil. Both yesterday at 3 5/8, up almost 15% today. My biggest holding is APCC. Their business is UPSs (uninteruptable power supplies) . Business is booming. Even here in belgium the now are no. 1. And with all those new worstations that will be bought, they will want a nice UPS... :^) It's now about 28. My target is 25 to 35% by end '97. Disclaimer: I own all of the above. I'm not giving advice. Please do your own research. Cheers, PS: Happy holidays to all of you! ------------------------------------------------------------------------------- From: Johan Van Houtven Subject: Re: [CANSLIM] SEMX Date: 24 Dec 1996 23:30:03 +0100 Zoran, I noticed that at least another participant of this mailing list owns SEMX. Maybe we can keep eachother informed, about what is going on with it, when to sell, etc? At 11:59 AM 12/24/96 -0500, you wrote: > >Guys just watch the rocket take off. >I think I said few weeks ago that if this >one breaks the resistance at around 14 it's >gonna go up strong. That's what's happening >right around these days. It's at 15 1/2 as I >write this with a day's high of 15 5/8 on around >twice the avg volume by noon. >Although I am little bit temped to get my >13% "in two days" and run away, I decided >to sit on this one untill I come back from >Macedonia. Just to see whether patience >will pay off. I also want to see whether >more money will look for it after the holidays >and into the new year. > >(from the "Reminiscences of a Student Trader") > >Cheers, >Zoran >;^) > > > ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: Re: [CANSLIM] SEMX Date: 24 Dec 1996 18:37:45 -0500 (EST) Sure, Johan. The SEMX club... Z. > > Zoran, > > I noticed that at least another participant of this mailing list owns SEMX. > Maybe we can keep eachother informed, about what is going on with it, when > to sell, etc? > > At 11:59 AM 12/24/96 -0500, you wrote: > > > >Guys just watch the rocket take off. > >I think I said few weeks ago that if this > >one breaks the resistance at around 14 it's > >gonna go up strong. That's what's happening > >right around these days. It's at 15 1/2 as I > >write this with a day's high of 15 5/8 on around > >twice the avg volume by noon. > >Although I am little bit temped to get my > >13% "in two days" and run away, I decided > >to sit on this one untill I come back from > >Macedonia. Just to see whether patience > >will pay off. I also want to see whether > >more money will look for it after the holidays > >and into the new year. > > > >(from the "Reminiscences of a Student Trader") > > > >Cheers, > >Zoran > >;^) > > > > > > > > ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] stock symbo Date: 26 Dec 1996 07:06:24 -0500 The difference is simple, an ordinary is just that, equal to our domestic shares but not registered or listed here. An ADR represents the deposit into a US bank (usually in NYC) of a quantity of ORD shares, against which the holding firm then issues ADR shares, sometimes on a 1:1 basis, sometimes as a unit, which can then trade on US exchanges. tom w ---------- > From: Patrick Wahl > To: canslim@xmission.com > Subject: Re: [CANSLIM] stock symbo > Date: Monday, December 23, 1996 10:03 AM > > > ST>From: "tom worley" > > ST>The "Y" in the fifth place of the symbol indicates it's an ADR (American > ST>Depositary Receipt). If it was an Ordinary, it would have the usual "F" to > ST>indicate foreign. > > Thanks for the dope. I don't know exactly what the difference is, but > don't try to explain. I'll be out of here freezing my you know what off > back in MN anyway for a while. Maybe I can scrounge up a good stock to > post here by the time I return. ------------------------------------------------------------------------------- From: "tom worley" Subject: [CANSLIM] STRL, AALR,SGMA, SEMX,HDCO, APCC Date: 26 Dec 1996 22:21:25 -0500 Ok, finally had a reasonably quiet day at work and was able to get in full day's duties plus start some catchup (course worked from 9AM to 8PM to do this), but I threatened myself with bodily harm if I again left work without at least looking at STRL, and hopefully some of the other ideas mentioned here. Because it's late, my comments will be mercifully brief, if someone has a question or disagrees, feel free to jump in. STRL - not to gang up on Fred, but I'm going to make it the third bull to his bear, even tho I HATE the medical groups. What is misleading is that most quote systems show it to have a $1.51 loss for the trailing 12 mos. However this includes a $81.3 mil ($2.44/share) write off stemming from the acquisition of Amsco (which is why the revs took off). Without this charge in Q1, the six mos would show 60 cents vs 47. The Q2 was 33 cents, expected was 31 cents. On 12/19 they completed the acquisition of Calgon Vestal from Bristol Myers for $75mil cash, it has revs of $50 mil so this looks like a good price and is a good fit for the co. Chartwise, it doesn't look that safe. 50dma is at 37.5, 200 dma just above 33, RS recently dropped but still at 90 on latest DG, the closest you've got to a base is around 35 with a slightly neater consolidation around 33-34 and a better base at 31. Earnings forecasted for FY97 is a powerful $1.55 vs $0.66 for FY96, excluding the write off, so far thru 6 mos they have $0.61, for the second half will be impressive to be in line with estimates. Funds already have 32%, so less likely they will be buying more, and up/down ratio is 2.0. On the chart looks like the stock was wedging down the past two weeks, some of this could have been healty profit taking and some maybe related to options expiration. I would expect some more "back and fill" but all in all doesn't look bad. I definitely would not short it even as much as I hate the group it's in. One comment on the "Dec high resistance", O'Neill's DG chart doesn't even show it, which gives you a clue as to how important it is. AALR - again not a great chart pattern, altho all the great CANSLIM nrs are there, RS 97, u/d 2.7, EPS a little weak at 74, funds only own 5% as of last report so could be a strong positive altho I suspect a lot of the recent heavy vol was funds purchasing, so next report may show them already well positioned. The only serious base is bach around 8-9, and there has not been a good consolidation since. One concern I have is the sig increase in profits without corresponding rev growth. Some of this may be a shift to higher margin products, but don't feel like that is whole picture. SGMA - strong nrs all around, took off like Zoran's rocket after basing at 11 and setting up a short 2 week plateau at 13. EPS 97, RS 98, u/d 3.0. a/d A, earnings forecast for '97 $1.10 vs .86. Vol lately has been heavy. SEMX - very extended (50 dma back at 11 with stock trading 13-14+) but so far looks like will hold here. Man/probably needs to consolidate but don't know if the Santa rally and Jan effect will allow for that. CANSLIM nrs again strong, funds had 1% last report, but again recent heavy vol may have changed that. EPS 99, RS 91, A/D A, U/D only 1.8 (a minor concern here with the heavy vol, but just may be tax related profit taking). Small float (4.0 mil shares) so expect it to be volatile on relatively lite vol. Strong earnings forecasts, FY 96 est at .85 (did .60 thru 9 mos, with .21 each last two qtrs). Q4 appears weakest, but still did .14 a year ago. Q3 performance impacted by return of $700K of wafer disks (they do wafer disk polishing among other things) due poor surfaces. The impact of this was apparently felt in Q3 on the bottom line, which still matched Q2. Managed to beat its recent high of 15.625 by hitting 16.5 today and close at 16.125. PE moderate at 22. HDCO - did 81 cents for Q4, 76 expected. buy of Zycon appears favorable, both Zycon and Hadco stocks went up when Hadco outbid a competitor for this deal. Apparently Hadco was going to build a mfr plant in CA, now w/Zycon they don't need to. No layoffs contemplated, and they like Zycon's penetration into the Asian mkt. Chartwise, looks like its basing out now, 50 dma has caught up, 200 dma not far behind. Vol has been sporactic. RS has fallen off, but could turn up with increased and consistent vol, watch IBD for a change. That's it, I'm out of words and hot air. I learned a long time ago that the characteristics I look at on a chart are not necessarily what others consider most important. Feel free to pot-shot, won't hurt my feelings, that's how we all learn to make better decisions. It's also how we hear about something we may have missed, or about an industry or specific stock where someone else may have greater expertise. We can all share here, freely. Now, if I can only remember the words to Up with America ...... tom w ------------------------------------------------------------------------------- From: OWENTIME@delphi.com Subject: [CANSLIM] Picks '97 Date: 27 Dec 1996 00:34:25 -0500 (EST) I'm so new to CANSLIM, I'm still using cyclical gossip to select trends and corresponding stocks rising up from the lagoons of mired prices through the bulk of '97. Your feedback is very welcome to dispute any of my "guestimations." 3 areas: I. Dogs of the Dow: I favor AT&T over Bethlehem Steal only because this next year is likely to be the year of more big mergers (AT&T might get even with MCI and B.T. and.... In addtion, AT&T would not be totally irrational in snapping up AOL or Compuserve. Understand, I didn't CANSLIM these yet, but to continue; my uncertainty of Bethlehem is the cheap grade steal in a down year of '97 when car purchases etc. are maxxed out. Though beaten down 37% this year, I don't understand as fail safe a position here (including January effect {Jan 1-5} as say a more conservative lean toward AT&T.) o I'm not easily sold on Bethlehem. II. Bank merger companies: Here, Barnett Bank of FLA. is likely to get gobbled up, nice earnings in and amongst well positioned boating, car buying, condo buying snowbirds etc. My other choice would be AMEX merging with GE, though vehemently denied. I wonder about Bank of Tx. {have heard of it, though don't know the facts yet} I also like Greenpoint Savings Bank of Brooklyn NY. III. Hi-Technology My gut tells me; according to the Wall Street almanac, years ending in 7 of incumbent pres's 2nd term are doldrum or decline years (both historically and traditionallly) so I don't see '97 as an exception here. My Hi-Tec picks fall into Network companies (BAY only if it gets hit hard in the next 3 quarters) and possible newcomers (IPO.) I like 3coms, but only after a good downward spike. Conclusion: Am leery of Biotechnology in a flat mkt. year of '97. My strategy is to wait atleast until March or April before implementing plans, unless really good numbers appear on a CANSLIM sheet that indicate solid bullishness for micro and small caps, and mid caps. ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] Picks '97 Date: 27 Dec 1996 06:36:24 -0500 A fast response as I have to get ready for work. First, a general observation - you seem more interested in buying a stock after a sharp reversal. This suggests to me you are more a value based investor than a CANSLIMer. Nothing wrong in that if it works for you, but this group won't be of much help since it is contrary to O'Neill's philosophy. Barnett - I doubt it will be a takeover target. There are already enough large banks well positioned throughout FLA. Barnett is just too large except for a giant to gobble up. Regional banks on NASDAQ are better candidates to study if you want a t/o target. 1997 - while I never try to fight history, I will keep repeating myself. Anyone who tries to predict this mkt on historical grounds is overlooking the dynamics of it. To my knowledge, never in history have we had a mkt like this one with slow economic growth, growing world economy, strong dollar, low inflation, low interest rates, low unemployment, and ever increasing technology. I think we could easily break 7500 on the Dow in '97, maybe even 8000. My money is still on this "aging bull". good luck tom w ---------- > From: OWENTIME@delphi.com > To: canslim@xmission.com > Subject: [CANSLIM] Picks '97 > Date: Friday, December 27, 1996 12:34 AM > > I'm so new to CANSLIM, I'm still using cyclical gossip to select > trends and corresponding stocks rising up from the lagoons of > mired prices through the bulk of '97. > Your feedback is very welcome to dispute any of my "guestimations." > > 3 areas: > I. Dogs of the Dow: > I favor AT&T over Bethlehem Steal only because this next year > is likely to be the year of more big mergers (AT&T might > get even with MCI and B.T. and.... In addtion, AT&T would > not be totally irrational in snapping up AOL or Compuserve. > > Understand, I didn't CANSLIM these yet, but to continue; > my uncertainty of Bethlehem is the cheap grade steal in a > down year of '97 when car purchases etc. are maxxed out. > Though beaten down 37% this year, I don't understand as > fail safe a position here (including January effect {Jan 1-5} > as say a more conservative lean toward AT&T.) > > o I'm not > easily sold on Bethlehem. > > II. Bank merger companies: > Here, Barnett Bank of FLA. is likely to get gobbled up, nice > earnings in and amongst well positioned boating, car buying, > condo buying snowbirds etc. My other choice would be > AMEX merging with GE, though vehemently denied. I wonder about > Bank of Tx. {have heard of it, though don't know the facts yet} > I also like Greenpoint Savings Bank of Brooklyn NY. > > III. Hi-Technology > My gut tells me; according to the Wall Street almanac, years > ending in 7 of incumbent pres's 2nd term are doldrum or decline > years (both historically and traditionallly) so I don't see > '97 as an exception here. My Hi-Tec picks fall into > Network companies (BAY only if it gets hit hard in the next 3 > quarters) and possible newcomers (IPO.) I like 3coms, but > only after a good downward spike. > > Conclusion: Am leery of Biotechnology in a flat mkt. year of '97. > My strategy is to wait atleast until March or April before > implementing plans, unless really good numbers appear on > a CANSLIM sheet that indicate solid bullishness for > micro and small caps, and mid caps. ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] Picks '97 Date: 27 Dec 1996 21:00:42 -0500 An addl comment I picked up this evening, apparently a number of the steel producers are showing a substantial increase in insider buying. Certainly would be a positive, but doesn't excite me as it's an industry that is too cyclical and doesn't carry the high PE of the techs. tom w ---------- > From: OWENTIME@delphi.com > To: canslim@xmission.com > Subject: [CANSLIM] Picks '97 > Date: Friday, December 27, 1996 12:34 AM > > I'm so new to CANSLIM, I'm still using cyclical gossip > I favor AT&T over Bethlehem Steal only because this next year > is likely to be the year of more big mergers (AT&T might > get even with MCI and B.T. and.... In addtion, AT&T would > not be totally irrational in snapping up AOL or Compuserve. > > Understand, I didn't CANSLIM these yet, but to continue; > my uncertainty of Bethlehem is the cheap grade steal in a > down year of '97 when car purchases etc. are maxxed out. > Though beaten down 37% this year, I don't understand as > fail safe a position here (including January effect {Jan 1-5} ------------------------------------------------------------------------------- From: "Richard S." Subject: [CANSLIM] Increasing position. Date: 28 Dec 1996 01:38:17 -0600 The other night I was reading O'neals book, and it seems that I remember him saying that when a stock reached a 20% increase in price, you needed to decide if you wanted to either sell and take your profit or purchase more, I think he called it pyramiding. What does everyone think about this concept? Is it something that most canslimers follow? Richard ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] Increasing position. Date: 28 Dec 1996 05:05:07 -0500 To keep my portfolio diversified and keep my commissions low (even tho I enjoy discounted commissions, I still have to pay something to cover the cost of clearing charges), I tend to buy my entire position at one time. If I had more funds to work with tho, I would follow the pyramid concept. O'Neill is not the only one to suggest it, it is a fairly well known scheme and makes sense. It is esp useful if you are not totally confident about your selection, timing or market. Buy part of your position, if it proves you right, then add to the position. tom w ---------- > From: Richard S. > To: CANSLIM > Subject: [CANSLIM] Increasing position. > Date: Saturday, December 28, 1996 2:38 AM > > The other night I was reading O'neals book, and it seems that I remember > him saying that when a stock reached a 20% increase in price, you needed to > decide if you wanted to either sell and take your profit or purchase more, > I think he called it pyramiding. What does everyone think about this > concept? Is it something that most canslimers follow? > > Richard ------------------------------------------------------------------------------- From: "tom worley" Subject: [CANSLIM] Goodbye to tax loss carryforward Date: 28 Dec 1996 05:13:49 -0500 Congratulate me, I finally did it. It has taken a lot of years, but in the past week I took profits on two of my penny stocks (17% in a month on one, 36% in 7 weeks on the other) to give me enough profits for 96 to take my tax loss c/f below $3000 (the max that can be taken annually against ordinary income). Thus, I will enter 97 with no "overhang" and profits will be real. It was important to me to reach this point both to get rid of the financial "excess baggage" I still had from my early years of being duped by mngmt as a rookie broker as well as to avoid losing my wife's portion, which I would not be able to use after this year. This is a milestone that was years in the making. This is another example of why I always reminded my clients to review where they stood on taxes during the month of Sep or Oct, advance planning can save money. May 1997 be a much better year. tom w ------------------------------------------------------------------------------- From: "tom worley" Subject: [CANSLIM] "M" in CANSLIM Date: 29 Dec 1996 19:45:10 -0500 Once again, I address myself to the most difficult task of analyzing market conditions overall. Tonight I am once again stealing from reports from Bear Stearns that happen to make sense to me. First topic is volatility, followed by comments on the tech industries and the restuarant group. VOLATILITY: Bear did a review thru 12/20 of the nr of days showing an intraday swing (up or down) of 1% and 1.5% compared to the past ten years. It found 98 and 38 such sessions for 96 compared to a ten year avg of 96 & 37. What tends to make 96 seem so volatile is that it is way ahead of the three prior years. The nrs for 93, 94 and 95 were 37/7; 67/17; and 44/5. Bear comments on how the mkt, this past yr, was far more reactive to "events" rather than anticipating and discounting those same events. This past week Computer Associates warned that it will fall short of analyst's expectations, fear that this trend will affect other tech stocks as we approach another earnings reporting cycle hurt NASDAQ and the tech stocks in particular. Contrasting this, GM announced that estimates for its results are approx 40% too high, and there was negligible reaction. Go figure. Didn't figure CA was that dominant a co for the techs groups. Bear does not expect current energy price levels to be sustained, however a "waking up to reality" in that sector "could be some fallout in stocks and bonds". Bear also notes a surprising indication of an increase in the Defense industry, marked by Lockheed Martin last week announcing 1000 job openings, with a planned hiring of 3000 more workers in CA over next three yrs. "For growth stock investors, the market's recent setback has left several "less obvious" steady earnings growers selling at or below their long-term growth rates based on 1996 estimates. Arbor Healthcare, Maxim Integrated Products, Pep Boys, Carnival Corp and Universal Health Svcs are among the most consistent profit-growers over a one and three year time frame in our universe. The last two also meet this criterion on a five year basis, and Pep Boys is among the steadiest earnings growers in the S&P 500 for the past one, three, five, and ten years." From another Bear report, Deloitte & Touche did a survey of U.S. business leaders in Nov 96 regarding their views of which technologies will be dominant beyond the year 2000. Following are the results: Knowledge based info networks - 63% Internet - 58% Intranet - 55% Electronic Commerce - 55% (I like the implications of this for my CU) Digital Networks - 50% Email - 47% Multimedia tech - 46% Wireless comms - 45% Mobile computing - 34% This same report forecasts global PC shipments continuing at an annual increase of 18 to 20 percent thru the end of this century. OK, boys and girls, the Professor is tired and wants to go play some pinball. Now you know everything I know, let's see if we can find a way for it to make us rich. good luck tom w ------------------------------------------------------------------------------- From: OWENTIME@delphi.com Subject: Re: [CANSLIM] "M" in CANSLIM Date: 29 Dec 1996 21:56:23 -0500 (EST) The GM earnings being so high seems interesting. I'd been told by some sources that GM was not as "ontop" of profits as they'd like to be but then again, this was the pre-strike posture and today, I'm sure it is quite easy for them to adjust from margin areas to pour on a good balance sheet for analysts. Analysts IMO are going to be the monkey wrench in this smooth flowing market. Growth was so accelerated by hi-tech combustability, that the further fuel of low interest rates and low infl. set a tone for momentum rarely experienced like this. So I think eps are so hyperextended that only the conservative postures for future growth will go unscathed, hence un axxed. In this volatility cycle which many people foresee; those quiet little small caps of a low profile may do well and those large caps that can play with their margins and produce profits seemingly out of nowhere (you'll see it with AT&T this year as they do well.) o the market may demand a serious maturation phase this year from investor and corporate structure alike to pull back to very traditional tennets of business profit growing expectations. My hunch is that the CANSLIM numbers will be important this year. ------------------------------------------------------------------------------- From: "Dean Edwards" Subject: Fw: [CANSLIM] "M" in CANSLIM Date: 30 Dec 1996 22:55:40 +1300 With your years of knowledge and experience in the stock market. What is your opinion regarding the volatility. 1) Is the volatility a good or bad thing? Is this a danger signal? Wall Street is like chess you have to think many moves ahead. For example, when the market is in a bullish state, a bearish piece of news may not have the slightest effect on the market. And I also understand how the market anticipates and discounts news well in advance. But I don't understand this phrase. 2) Bear comments on how the mkt, this past yr, was far more reactive to"events" Can you please explain what happens to the state (psychology) of the market when it is reacting to "events", is this a negative or positive for the market? ---------- > From: tom worley > To: CANSLIM > Subject: [CANSLIM] "M" in CANSLIM > Date: Monday, December 30, 1996 1:45 PM > > Once again, I address myself to the most difficult task of analyzing market > conditions overall. Tonight I am once again stealing from reports from Bear > Stearns that happen to make sense to me. First topic is volatility, > followed by comments on the tech industries and the restuarant group. > > VOLATILITY: Bear did a review thru 12/20 of the nr of days showing an > intraday swing (up or down) of 1% and 1.5% compared to the past ten years. > It found 98 and 38 such sessions for 96 compared to a ten year avg of 96 & > 37. What tends to make 96 seem so volatile is that it is way ahead of the > three prior years. The nrs for 93, 94 and 95 were 37/7; 67/17; and 44/5. > Bear comments on how the mkt, this past yr, was far more reactive to > "events" rather than anticipating and discounting those same events. > > > > > > > > > > > ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] "M" in CANSLIM Date: 30 Dec 1996 07:27:29 -0500 Apparently I snipped too much from the Bear reports I was quoting. The point Bear was trying to make, and I was trying to pass along, was first: 1996 was not as volatile as it felt and, second: the mkt failed to anticipate events, rather it reacted to them as they occurred (e.g.a knee jerk to each economic report or neg earnings surprise as if it implied the entire industry would be equally affected). The bottom line, according to Bear, is go back to the basics. Do the research, do the homework, have a plan and be prepared. Is volatility good? If you are a day or very short term trader, then yes. If you are trying to accumulate a position for long term then yes. If you are nervous or just uncomfortable with volatility, then no. In the latter case you are better off in a mutual fund where the diversification will smooth out some of the volatility. tom w ---------- > From: Dean Edwards > To: canslim@xmission.com > Subject: Fw: [CANSLIM] "M" in CANSLIM > Date: Monday, December 30, 1996 4:55 AM > > With your years of knowledge and experience in the stock market. What is > your opinion regarding the volatility. > > 1) Is the volatility a good or bad thing? Is this a danger signal? And I also understand how the market > anticipates and discounts news well in advance. > But I don't understand this phrase. > 2) Bear comments on how the mkt, this past yr, was far more reactive > to"events" > Can you please explain what happens to the state (psychology) of the market > when it is reacting to "events", is this a negative or positive for the > market? ------------------------------------------------------------------------------- From: Zoran Mitrovski Subject: [CANSLIM] Greetings from Macedonia Date: 30 Dec 1996 09:29:23 -0500 (EST) Hello everybody, I just logged in from Macedonia and I thought I'd say hi. I miss you all guys. It is 15 min before the market open today (mon). I just checked my SEMX and I was excited to see it closed at 17 1/2 Friday. I feel like selling now especially because the links from down here are not as good as I expected. Crappy and expensive. Or maybe I'llwait untill january to save on taxes and check a possible January effect perhaps pushing it a little bit higher. The move looks very strong on the close. I'm happy cause I'm closing the year with appr. 50% profit in 1.5 months. I know that it is impossible for this to continue like this but I'll do my best to try. Tom spoke about taxes and stuff. I admitt that I have not even started thinking about them. My thoughts were that I have to first make sure I can make a profit and then learn about taxes. It seems to be the time now. OK, I'm into a very happy holiday mood here and I wish you al a very successfull new year ahead. Cheers, Zoran ------------------------------------------------------------------------------- From: Johan Van Houtven Subject: [CANSLIM] SEMX tanks Date: 30 Dec 1996 22:07:34 +0100 SEMX down 6 3/4 to 10 5/8 x 11. The intradday high was 17 7/8! I did not sell. I'm holding and considering buying more at these levels. I think a buy between 10 and 11 will make me money over time. The news does not look TOO bad to me. Opinions? Here's the news: Monday December 30 1:33 PM EDT Semiconductor Packaging Materials Co. Announces That It Expects Fourth Quarter Results to be Below Analyst Expectations MAMARONECK, N.Y., Dec. 30 /PRNewswire/ -- Semiconductor Packaging Materials ("the Company") announced that it expects that its fourth quarter results will be below analysts' consensus expectations and that earnings for the fourth quarter will be below prior year levels. The Company said that its fourth quarter has been weak at several of its operations, including a decrease in orders for 8" silicon wafers which are reprocessed at its American Silicon Products Inc. ("ASP") subsidiary in Providence, Rhode Island. While ASP processed more silicon wafers in the fourth quarter than in the second and third quarters, its mix consisted largely of smaller diameter wafers which yield lower revenues and profitability. Gilbert D. Raker, Chairman of the Board, said, "We believe that we are seeing the 8" business beginning to recover. Our expectation is that revenues and earnings will begin to improve in the first quarter of 1997, and that in 1997, the Company will experience significant top and bottom line growth, particularly after the Company completes the acquisition of the assets of Silicon Materials Service and the stock of Silicon Materials Service, B.V. While we have experienced this setback and will not meet analysts' consensus expectations for the fourth quarter, we expect, barring an economic or business downturn in 1997, that our business prospects continue to remain strong." Semiconductor Packaging Materials Co., Inc. and its subsidiaries provide specialty materials and services to the microelectronic and semiconductor industries. SOURCE Semiconductor Packaging Materials, Inc. ------------------------------------------------------------------------------- From: "David F. Cameron" Subject: Re: [CANSLIM] SEMX tanks Date: 30 Dec 1996 17:04:55 CST This may not be a popular response, and I certainly am wrong quite often, but.... I just read Johan's message re:SEMX. If I were in it - I`d wait for a small bounce (will probably happen) - then sell. Usually when a stock drops that fast on news - it takes quite a while to come back. This is why O'Neil recommends getting out on an 8% drop. Of course I don't think that was POSSIBLE with SEMX. O'Neil's eternal optimism almost seems to discount this possibility. Another question though. Many out there seem to be referring to SEMX as a CANSLIM stock. Is that (was that?) technically true? I thought a CANSLIM stock had to be selling over 20. Do I remember wrong - or is that just a recommendation by O'Neil that is indep- endent of the method? I hope this doesn't ruin Zoran' vacation... Dave dcameron@harper.cc.il.us ------------------------------------------------------------------------------- From: "tom worley" Subject: [CANSLIM] Market comments, 12/30/96 Date: 30 Dec 1996 20:50:43 -0500 We had surprising volume today, looks like either the value shoppers returned early from vacation or there were a lot of last minute portfolio adjusters. NYSE did 343 mil shares, NASDAQ did 573 mil. New hi/low on NYSE good at 210 to 31, but terrible on NASDAQ at 172/204 altho it was worse earlier in the day. We would have had a new closing high on the Dow 30 were it not for a computer-driven (*&^*%$#@%$*&^) sell program with about 15 minutes to go. Damn, why can't they get them off the exchange and do them privately. Adv/dec was positive on NYSE (7:5), neg on NASDAQ (4:5), however NMS stocks were close to neutral, so there was a higher proportion of down stks amongst the small caps. Bond mkt was positive thru most of the day, then selling off at the close to close down a couple of ticks. Of the stocks I have been watching, performance by SEMX was the most spectacular. Sadly happened while I was out on a smoke break, so missed the initial plunge. My comments already posted on this one, however want to emphasize how this drop tracks with highly extended stocks even without such bad news. I have taken profits on many stocks that went vertical, and didn't mind when they kept going because I know the difficulty of calling a top, however temporary. If I have a stock move 40 or 50% out of a base in a week or so, I would rather take profits and look for another opportunity than trust it to keep moving straight up. If I really like the company, and it consolidates, bases out, and still has good CANSLIM nrs, then I may decide to buy it back in two or three months, but only if a fresh review still shows it as a top candidate to pick. Forget past history, even with a fast winner. Always start your review fresh, as if you have never heard of the co, much less owned it before. I have always emphatized the importance of a plan. In past several days, I have begun examining the charts of a nr of tech stocks I like, looking specifically at how they performed during the first week of Jan 96. By and large, in a rather casual survey, it looked like they were mostly flat, before beginning their advances of the first half of the year. If this holds true in 97, there will be ample time to buy without rushing in. On the other hand, I remain concerned about the lack of leadership. I see growing signs of the financial groups taking over the leadership role. Certainly the dropping long bond yield has something to do with this, and probably also the strong dollar, but I have never liked a mkt led by this group. The medical stocks appear to me to be doing the same, and my feelings are identical. I also remain concerned about the lack of participation by the small caps. After a brief rotation of money out of the large caps into the medium, and to some degree small, caps, it appears to have reversed back into the highly liquid large caps. Some of today's vol is credited to institutional based buy programs, which were mostly shopping for Dow 30 type stocks. I'm still a bull (or maybe just full of bull), but I am also not euphoric at this mkt, even tho I was proven wrong when I said I didn't expect any more records for 96. This mkt is just too choppy to be confident of the short term trend. It's possible we may have to get a week or so into the Q4 earnings reporting cycle (which will also take us thru the "preannouncements" which are invaribly bad) before this mkt can start showing some consistency. This forum has been pretty silent for awhile, I'll blame it on the holidays. But let's get some chatter going, I know you have opinions out there, share them, no one is right or wrong here, it's a DISCUSSION group. Much as I enjoy showboating and running off at the fingertips, I really do like hearing what everyone has to say. Believe me, even if I could do nothing but watch the mkt all day long, I would still miss a lot. We got about 200 members here, let's hear from them! good luck, and let's hope for an even better year in 1997. Happy New Year. tom w ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] SEMX tanks Date: 30 Dec 1996 20:13:44 -0500 First, I want to ref my comments in David's post, same subject. Second, the news is terrible. Co was forecast to show year over yr growth in profits, now Q4 will fall below last yr (which was 14 cents) putting it well below last two qtrs of 21 cents each. Once it is reported and cranked into the formula EPS will likely drop below 70, and I expect RS will go under 40, at least for awhile. Therefore, its viability as a CANSLIM is gone. I might add it will end up the yr ten cents or more under forecast. Third, as I mentioned in responding to David, I am concerned about the problems with wafer polishing. Fourth, and positive, is that it tumbled back into the area of the 50 dma and whatever base it had prior to such a sharp spike up. It held the 10.5 level despite heavy vol, so there does appear some support there, if it holds, then there could be a several pt play in it. BUT, if so, this is not CANSLIM, it is value shopping. The Q1 nrs won't be out for several months, and it now remains to be seen if the co forecast of improved revs and earnings bear out. Believe me, I watched this one all day, I never quite wrote the buy ticket, but I did pull up the chart on my computer as well as making a copy of the DG one to have on my desk. But right now, this is a falling knife, and you step back from falling knives and let them land unless you are really, really brave or like getting hurt. Fortunately, tomorrow is the last day to sell for tax purposes, so those who didn't get the word until after the close have another 19.5 hours to make a decision. Those who decide to hold thru tomorrow will likely wait and see if there is a Jan rally. Time will tell tom w ---------- > From: Johan Van Houtven > To: canslim@xmission.com > Subject: [CANSLIM] SEMX tanks > Date: Monday, December 30, 1996 4:07 PM > > SEMX down 6 3/4 to 10 5/8 x 11. The intradday high was 17 7/8! > > I did not sell. I'm holding and considering buying more at these levels. I > think a buy between 10 and 11 will make me money over time. > > The news does not look TOO bad to me. Opinions? > ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] SEMX tanks Date: 30 Dec 1996 19:58:41 -0500 Two comments, and thanks to Johan for posting the news release, saves me a lot of typing in tonite's "mkt comments". First, I agree, David. Could take a while to see a recovery. If this stock should bounce back into the 13 or 14 range and I owned it, I probably would cut and run. On the other hand, I looked at this stock last week and, if you remember, one of my comments was that it was very extended. Another was the 1.8 u/d ratio, and a third was the latest report showing 1% fund ownership, but with high recent vol suspected this was no longer the case. I also noted the small float of 4.0 mil shares, which makes today's vol of 1.55 mil shares all the more remarkable. Bottom line, I think the mm ran it up from the 11 dollar base, and today crashed it right back. Second, as to being a CANSLIM, yes the nrs were very impressive. Chart was not, definitely very extended coming out of a base back at the 11 level with the 50 dma about 11 and 200 dma even lower. What is significant about today's move is it looks to have held the m/a lines, at least for the moment. Of concern to me is this is the second qtr with problems with their wafer polishing operations. I wonder whether we have heard the entire story on this issue. Encouraging are mngmt's comments on increasing revenues in 97 starting with q1. Also, as a comment on being a CANSLIM, I hear O'Neill added it as a buy in the 16 and change level, so he liked it despite being extended. Goes to show that every rule can't always apply, and no one, without inside info, can dodge a bullet like this one. Hell, it wasn't even trading at an excessive PE. As to a $20 criteria, that's the first I have heard it mentioned. I know WON usually doesn't look at a stock below $12, because his primary clients are institutional/fund based, and they won't consider a lower priced stock. But I have seen buy recs that were under this level. ---------- > From: David F. Cameron > To: canslim@xmission.com > Subject: Re: [CANSLIM] SEMX tanks > Date: Monday, December 30, 1996 6:04 PM > > I just read Johan's message re:SEMX. If I were in it - I`d wait for > a small bounce (will probably happen) - then sell. Usually when > a stock drops that fast on news - it takes quite a while to come back. > > Another question though. Many out there seem to be referring to > SEMX as a CANSLIM stock. Is that (was that?) technically true? > I thought a CANSLIM stock had to be selling over 20. ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] Greetings from Macedonia Date: 30 Dec 1996 19:44:53 -0500 I'm sorry SEMX's Friday's close got you so excited, tough time to be out of touch. Today's new high wiped out by the bad news. More comments in my mkt comment tonite. I'm not a tax expert, altho considering taking part time job with H&R Block, at least for next few months. But I have done my own taxes for over 30 yrs with only one audit, and that one didn't change a penny. With that proviso, if I can help, ask away. The advice is worth what you are paying, anyway. tom w ---------- > From: Zoran Mitrovski > To: canslim@xmission.com > Cc: Zoran Mitrovski > Subject: [CANSLIM] Greetings from Macedonia > Date: Monday, December 30, 1996 9:29 AM > I just checked my > SEMX and I was excited to see it closed at 17 1/2 Friday. > I feel like selling now especially because the links from > down here are not as good as I expected. Crappy and > expensive. Or maybe I'llwait untill january to save on > taxes and check a possible January effect perhaps > pushing it a little bit higher. The move looks very > strong on the close. > > Tom spoke about taxes and stuff. I admitt that I have not > even started thinking about them. ------------------------------------------------------------------------------- From: "tom worley" Subject: [CANSLIM] Any accountants/CPA types out there? Date: 30 Dec 1996 21:06:02 -0500 Need help understanding an accounting issue. I have a stock where co has about $13 mil in NOL c/f. Their auditors have decided their earnings stream is now consistent to where they must book the asset value of this tax w/o. As I understand it, this will be a non-cash event, but will still mean recording income of about $1.00 a share over what they actually earned (approx 45 cents compared to 26 cents a year ago). I am confused, first because I thought they could carry this loss and just keep writing it off against current profits as a tax avoidance method, and second as to how the mkt will react. Obviously it is a one time event, but if I am having trouble understanding it, how will the mkt treat it? Any thoughts, opinions, advice, on how to understand this? They will likely report in the next several days to a week so my time frame is short on whether to add to my position or take profits if it runs up any further. Also, if I understand this correctly, at a minimum it increases the shareholder equity by this $1.00/share, raising book to over half of the current price. Is this correct, does this also impact the s/h equity? thanks for any help. tom w ------------------------------------------------------------------------------- From: "Richard S." Subject: Re: [CANSLIM] SEMX tanks Date: 30 Dec 1996 23:49:56 -0600 I think the figure is 12.00 << Richard S. >> ---------- : From: David F. Cameron : To: canslim@xmission.com : Subject: Re: [CANSLIM] SEMX tanks : Date: Monday, December 30, 1996 5:04 PM : : This may not be a popular response, and I certainly am wrong quite : often, but.... : : Another question though. Many out there seem to be referring to : SEMX as a CANSLIM stock. Is that (was that?) technically true? : I thought a CANSLIM stock had to be selling over 20. Do I remember : wrong - or is that just a recommendation by O'Neil that is indep- : endent of the method? : : I hope this doesn't ruin Zoran' vacation... : : : Dave : dcameron@harper.cc.il.us ------------------------------------------------------------------------------- From: "Richard S." Subject: Re: [CANSLIM] SEMX tanks Date: 31 Dec 1996 00:01:30 -0600 This is strickly a newbie opinion, so its worth what you paid for it. Several thoughts come to mind,,, Never buy on the down turn. Never throw good money after bad. What happened to your stops? If you looked at it as if it was the first time you ever saw it, would you buy still buy? If you bought an amount equal to what you already have, its going to have to go up 6 points for you to reach a break even point on the total holdings. How many good buys will you have to pass on while this money is tied up waiting to break even? My personal experience with situations like this, ie, CLE,CPU,ATCT,IOM has been that they never recovered completely. I'm so gun shy of situations like this, I'd have to give strong consideration to selling at market and cutting my losses. On the other hand, what do I know? :) << Richard S. >> ---------- : From: Johan Van Houtven : To: canslim@xmission.com : Subject: [CANSLIM] SEMX tanks : Date: Monday, December 30, 1996 3:07 PM : : SEMX down 6 3/4 to 10 5/8 x 11. The intradday high was 17 7/8! : : I did not sell. I'm holding and considering buying more at these levels. I : think a buy between 10 and 11 will make me money over time. : : The news does not look TOO bad to me. Opinions? : : Here's the news: : : : Monday December 30 1:33 PM EDT : : Semiconductor Packaging Materials Co. Announces That It Expects : Fourth Quarter Results to be Below Analyst Expectations : : MAMARONECK, N.Y., Dec. 30 /PRNewswire/ -- Semiconductor Packaging Materials : ("the Company") announced : that it expects that its fourth quarter results will be below analysts' : consensus expectations and that earnings for the : fourth quarter will be below prior year levels. The Company said that its : fourth quarter has been weak at several of its : operations, including a decrease in orders for 8" silicon wafers which are : reprocessed at its American Silicon Products : Inc. ("ASP") subsidiary in Providence, Rhode Island. While ASP processed : more silicon wafers in the fourth quarter : than in the second and third quarters, its mix consisted largely of smaller : diameter wafers which yield lower revenues : and profitability. : : Gilbert D. Raker, Chairman of the Board, said, "We believe that we are : seeing the 8" business beginning to recover. : Our expectation is that revenues and earnings will begin to improve in the : first quarter of 1997, and that in 1997, the : Company will experience significant top and bottom line growth, particularly : after the Company completes the : acquisition of the assets of Silicon Materials Service and the stock of : Silicon Materials Service, B.V. While we have : experienced this setback and will not meet analysts' consensus expectations : for the fourth quarter, we expect, barring : an economic or business downturn in 1997, that our business prospects : continue to remain strong." : : Semiconductor Packaging Materials Co., Inc. and its subsidiaries provide : specialty materials and services to the : microelectronic and semiconductor industries. SOURCE Semiconductor Packaging : Materials, Inc. : ------------------------------------------------------------------------------- From: Johan Van Houtven Subject: Re: [CANSLIM] Market comments, 12/30/96 Date: 31 Dec 1996 12:11:13 +0100 Tom, >Of the stocks I have been watching, performance by SEMX was the most >spectacular. :^) You surely weren't watching UCMP, TRSI, ZITL then, I guess? Most amazing and spectacular intraday spreads I have ever seen. Very existing to watch. I would not touch these things however. >We got >about 200 members here, let's hear from them! I second that. Take an example guys/gals to me. I know nothing, nevertheless I'm writing. Live and learn is my moto. >good luck, and let's hope for an even better year in 1997. Happy New Year. I second that (again). :^) ------------------------------------------------------------------------------- From: Johan Van Houtven Subject: Re: [CANSLIM] SEMX tanks Date: 31 Dec 1996 12:11:17 +0100 Richard wrote: >This is strickly a newbie opinion, so its worth what you paid for it. > >Several thoughts come to mind,,, > >Never buy on the down turn. Absolutely. >Never throw good money after bad. Idem. >What happened to your stops? Stock halted at about 17 then reopened at 12. Stops do not help in this case. >If you looked at it as if it was the first time you ever saw it, would you >buy still buy? Deinately not at this moment! There are a lot of other good stocks out there. (If only I knew which ones... ;^) >If you bought an amount equal to what you already have, its going to have >to go up 6 points >for you to reach a break even point on the total holdings. Not correct since I'm in at 13 7/8. But I understand what you are getting at and you are right. >How many good >buys will you have to >pass on while this money is tied up waiting to break even? Another good question. That's why I'm looking at getting out in the next week or so with a minimum of losses. My initial reaction in my msg you quoted was wrong (in CANSLIM terms). >My personal experience with situations like this, ie, CLE,CPU,ATCT,IOM has >been that they never >recovered completely. Never say 'never'. But I know what you mean. They do not reover fast enough. >I'm so gun shy of situations like this, I'd have to give strong >consideration to selling at market and cutting my losses. > >On the other hand, what do I know? :) All your remarks are very wise. O'Niel's could not have said it better. Thank you for sharing your wise words. I'd encourage other beginners like me to print them out and read them every time they encounter a situation like this. ------------------------------------------------------------------------------- From: Johan Van Houtven Subject: Re: [CANSLIM] SEMX tanks Date: 31 Dec 1996 12:11:03 +0100 David, >This may not be a popular response, and I certainly am wrong quite >often, but.... We are not running a popularity contest here, or are we? ;^) The truth has to be told. We have to face the good and the bad news. >I just read Johan's message re:SEMX. If I were in it - I`d wait for >a small bounce (will probably happen) - then sell. This is what I hope will happen in the next few days. Might not happen today 12/31, because MM might keep it down so people can do some tax loss selling. I do plan on selling however. No point in letting the remaining money sit there and do nothing. My MRII is breakout, so maybe I'll put it in that. >Usually when >a stock drops that fast on news - it takes quite a while to come back. >This is why O'Neil recommends getting out on an 8% drop. Of course >I don't think that was POSSIBLE with SEMX. O'Neil's eternal optimism >almost seems to discount this possibility. It halted at about 17 and then reopend at 12. A stop loss would not have helped that much. >Another question though. Many out there seem to be referring to >SEMX as a CANSLIM stock. Is that (was that?) technically true? >I thought a CANSLIM stock had to be selling over 20. Do I remember >wrong - or is that just a recommendation by O'Neil that is indep- >endent of the method? If that is so I do not have any CANSLIM stocks. :-) Well, maybe APCC could qualify as one. >I hope this doesn't ruin Zoran' vacation... I hope Zoran sold in the morning, as I seem to remember he said he would sell. BTW, this is the risk you take when buying fast growers, fast movers. They will tank fast if there is any bad news. I wonder if they [SEMX] will clarify the news release. Exactly how bad will this Q be? And what about the Qs after that. Shareholders who'd like to ask questions can reach them at: spm@sempck.com People who want to look at another example: look at Celeritek [CLTK]. ------------------------------------------------------------------------------- From: "fjsabour" Subject: [CANSLIM] Curative Health Date: 31 Dec 1996 09:35:44 -0800 Anybody watching CURE ? Seems like health stocks are becoming popular again. Words of wisdom? Fred ------------------------------------------------------------------------------- From: Dave Finley Subject: Re: [CANSLIM] Stock Market and Stock Pick Date: 31 Dec 1996 16:51:26 -0500 Tom, In the following post from a couple of weeks back, you referred to O'Neil's CANSLIM picks. Are these posted or publicly available?? Just looking to shorten the list a bit, and if I can do so with with a cut of his caliber, so much the better... Meanwhile, a happy (and prosperous) new year to all! Dave F. At 09:01 PM 12/19/96 -0500, you wrote: >I'm not aware of a particular ratio, rather O'Neill's concept is to limit >your losses and maximize your gains by using stops to prevent large losses >and technical analysis to know when to hold your winners rather than taking >that tempting profit. By this method, he is able to substantially >outperform the S&P with his NSMI stocks (in Aug he was up over 700% >compared to S&P up 119%). In theory, he holds his winners till the gains >are infinite, while still protecting against a major pullback. The best >year I saw O'Neill's NSMI picks were up 100% while S&P was up about 30 some >% (as I recall). If I had to guess, I would think a good year is where he >doubles the S&P performance, a bearish year is where he does about the >same. > >tom w > >---------- >> From: Martin Connor 575-6279 >> To: canslim@xmission.com >> Subject: Re: [CANSLIM] Stock Market and Stock Pick >> Date: Thursday, December 19, 1996 10:58 AM >> >> >> > "Dean Edwards" wrote... >> > >> > In the currency market you don't risk your money >> > unless the reward ratio is 3/1. >> > >> >> As the consumate lurker, I reluctantly emerge from mailbox, >> so here goes my first CANSLIM post: >> >> How does CANSLIM deal with the concept of "reward ratio"? >> Presumably if you are doing CANSLIM, you are minimizing risk, >> and maximizing reward. Soooo... can CANSLIM be rolled up into >> a single number (perhaps a reward ratio) so that you could rank >> equities accordingly? >> >> >> Regards and Best Wishes for the Holidays, >> >> Martin Connor >> >> >> >> bio: Like to trade stocks on cycles. >> Read O'Neal's book this year, need to read again, and again... >> Use Metastock 5.11 for data gathering and analysis. >> Love Tech stocks. >> Love Volatility. >> Love Bull markets. >> My most consistent and reliable trading system: >> "Buy High, Sell Low, and Take the Write-Off." >> > ------------------------------------------------------------------------------- From: "John Iding" Subject: [CANSLIM] Re: Happy New Year to All Date: 31 Dec 1996 14:18:10 -0800 Best Wishes for the New Year to all in this group .... John ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] SEMX tanks Date: 31 Dec 1996 18:53:12 -0500 An excellent suggestion, and not just for beginners. Even experienced investors make mistakes (or choose consciously or unconsciously to forget/ignore our painfully learned experiences in the past). I would add to this trying to set aside the time to read O'Neill's book at least every quarter, if not every month. tom w ---------- > From: Johan Van Houtven > To: canslim@xmission.com > Subject: Re: [CANSLIM] SEMX tanks > Date: Tuesday, December 31, 1996 6:11 AM > > Thank you for sharing your wise words. I'd encourage other beginners like me > to print them out and read them every time they encounter a situation like this. > ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] SEMX tanks Date: 31 Dec 1996 18:47:09 -0500 I meant what I said, a rally in SEMX. Several reasons, first so far it held its only true recent base after being EXTREMELY extended, as I previously mentioned. Second, unless problems are sig greater than the co has admitted (e.g. wafer polishing, quality control, and/or other product lines not yet mentioned) then Q1 is supposed to start showing an improved top and bottom line. Third, the trailing PE was not that high before the collapse, and is actually very low now with the expected growth, so a continuing mkt, if the techs resume leadership, will make SEMX very attractive to the value based investors at a minimum. Even some of the funds, which tend to look long term, may venture back in. And, of course I didn't know this when I sent the orig comments, it traded pretty nicely today, closing up along with NASDAQ. PMSI - offhand, no opinion, would have to review. happy new year, anyway. tom ---------- > From: Johan Van Houtven > To: canslim@xmission.com > Subject: Re: [CANSLIM] SEMX tanks > Date: Tuesday, December 31, 1996 6:11 AM > > >tomorrow is the last day to sell for tax purposes, so those who didn't get > >the word until after the close have another 19.5 hours to make a decision. > >Those who decide to hold thru tomorrow will likely wait and see if there is > >a Jan rally. > > You did not mean a rally in SEMX did you? That would be HIGHLY unlikely IMHO. > > A ralley in some of the laggards of 1996, yes. What about PMSI for example? > Is that a candidate? > ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] Stock Market and Stock Pick Date: 31 Dec 1996 19:05:47 -0500 Sorry, Dave, not any longer. At one time all his services, data base pubs, etc. were available for a fee. Unfortunately, too many retail level recommendations to retail clients were being "touted" (if that's a fair word) as an "O'Neill" instead of a result of the broker's diligence and hard work looking for good opportunities. As a result, when some of them backfired (or the broker simply misread it or played it wrong or did it for a client not suitable for hi growth stocks), complaints were made and some ended up at O'Neill's doorstep. Since his business then was primarily institutional (for example, some of the funds and money mgrs do their trades thru him, and their commissions count directly against the annual fees for his svcs which can run over $100,000), and he had been ruluctantly talked into the retail sector anyway, he elected to terminate all retail clients, which included some very respectable wire houses as well as small firms. The only access I know of now is if you have a large portfolio, probably over $1 mil, then you can turn it over to one of his money mgrs/acct exec types. While most of the trades will be O'Neill/CANSLIM, they do have some discretion to do their own picks as well. tom w ---------- > From: Dave Finley > To: canslim@xmission.com > Subject: Re: [CANSLIM] Stock Market and Stock Pick > Date: Tuesday, December 31, 1996 4:51 PM > > Tom, > > In the following post from a couple of weeks back, you referred to O'Neil's > CANSLIM picks. Are these posted or publicly available ------------------------------------------------------------------------------- From: Jeff Beckham Subject: Re: [CANSLIM] SEMX tanks Date: 31 Dec 1996 19:01:37 -0700 ><< Richard S. >>wrote: >My personal experience with situations like this, ie, CLE,CPU,ATCT,IOM has >been that they never >recovered completely. > >I'm so gun shy of situations like this, I'd have to give strong >consideration to selling at market and cutting my losses. > >On the other hand, what do I know? :) I know of of couple of guys in this group who got a good lesson similar to this one last year on FTP Software. It was a good CANSLIM candidate, then reported it would miss earnings. The stock gapped down from the low 30's to open at around $12, completely missing any stops in place. My holdings sold at the $12 level, and I must say I was very tempted to immediately buy it back. I didn't though and was glad I didn't as the stock then continued to lag all the way down to $6. If I would have rebought or held on to this stock I would have lost another 50%. This made me a strong believer in taking your money out of a stock whose fundamentals have changed and finding another stock. Hopefully ------------------------------------------------------------------------------- From: "tom worley" Subject: [CANSLIM] Final Market Comments Dec 31, 1996 Date: 31 Dec 1996 23:26:29 -0500 FINAL COMMENTS ON THE STOCK MARKET Well, this will be my last posting to comment on the behaviour of the market, and hopefully challenge your thinking when assessing the "M" in CANSLIM. Just kidding, I meant for 1996! Today was another eventful and interesting day. While no big move was anticipated, and we did in fact start off reasonably flat, (altho the Australian and New Zealand mkts had good days among others), the major events was the announcements of new housing sales and consumer confidence nrs. Housing was up over 14% (with a plus two expected) altho there was a large adjustment in the prior month report which accounted for a major part of this shift. Consumer confidence also came in higher, over 113, I think, suggesting the euphoria ain't over till its over. These two inflationary signals combined on what should normally be a light day to send the bond mkt tumbling, and the equity mkt after it. Even with a shortened bond session, the long bond closed down a full point and ten ticks, about a ten basis pt increase (about a tenth of a percent increase in rates to you uninitiated ones). The stock mkt, after dropping to the minus 30 -40 level, appeared to be trying to rally and was cut short, I suspect, by those @#*&$% computer driven sell programs. Towards the end of a full session, I reached a point of stupidity where, 3 minutes after the close and waiting for the final official nrs, while down 98.42 pts, I started rooting for one more late downtick in a DOW 30. I mean, after all, if we are to finish the year on such a bloodbath, why not make it an even hundred pts. After all, being down 98 is only worth 5 minutes or so of news, but 100 points?!! That's an event, esp on the final day. Finally, in a last gasp of effort, we did it! Scored one for the Zapper! A last downtick, closing down 101.10 (hummm, those are all binary nrs, and the computer stocks HAD started back, and the tech loaded NASDAQ had been rallying since early afternoon on huge vol, and actually closed up several pts instead of the down 20 or so to be in line with the DOW 30, I wonder if this is a sign for 1997???) HEY, if Elaine can call a CRASH just as a summer doldrums correction ENDS and the mkt starts setting NEW RECORDS, AND STILL BE BELIEVED, then I can find signals in trivia! I think I'm getting to like this market commentator stuff, wonder what's it like to do it for a living? Anyway, for once I am most impressed with the NASDAQ performance. Today may have marked a sig turn/reversal in the short term trend. Vol esp impressive, almost 680 mil shares trading. This is close to a record, and on a traditionally light day yet. New hi/low was quite negative at noon, but closed the gap all afternoon and, again in a late burst of strength and agility, finished up with 201 new highs to 197 lows. Advance/decline even better at a 3:2 ratio, best of the day. Up/down vol was 7:5. The vol alone tells me a lot of money was starting to flow back in, the only neg was that it wasn't flowing into the techs as much as other areas. Of note tho, it also didn't seem to be going for the financials. And even on NYSE, despite a 101.10 pt loss (still all binary), there were actually more stocks up than down (1283 to 1237) (most unusual) with a very strong hi/low ratio (194:35) (also unusual for such a large pt drop) altho a lot of these highs were admittedly set in the AM prior to the two economic reports. This was one difference with NASDAQ, where the highs were being set in the PM. On the other hand, NYSE vol was a 3:2 neg ratio. Vol there was high, again esp for a "light" day, over 400 mil shares changing hands. A LITTLE HISTORICAL PERSPECTIVE - WHERE DID THE MARKET CLOSE LAST TWO YEARS? NYSE - 12/30/94 - 3834.44, VOL 67M 12/29/95 - 5117.12, VOL 78M 12/31/96 - 6448.27, VOL 401M NASDAQ - 12/30/94 - 752.0 12/29/95 - 1052.0 12/31/96 - 1291.0 A little personal historical perspective - 20 years ago I was sitting at my home in California teaching myself to write a computer program in a house version of Fortran which was an early version of data base mngmt/report generation. It ended up slicker than sliced bread, razzled and dazzled, and made my boss US Coast Guard) look good. Now, this wasn't part of my job, nor was I trained for it, so it was done almost entirely on my own, using a portable computer (understand in 1976 this actually was a typewriter with attached modem, hooked up to a computer center in NJ). Of course, since I was military, there was no such thing as overtime either. The point of this was that this primitive computing device used an acoustic coupler (most of you probably don't even know what I am talking about unless you like REALLY old movies, but it is this rubber gadget that you shove your telephone handset into) to connect the modem up and run AT 300 BAUD rate. yeah, you heard me right. Back in those "good ole days", the idea of a laptop complete with battery power, cellular phone hookup, and baud rates of 14,400 or higher had not even been thought of. Don't even mention the storage capacity or computing rates of today's chips. In 1983, I came to Miami with the Coast Guard, and among other tasks, since I was a little more computer literate than everyone else, I maintained a local network of seven stations operated by a primary workstation with a GRAND TOTAL of 20 megs of storage. And believe me, we ran a huge data base. My twice a month backups and restores took over four hours because I backed up to floppy disks. No, not those cute 5 inch ones so popular a few year ago, nor those really neat baby ones that hold 1.44 megs, these were 12 inch discs, and it took a lot of them. In my three years running this network, I was eventually able to get funding to upgrade to 40 megs of storage and ACTUALLY GOT A TAPE DRIVE JUST FOR BACKUPS. Of course, it was a cabinet the size of a file cabinet, and used open faced reels of tape, but it cut my backup/restore operation time in half and also allowed me to do other work during those two hours the system had to be down. Now, I realize this description of computer equipment makes me sound even older than I am, but my point is that this last situation was only ten years ago. Now we are casually talking about laptops, and storage drives with multible gigabit capacity, and modems at 56 kps already being outdated. I am still trying to figure out this click and point (or is it point and click, never can get it right) technology that is already commonplace. How can I not share with William O'Neill his entrepreneural attitude on our nation, our economy, our industry, and our future? How can this not be reflected in our stock market? With the above historical perspective, I think I will ride this "aging bull" a while longer (yeah, you're right, this bull is aging about as fast as I am, and I'm not retreating just yet). To the best of my knowledge and experience, never before in history have we enjoyed such a combination of factors including low unemployment, low inflation, low interest rates, strong dollar (currently at a four year high), mostly worldwide peace, stable or decreasing defense-industrial requirements with a consequent investment in other industries, mostly stable commodities prices, and a slowly growing world economy as well. I would like to close out 1996 on a political note. The absolute greatest danger the United States faces today is not crime or drugs, as bad a situation as they are. Our biggest risk is our national debt. It has taken over five years just to wake the public up to the problem of deficit spending, and we are still years from stopping that. Meanwhile the nat'l debt just keeps growing. The amount of money spent every month to service the debt is considerably greater than that month's budget deficit. If we had no debt, we would have that extremely rare commodity, a budget surplus, without any cuts in current spending levels. With a budget surplus, we could talk about a tax cut, it would be legitimate then. We could put more money into education to prepare future generations for the highly advanced, extremely technological world in which they will operate. We could be creating more jobs, and not just service jobs either. We could be rebuilding the infrastructure of this country, rebuilding the highways of the interstate system that were being originally constructed when I was a kid, and have been poorly maintained since. But until we tell our politicians at the federal level that enough is enough, no more spending without responsibility, no more porkbarrel, no more unnecessary programs, and no tax cuts unless it is used to directly lower the nat'l debt, we cannot and will not move closer to this possibility. Rather, each day takes us further away. As individuals, we must each live within our economic means. I have had to make radical cuts in expenses since the death of my wife and the loss of her income. Why should our politicians be any different in spending OUR taxdollars? Well, it's just about time for the last of the fireworks. This past year has been an experience for me both personally and professionally. The death of my wife naturally overshadowed everything else, but slowly I am still dealing with it. On the bright side was a former client giving me this computer, and allowing me to experience once again the joy and fun of electronics and computing. I am still in awe of the quality of color graphics, I am just too used to monochrome. Six months ago, I had never "surfed the net", much less had any idea of how to send an email around the world. Now look at me. May 1997 be a happy and healthy year for each and every one of you, as well as your family and friends, even if they are not a CANSLIMer. God bless and stay healthy. tom w Happy New Year ------------------------------------------------------------------------------- From: "tom worley" Subject: Re: [CANSLIM] SEMX tanks Date: 31 Dec 1996 23:51:50 -0500 Good point, but each case must be examined individually, esp when a huge gap down takes you so far past a "theoretical" stop loss nr (obviously if you were using real stops, you were already shellaced, so this discussion doesn't help). In the case of FTSP, it ran up on expectations of the success (understand fad) of its in-line roller blades. Yeah, its product was apparently good, yeah it was taking mkt share from its leading competitor, and yeah expectations were too euphoric (to quote Greenspan). When it failed to deliver on rev and earnings expectations, it wasn't a case of business displaced from qtr to qtr, nor did it have a base to fall back into, it went an awful long time with no consolidation. It was also at a very high PE if my fading memory serves me right. A more recent example is RIDE, the snowboard mfr. Last year's fad is apparently this year's dud, which is the danger of riding a fad stock. Another example is Zytel, the year 2000 stock, talk about volatile! Truth is, without fundamental business and steady and increasing growth, you fall far faster than you rise. However, if the fundamentals are good and still in place and you can afford to tie up the capital for several more weeks or months, then value at least can return some sanity to the market place and see at least some recovery. This probably happens less than half the time, but if a severe gap down has already killed your position, you may as well take the time and examine the fundamentals. A little patience may mitigate the damage, and it is no sin to become a value player for a few weeks, just don't make it a permanent process. When you do this remember you are trying to "rescue" a position, don't get greedy if you get back close to your breakeven point. If you do hold a losing position that starts to rally, look at it from the price and situation level where you decided to hold (or even average down) vice taking the loss. Don't look at it from where you first bot it. Obviously, you would not likely have bot it post-bad-news. But if you do hold it post-bad-news, then handle it accordingly. tom w ---------- > From: Jeff Beckham > To: canslim@xmission.com > Subject: Re: [CANSLIM] SEMX tanks > Date: Tuesday, December 31, 1996 9:01 PM > > ><< Richard S. >>wrote: > > >My personal experience with situations like this, ie, CLE,CPU,ATCT,IOM has > >been that they never > >recovered completely. > > > >I'm so gun shy of situations like this, I'd have to give strong > >consideration to selling at market and cutting my losses. > I know of of couple of guys in this group who got a good lesson similar to > this one last year on FTP Software. It was a good CANSLIM candidate, then > reported it would miss earnings. The stock gapped down from the low 30's to > open at around $12, completely missing any stops in place. My holdings sold > at the $12 level, and I must say I was very tempted to immediately buy it > back. I didn't though and was glad I didn't as the stock then continued to > lag all the way down to $6 ------------------------------------------------------------------------------- From: "Richard S." Subject: Re: [CANSLIM] SEMX tanks Date: 31 Dec 1996 23:42:56 -0600 I too am a beginner, at least compared to some in this group. I wish my words were my own, gained from successful experience, but alas, most of them are from others including O'Neill. But, what the heck, I figure that if I can remember them well enough to pass them on to others, then they will be with me when I need them. I too have a file of "words of wisdom" gained from this group, and I review it when I have situations I am pondering. Best of luck in 97 to all in this group, if we follow our rules and the 'gems' of knowledge and experience we have passed on to each other, then it has the potential to be a good investing year. : >On the other hand, what do I know? :) : : All your remarks are very wise. O'Niel's could not have said it better. : : Thank you for sharing your wise words. I'd encourage other beginners like me : to print them out and read them every time they encounter a situation like this. : :