From: canslim-owner@xmission.com (canslim Digest) To: canslim-digest@xmission.com Subject: canslim Digest V1 #184 Reply-To: canslim@xmission.com Sender: canslim-owner@xmission.com Errors-To: canslim-owner@xmission.com Precedence: canslim Digest Tuesday, May 27 1997 Volume 01 : Number 184 In this issue: Re: [CANSLIM] intro Sam Funchess [CANSLIM] Size of the group Re: [CANSLIM] Cups w/handles vs LL to UR graph shapes Re: [CANSLIM] Cups w/handles vs LL to UR graph shapes Re: [CANSLIM] intro Sam Funchess Re: [CANSLIM] Fw: High EPS/RS Stocks [CANSLIM] Re: [Charts showing 10,50,100 dma) Re: [CANSLIM] intro Sam Funchess Re: [CANSLIM] Fw: High EPS/RS Stocks Re: [CANSLIM] intro Sam Funchess [CANSLIM] Avoiding Pitfalls [CANSLIM] ROFL Re: [CANSLIM] Cups w/handles vs LL to UR graph shapes Re: [CANSLIM] ROFL Re: [CANSLIM] Cups w/handles vs LL to UR graph shapes Re: [CANSLIM] intro Sam Funchess [CANSLIM] Breakout AMN See the end of the digest for information on subscribing to the canslim or canslim-digest mailing lists and on how to retrieve back issues. ---------------------------------------------------------------------- Date: Mon, 26 May 1997 11:36:26 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] intro Sam Funchess Welcome Sam, I would suggest you take advantage of the ongoing beta testing of IBD's Daily Graphs at http://www.dailygraphs.com, they require billing type info but I understand they are only sending "dummy" invoices till they go official in July sometime. One drawback is that you need a WIN95 type platform, but if you got that then it's a great free (for now) service to supplement IBD. Also it helps if you include in your intro something about your investing experience and professional background. Never know when we may call on you for some technical advice about an industry or stock. tom w Any statements or opinions are strictly my own and not that of my employer. My comments should not be intrepreted as a recommendation of any kind. I am a licensed (inactive) broker and an active investor. All investors should do their own research prior to any investment, especially one learned about on the Internet. - ---------- > From: Sam Funchess > To: Can Slim > Subject: [CANSLIM] intro Sam Funchess > Date: Monday, May 26, 1997 12:54 PM > > First day. I hope to learn alot from everybody. Can anyone give me some > pointers on first time uses of canslim. I have read the book and get > IBD. Is there any thing that one would recommend, so that I can avoid > the first time pitfalls you have experienced? > Thanks Sam > coach@spyder.net ------------------------------ Date: Mon, 26 May 1997 11:53:25 -0400 From: "Tom Worley" Subject: [CANSLIM] Size of the group Don't know how many may have noticed, but our group has grown substantially since the last time I checked with majordomo. Current list shows 148 on the regular list and 136 on the digest list. Don't think I have seen anywhere near that number of "intros" from new members, so will ask all who have not posted an introduction yet to do so. It's voluntary, you can still lurk without it, but nice for everyone to hear from new members regarding their investment experience and professional background. tom w Any statements or opinions are strictly my own and not that of my employer. My comments should not be intrepreted as a recommendation of any kind. I am a licensed (inactive) broker and an active investor. All investors should do their own research prior to any investment, especially one learned about on the Internet. ------------------------------ Date: Mon, 26 May 1997 11:02:09 -0500 From: "Brenda" Subject: Re: [CANSLIM] Cups w/handles vs LL to UR graph shapes Support Levels: Got other things to do so this will be the last defense of the LL to UR chart pattern. First for every proper break out with a proper formed cup w/ handle (If I can find a proper LL to UR - and if I can it'll take about 5 seconds for I'll already have it) the success failure ratio is staggering. Where did you say the support level was on TRID. How about CAMP? I can name about 100 more but will not bore or gore you with the blood bath stories. My stock has NO overhead supply/resistance to go through. Mine has inertia. STRONG inertia while yours is "trying/attempting" to form some sort of rally and "break" a past trend. To "think" you have picked the exact time, pivot point, entry point that this stock has done so is fooling yourself. Of course, there is a "tendancy" to want to break the past mold and or trend or all those who bought the stock as it began it's journey up the right side would not have done so. There are still those who missed getting out before it FELL and some will be getting out. We all know this story and scenerio. Now as to a support level for the LL to UR - on my graph its a very definite and pronouced RED line. That's the ten day moving average line. Should this stock break this line it will most likely go to my yellow line. Thats the 50 day moving average. MOST (85% or better) will hold here IF they break the ten day. Should they break this line, odds are good they will go to my purple line, the 100 day moving average. From here there really is no other line for me. If I sold all stocks that broke the 10 day line it would probably work out. Never tested it. It would CERTAINLY be advantageous to sell those that break the 50 day. The only problem with this "has been" that so many that break the 50 day only do it one to three days and then begin moving right back up. Have lived this one and usually get out of the ones that start coming back right before they do and tend to stay in the ones that keep going down. (Thats the reason for the MANDATORY stop loss). Keeps me from thinking I'm so brilliant. Every time I get to the point that I "think" I so brilliant the market teaches me otherwise. As long as I stick to basically following the lead, "listening to what the market (stock) is telling me" and don't try to interject my brilliance, feelings or anticipations" I do much better. As long as I am NOT greedy but willing to take what is being FREELY offered and GIVEN to me on a silver platter I do well. So, for me, I will use ALL of the CANSLIM approach except for the fact that assumes that a struggling stock, just emerging from troubles will outperform one SHINING and shining brightly and brilliantly. James - ---------- > From: Tom Worley > To: canslim@mail.xmission.com > Subject: Re: [CANSLIM] Cups w/handles vs LL to UR graph shapes > Date: Sunday, May 25, 1997 7:09 PM > > James, I can't argue that a stock with a consistent upward trend, > with minimum volatility, offers an opportunity to "board the train > at any station and make money" (long as we are going to use > analogies!). > However, the reason the c&h chart formation is considered so > powerful compared to a number of other also successful patterns > (including your LL/UR) is that it reduces the downside risk. A > properly formed pattern offers a reasonably clear entry point, > where an 8% stop loss will normally protect you but never be used. > A LL/UR works, so long as it works, but when it doesn't, there is > not likely to be any nearby support, and it can reverse with a > vengence. > > tom w > > Any statements or opinions are strictly my own and not that of my > employer. My comments should not be intrepreted as a recommendation > of any kind. I am a licensed (inactive) broker and an active > investor. All investors should do their own research prior to any > investment, especially one learned about on the Internet. > > ---------- > > From: Brenda > > To: canslim > > Subject: [CANSLIM] Cups w/handles vs LL to UR graph shapes > > Date: Sunday, May 25, 1997 4:32 PM > > > > Being as it is soooo, soooo quiet let me make a couple of > analagies that > > may bring one or two of you back to life. First, let me say that > I am well > > familiar with a cup w/handle, one properly formed, and the proper > b/o point > > and buy point. > > If you were at the horse races and could only bet on one > race. In the > > race is a horse that "used to be" a real winner. It has gone > through some > > tough times and people have basically gotten off of it. However, > the last > > few times out he has shown promise. In fact has even won his last > two races > > and more people are beginning to pick up on him. You know if you > bet on him > > to win for you $2 you can expect to get back maybe $5, possibly > even $10. > > However, in the same race is a horse that has not lost a race, > not one, in > > the last year. He has run 20 races this year and has won every > single one > > of them. You only have $2 to bet and if you lose you will go > hungry tonight > > and you HAVE to bet on one of them. Are you going to tell me you > are going > > to bet against the horse who has not lost ONE race in the last > year for the > > "possibility" that yours "might" come in? > > Second analagy: You are a baseball team manager. The bases > are loaded. > > It's the bottom of the ninth. There are two outs. You have a > choice of two > > batters to put at the plate. One "used to" be Mr. October. One > used to hit > > a home-run every other time he came to the plate. He is big, he > is strong, > > he looks like a brute. However, he has been a little bit of a > slump lately, > > BUT is showing great promise. Oh yeah, this is the last game of > the world > > series. The game is tied. Now you have another batter who is > available. He > > doesn't look like much. He doesn't have much of a following. He > is sort of > > small in size and statue. He doesn't earn very much salary. > However, his > > last 10 times at bat he has gotten a single. You going to bet, > that it is > > time the single man struck out? At this particular moment? You > going to bet > > that the "used to be" superstar is going to "shine" at this > particular > > moment? > > This analagy can be drawn in forty dozen different ways. > They all > > amount to the same thing. Give me the horse, baseball player, or > stock that > > is and has been doing a great job and IS DOING SO right this > minute. Not > > one that "has promise". I believe in inertia. I believe in > betting on > > WINNERS. Winners who are winning RIGHT NOW. Does any of this make > any sense > > to anybody out there? Thoughts? > > James > ------------------------------ Date: Mon, 26 May 1997 09:10:54 -0700 From: "James B. Andrews" Subject: Re: [CANSLIM] Cups w/handles vs LL to UR graph shapes At 11:02 AM 5/26/97 -0500, you wrote: >Support Levels: > Got other things to do so this will be the last defense of the LL to SNIP >getting out. We all know this story and scenerio. Now as to a support level >for the LL to UR - on my graph its a very definite and pronouced RED line. >That's the ten day moving average line. Should this stock break this line >it will most likely go to my yellow line. Thats the 50 day moving average. >MOST (85% or better) will hold here IF they break the ten day. Should they >break this line, odds are good they will go to my purple line, the 100 day >moving average. From here there really is no other line for me. If I sold >all stocks that broke the 10 day line it would probably work out. Never >tested it. It would CERTAINLY be advantageous to sell those that break the >50 day. The only problem with this "has been" that so many that break the >50 day only do it one to three days and then begin moving right back up. >Have lived this one and usually get out of the ones that start coming back >right before they do and tend to stay in the ones that keep going down. >(Thats the reason for the MANDATORY stop loss). > What service are you using or do you know of that shows charts with 10, 50 and 100 day lines??? Thanks for the help.... Your posts are great!!! Jim Andrews Phoenix ------------------------------ Date: Mon, 26 May 1997 12:34:02 -0400 (EDT) From: Dbphoenix@aol.com Subject: Re: [CANSLIM] intro Sam Funchess In a message dated 97-05-26 09:57:16 EDT, you write: << First day. I hope to learn alot from everybody. Can anyone give me some pointers on first time uses of canslim. I have read the book and get IBD. Is there any thing that one would recommend, so that I can avoid the first time pitfalls you have experienced? Thanks Sam >> Well, Sam, the most common error I find amongst not only newbies but also those who have been using "CS" for a while is an overemphasis on numbers. There are a number of reasons for this which I won't go in to here. Suffice it to say that CS is not a mechanical system by any means and attempts to reduce it to a set of rules based on numbers of one sort or another will lead you to make all sorts of bad choices. CS is an approach, a conceptual system. It attempts to combine fundamental and technical factors, as well as value and momentum factors, in a way that no other system of which I am aware does. I suggest you reread the book and ignore the numbers while doing so. You'll find that your investing approach will wind up being far more adherent to CS than those which state that C must be such-and-such a percentage and relative strength must be so-and-so an IBD rank. If you're truly interested in becoming an independent investor, I also suggest you expand your knowledge of charts and the relationship of price and volume beyond what is explained in HTMMIS. Both a knowledge of chart patterns and a knowledge of price/volume relationships are critical to a confident use of CS. For the beginner, the "Technical Analysis: A Personal Seminar" book from the NY Institute of Finance is very good. Also, with regard to volume studies, "Charting the Stock Market" from the editors of Stocks and Commodities magazine. Both these books are inexpensive and are available from Amazon.com. Two other suggestions: (1) limit yourself to paper trades for awhile; CS is not an overwhelmingly complicated system, but neither is it as simple as many would have you believe; poke it with a stick for awhile before you take it home with you, (2) keep a journal of all your transactions--why you made them, did they work out, why or why not, what did you miss, what would you have done differently, what did you learn; when you find yourself hitting the nail on the head regularly, you may then want to plunk down some real money. - ------Db ------------------------------ Date: Mon, 26 May 1997 13:01:25 -0400 (EDT) From: Dbphoenix@aol.com Subject: Re: [CANSLIM] Fw: High EPS/RS Stocks In a message dated 97-05-25 15:15:15 EDT, you write: << Any opinions on the following stocks? RF Monolithics RFMI (IBD EPS/RS 92/95) Uniphase UNPH (98/95) Software Artistry SWRT (83/95) They've all broken out of recent bases and are ranked high in our HI-EPSRS database.>> Of the three, only the first two are CS stocks. RFMI's current price is 40% past its breakout and buypoint, making it unacceptable for purchase until it forms a new base. UNPH is 15% past its buypoint, but even so, the short-term price target is only 60. If it manages to break past that, it will be fully valued by at least some professionals at around 63. The risk/reward ratio on this and RFMI just aren't good enough, IMO. - ------Db ------------------------------ Date: Mon, 26 May 1997 12:24:28 -0500 From: "Brenda" Subject: [CANSLIM] Re: [Charts showing 10,50,100 dma) - ---------- > From: James B. Andrews > To: canslim@mail.xmission.com > Subject: Re: [CANSLIM] Cups w/handles vs LL to UR graph shapes > Date: Monday, May 26, 1997 11:10 AM > >What service are you using or do you know of that shows charts with 10, 50 > and 100 day lines??? > > Thanks for the help.... Your posts are great!!! > > Jim Andrews Phoenix > Personally, I use TC2000. From the comments here from the group it "may be" an antiquated system. However, it still works for me and being an "old dog" I just don't have the time to learn a new trick. I would think that most chart services allow you to put in some of your own parameters. With TC2000 you can basically set up 10 different ways to view charts and save each so that you can always view the graphs in this way. I set up the 10,50 and 100 dma. Others find a 200 dma very helpful. Some will draw lines above the current price the exact distance of each of these lines or whatever lines you choose. This will approach the philosophy behind Bollanger bands. I simply draw channel lines. A line across the top highest point and another line across the bottom. As long as a stock stays within this channel it "tends to" stay in this channel. If it runs up to fast and leaves the upper boundary it almost always comes back to being inside the trend channel. Should it hit the bottom of the channel it "ALMOST" always tends to jump up within the next day or two. These are just a few of the little "tricks/gimmicks" that I have found that are really nothing more than a technical analysis of a stock. One of the few on CNBC, that I listen to very closely when they speak is John Murphy. Then he only uses Technical and very seldom interjects his "feeelings/opinons/personal thoughts". He tends to read the graph (aka price pattern), try to "hear" what it is telling him, and then predict where the stock "should go" from here IF it follows what could and should be reasonalbly expected from all previous data. Think Mr. O'Neil mentions this several times in HTMMIS. Hope this helps. James P.S. Once you learn how to use channel lines you may find this to be a GREAT help in knowing "when" to purchase a stock. Try never to purchase when the stock is above the channel line (being patient and waiting for it to return) and being confident and sure enough to buy when it is on the bottom of the channel line but moving steadily upward. We, as investors, need ALL the help and advantages we can get. We need every possible odd on our side. Still, a stock that falls in the channel, is a good LL to UR chart, is still subjected to ALL of the other CANSLIM grading criteria. The tighter you make your criteria, the fewer stocks you will have to pick from but I have found the higher the success rate. ------------------------------ Date: Mon, 26 May 1997 13:56:06 -0400 (EDT) From: Zoran Mitrovski Subject: Re: [CANSLIM] intro Sam Funchess Db wrote to Sam: > In a message dated 97-05-26 09:57:16 EDT, you write: > > << First day. I hope to learn alot from everybody. Can anyone give me some > pointers on first time uses of canslim. I have read the book and get > IBD. Is there any thing that one would recommend, so that I can avoid > the first time pitfalls you have experienced? > Thanks Sam >> [snip a nice presentation with lots of valuable advice including the following] > Two other suggestions: (1) limit yourself to paper trades for awhile; CS is > not an overwhelmingly complicated system, but neither is it as simple as many > would have you believe; poke it with a stick for awhile before you take it > home with you, (2) keep a journal of all your transactions--why you made > them, did they work out, why or why not, what did you miss, what would you > have done differently, what did you learn; when you find yourself hitting the > nail on the head regularly, you may then want to plunk down some real money. I would only like to warn about the dangers of over-analyzing, and I would like to encourage everyone to start trading with real money as soon as possible. I have Mike Langston to thank for giving me that final push I needed to start trading real money in November last year. What I learned since then from my actual trading experiences is many times better and more valuable than what I thought I had learned before that. This is what I can add as my advice: 1. Put aside a sum of money that you can view as your tuition and that you can mentally write off even though you actually presently own it. 2. Set your goal to be to survive as long as possible and to learn as much as possible before you actually lose that money. 3. Now with these mental/emotional issues behind, you can start working on and tweaking your strategy. When developing, following and tweaking a strategy you must do a switch in your mindset from the above two points and you must start viewing the pre-assigned trading money as if these are the only money you will ever have in your life, so you better lose them VERY carefully. 4. This is how we come to the MOST IMPORTANT issue of STOP-LOSS: NEVER ENTER A TRADE WITHOUG A RESQUE PLAN! Every trade can go wrong and you must have a line of action prepared for that case BEFORE you enter the trade. Also, NEVER change the resque plan AFTER the trade has been entered. I personally, define the resque plan from the chart by using TA and then enter with a position which would produce a loss of 2% of my trading capital if the stop gets hit. You should consider your tuition money (as defined in (1)) as you trading capital. 5. Learning with real money is much better. There is something about money that makes us remember the lessons learned while receiving it or losing it, no matter how symbolic the amounts. I think that the above approach allows everyone to match their strategies with their personal mental structure -- a fit which I think is THE MOST important ingredient of any successful trader/investor. Risk management (strategy) fitted with to the approriate risk tolerance (mental structure, emotions) is as close to approaching the Holy Grail of Trading as theoretically possible (IMHO, of course). Also note how I never mention profits anywhere above, and how I concentrate on controlling losses. By setting your goals lower you have much higher chances of acheiving them. You also protect the sensitive and fragile novice trader in you from the often irreparable damage caused by failing to meet them. > ------Db Cheers, Zoran http://www.seas.rochester.edu:8080/ee/users/zmitrov/home.html ------------------------------ Date: Mon, 26 May 1997 13:25:13 -0500 From: "Brenda" Subject: Re: [CANSLIM] Fw: High EPS/RS Stocks - ---------- > From: Dbphoenix@aol.com > To: canslim@mail.xmission.com > Subject: Re: [CANSLIM] Fw: High EPS/RS Stocks > Date: Monday, May 26, 1997 12:01 PM > > In a message dated 97-05-25 15:15:15 EDT, you write: > > << Any opinions on the following stocks? > > RF Monolithics RFMI (IBD EPS/RS 92/95) > Uniphase UNPH (98/95) > Software Artistry SWRT (83/95) > > UNPH: I first look at the graph. Not very impressive. I see a stock that if you had owned it for the last six months you would not have made a dime. The SOX index has broken out fairly nicely and this stock has all but failed to participate. Why? I lay a graph of the WG400 (TC 2000's Elec Equip Mfg Index) over the top of it. UNPH has underperformed this index since Jan 1. Firday was the first day it is above that index. Next I look at this graph and "pretend" I can see in the future. Where can I reasonably expect this stock to go if nothing unusual happens. A 20% up move would put it at $68.40 - Is it reasonable to expect this stock to move to that point? Next I look at the stock a little longer term. If I had owned this stock Jun of 1966 I still have a 20% LOSS in the stock. So, it not only has to break this initial resistance point but then another one not far away. The stock was over $60 in Jun97 and $19 Jul97. Not a pretty picture. It has recovered a LOT since Jul97. For me to get in now and expect to make money I am expecting a stock that fell 66% in one month less than a year ago, has made up over 3/4 of that loss in 11 months to continue this path and more than make up where it fell from. I believe in miracles and although this would not be Red Sea type I would hope I could find a more promising picture. Look like a horror show that many have been caught in. However, lots of folks do enjoy those type shows. Good point: Over the last five days the volume has been steadily picking up as the price has also gone up and when 710,000 shares of a $50 stock are traded it is more than "my aunt" doing the buying. There is a lot of money that thinks this stock will continue. Didn't ask for it but here are my graph grades: Long term 35, short term 92. What would I consider my proper buy/entry point? Somewhere around the $35 range. RFMI: Basically trending upward since Jul96 but with WILD swings. If had owned it for a year would have about 20% profit. Path over last 30 days extremely too steep for James to chase. I see lots of DEEP valleys and to expect something different in the future, IMHO, is dreaming. Some stocks never form handles and seems like I remember O'Neil not being particularly hot on these. Comparing this stock to WG400 index the stock has not done better than "the average" since Jul96 utnil last week. Appears to be having a hard time staying just barely above the average at a time when LOTS of cheap stocks are getting unusual heavy buying. If was forced to buy this stock my proper entry point would be somewhere around the $11.50 to $12 range as I day trade stock hoping I could get in and out making 10%. SWRT: Too steep up slope for me. For me proper buy point was 20-25% ago. Volume bars signify that somebody knows something. Has had light volume for the last year and all of a sudden over last 10 days volume has jumped up. In light of the geneal trend of other stocks this price doesn't appear really that unusual. Of the three, if "forced" to "have to" buy one, guess this would be it. Would be watching it like a hawk. Could fall "reasonably so" to 10 easily. Oh well, there's my two cents worth. James Why would a graph of TKR not be more appealing? Now watch TKR fall! ------------------------------ Date: Mon, 26 May 1997 15:14:22 -0400 (EDT) From: Dbphoenix@aol.com Subject: Re: [CANSLIM] intro Sam Funchess In a message dated 97-05-26 14:04:06 EDT, you write: Sam (and other newbies), Zoran makes some excellent points in his post. If I may, I'd like to add another 2 cents' worth (that makes 4 cents so far). << I would only like to warn about the dangers of over-analyzing, and I would like to encourage everyone to start trading with real money as soon as possible.>> When you enter the wonderful world of TA ( and eventually you will), you will find yourself tempted to analyze stocks to a fare-thee-well. Go ahead. It's typical. Get through it. Then get over it. At some point, all indicators will contradict each other. Whatever your basic indicators turn out to be will be entirely up to you, but if you use more than a handful, including MAs, you'll probably never buy a stock. Evaluate the utility of whatever indicators you audition yourself. Never take somebody's word for it that such-and-such an indicator can be trusted. Find out for yourself. <<4. This is how we come to the MOST IMPORTANT issue of STOP-LOSS: NEVER ENTER A TRADE WITHOUG A RESQUE PLAN! Every trade can go wrong and you must have a line of action prepared for that case BEFORE you enter the trade.>> Exactly. You should know at the time you decide to place an order for a stock at what point your stop-loss will be set and what your target price will be. If you don't have the discipline to follow whatever stop-loss strategy you've decided on, then don't trade. CS is about nothing if it is not about discipline. You'll hear conflicting info about where your stop-loss should be. Some people say 2%. Some 5%. O'N recommends 8-10. Some will go as far as 25%. You also have to determine whether people are talking about stops below the purchase price or stops below the peak price the stock achieved while they owned it. You can also determine your stops by points rather than percentages. None of this matters. What matters are the concepts of (1) having a loss-control plan and (2) sticking to it. Don't let somebody make you feel like an ignoramus just because your stop-loss plan isn't the same as theirs. <> Again, excellent point. I would add here, though, that even though you shouldn't abandon a plan through lack of discipline, neither should you abandon a plan just because it doesn't seem to be working. Not every trade will work out to your satisfaction, even though you may have done everything right. Give whatever strategy you've developed time to work. When it becomes clear that it's not a good strategy, then tweak it, unless it's unsalvageable. But don't tweak it to the point where you throw out what may have been its best features. Fiddle with one or two things at a time until you find the gremlin that was sabotaging your efforts. <> Zoran is to commended for this point as well. You will often find, on stock boards of all kinds (including CS boards), those who are so wrapped up in orgies of self-congratulation that one wonders why they are not basking on a beach in Barbados instead of casting their pearls before the likes of swine such as we. The fact is that anybody on the ether can say just about anything he or she chooses to say, including who they are and what their background is. Ignore all claims of results, profits, returns, and general investing prowess. Shun the frumious HTS (hot stock tip). Take everything you read here and elsewhere with the largest grain of salt you can find. It's your money. You have many choices other than burying it in the backyard or investing it in the picks of hypesters. Unfortunately, virtually all of these choices involve a great deal of hard work and study. - ----Db ------------------------------ Date: Mon, 26 May 1997 14:24:25 -0500 From: "Brenda" Subject: [CANSLIM] Avoiding Pitfalls - ---------- > From: Zoran Mitrovski > To: canslim@mail.xmission.com > Cc: Zoran Mitrovski > Subject: Re: [CANSLIM] intro Sam Funchess > Date: Monday, May 26, 1997 12:56 PM > > Db wrote to Sam: > > > In a message dated 97-05-26 09:57:16 EDT, you write: > > > so that I can avoid the first time pitfalls you have experienced? > > Thanks Sam >> > >Zoran gave you some excellent advice. You will find "most" of the advice given here is very, very good. Some is not so good. A few tips from me - NEVER, NEVER, NEVER expect to make money on a "tip". Do your own homework. Never think you have to buy a stock within the next five minutes or it's gone forever. If it is "that" sensitive why would you want to own it. The most valuable advice is as follows. After reading HTMMIS the first time, basically just skimming it realize that you have just skimmed the surface. Understand that the book, even though written simply for the average investor, is a College Graduate book written so that those in the sixth grade can understand the principles. Now go to the section entitled the most common mistakes investors make. Start with number one. Surely it is there first for a reason. Try to understand it. Look at it, write it, go back to the section of the book that deals with it. Don't memorize it but LEARN it. KNOW it. Then write it down. On your WALL if necessary. Plan to not make this ONE mistake. YOU WILL, but try to NOT make just this ONE mistake. Now, once you "think" you completely understand this one inside out, upside down, backwards and forwards go to the second mistake. Repeat the process. Go through the ENTIRE list. Each time, once you "have" one then write it down under the preceeding. Learn these mistakes well enough that you could recite them WITHOUT the list in front of you. If in your investing career you could just avoid these mistakes that Mr. O'Neil thought important enough to put in his book IMHO you will be far, far, far ahead of the croud. You will also find that you will disagree with ALMOST ALL that is said on CNBC and by their buy, sell and hold EXPERTS. You will also find yourself "feeling like" you are going against the stream. You will also find yourself to be in the minority MOST of the time. When you find yourself in the main stream you better go back and re-evaluate your position. If you have Microsoft Publisher capabilities I will go back and look up an OLD, OLD issue of just some "basic" rules that I follow. My rule #1 goes against the grain for some but it remains my #1. It is about the seventh day. Well, thats my two cents worth. Good luck (not really any such thing), Happy Hunting (and it can be), Make a Ton (and you can as long as that is not what you are trying for), and best of all - ALWAYS, ALWAYS do your OWN homework. James Welcome to the group. Keep up informed of stocks that have caught your eye. ------------------------------ Date: Mon, 26 May 1997 14:31:44 -0500 From: "Brenda" Subject: [CANSLIM] ROFL Sometimes I love what I read here. Think you gave Sam some excellent advice. Even think I saw some reference to me in there about claims etc. Touche! Point well made and I totally agree. What really made me roll in the floor - not acutally, but I DID actually laugh out loud was when you made reference to at some point all indicators will contradict each other. So true. Just when you think you've just about got a handle on it - here comes some indicator that blows you away. The one I have the toughest time with is this one: I've done all my homework, I'm ready to buy the stock, I feel pretty good about it. Here I go. Just before I hit the enter button, some yo-yo comes on TV and says that it's fully valued or he rates it a sell. You guessed it. I hesitate. Can't count the number of times this has happened. How many times has it saved me money? NONE that I can remember. However, it still influences me. Sometimes wish I could mute CNBC and JUST watch the ticker. Oh well, once again, think you gave some very good advice. Enjoy your presence. James ------------------------------ Date: Mon, 26 May 1997 17:14:42 -0400 (EDT) From: Dbphoenix@aol.com Subject: Re: [CANSLIM] Cups w/handles vs LL to UR graph shapes In a message dated 97-05-26 15:40:05 EDT, you write: << If you followed ALL the posts you will find out that a stock I buy that follows MY desire of a LL to UR pattern just "happens" to have Current and Yearly Earnings that will put it in the top five percent of all stocks on wall street - That covers C and A. It will usually have a number product, management or something special going on in it though it may not be advertised on every TV channel every 15 minutes and in every newspaper (a plus for me and certainly the N ). A stock that I prefer to buy with have sales,profit,new products,institutional sponsorship. A stock that I prefer to buy will not only have all of these attitributes BUT will have to AVERAGE out with a grade of 95 considering all the categories that I grade (EPS,Rel, Acc, Grp, Spn, Price Pattern both long and short) or it doesn't make it.>> Apparently I missed a couple. If revenues, profit margins, etc. all play a part in your decision-making process, you're doing considerably more than playing with numbers and rankings. <> Me neither. My point was that if these stocks had been bought at the time, there would have been no hint as to what was to come. Then as now, any of these stocks could tank without warning (3Com was a darling right up to 80). This is not to imply that these are poor choices or that your system doesn't generate a profit for you (though those who follow it may not put as much into it as you have), only that ascending trend channels are only one of several momentum strategies, and unless one has the discipline to follow a strict stop-loss system, one is likely to get bitten in the ass. There are a number of chart patterns which can yield substantial profits if you know how to use them. And sometimes you have to know how to use several depending on market conditions at the time. Right now, for example, I'm finding far more handle and base failures than successes, for a variety of reasons having to do mostly with investor psychology. So I really don't look for C&H patterns any more (when market conditions and investor psychology change for the better, they may again be something I can trust). Instead I'm buying off V-bottoms and trend-channel breakouts and doing far better. But this doesn't mean that I'm going to suggest that anyone else do so, particularly since I may put these strategies back in my toolbox at any moment. The "professional" amateur investor should have a variety of strategies in his toolbox. Some will work best at the beginnings of bull markets, some in the middle, some toward the end. Some will work only in bear markets and some only during corrections. The only alternative is to wait until market conditions and investor psychology are just right for whatever single strategy the investor chooses to follow, then make hay while the sun shines. This means far fewer opportunities for making money. It also means the investor has time for a life. - ------Db ------------------------------ Date: Mon, 26 May 1997 17:19:50 -0400 (EDT) From: Dbphoenix@aol.com Subject: Re: [CANSLIM] ROFL In a message dated 97-05-26 15:31:13 EDT, you write: << Sometimes wish I could mute CNBC and JUST watch the ticker.>> Since my computer and my TV are in separate rooms, I have, by virtue of necessity, practically abandoned CNBC. Since having done so, I find that my investment decisions have yielded vastly superior results, largely in part, I suspect, to my not succumbing to the influence of the ARC (Analysts' Repertory Company). - -----Db ------------------------------ Date: Mon, 26 May 1997 11:27:09 -0700 From: leojung Subject: Re: [CANSLIM] Cups w/handles vs LL to UR graph shapes Try www.investools.com/cgi-bin/charts.pl ------------------------------ Date: Tue, 27 May 1997 02:15:33 -0600 (MDT) From: cando@highfiber.com Subject: Re: [CANSLIM] intro Sam Funchess >First day. I hope to learn alot from everybody. Can anyone give me some >pointers on first time uses of canslim. I have read the book and get >IBD. Is there any thing that one would recommend, so that I can avoid >the first time pitfalls you have experienced? >Thanks Sam >coach@spyder.net Hi Sam! I just got on the list recently myself but have been using O'Neil strategy seriously for a couple of years. If you're serious about CAN SLIM I would say start getting/using Daily Graphs ( from the discussion here it seems that the online version isn't quite there with regard to timeliness). The paper DG's are a great place to start looking for the CAN SLIM characteristics. Good luck. Coburn ------------------------------ Date: Tue, 27 May 1997 21:33:33 GMT+7 From: Peter Christiansen Subject: [CANSLIM] Breakout AMN For those that don't mind a thin stock, you might want to look at Aeron (AMN). It looks like it is breaking out today. EPS 89, RS about 80, Group 84, Timeliness A. Peter Christiansen Bangkok, Thailand Connected with OS/2 Warp 3.0 & The Post Road Mailer _____________________________________________________________________________________ Detour: The roughest distance between two points. ------------------------------ End of canslim Digest V1 #184 ***************************** To subscribe to canslim Digest, send the command: subscribe canslim-digest in the body of a message to "majordomo@xmission.com". If you want to subscribe something other than the account the mail is coming from, such as a local redistribution list, then append that address to the "subscribe" command; for example, to subscribe "local-canslim": subscribe canslim-digest local-canslim@your.domain.net A non-digest (direct mail) version of this list is also available; to subscribe to that instead, replace all instances of "canslim-digest" in the commands above with "canslim". Back issues are available for anonymous FTP from ftp.xmission.com, in pub/lists/canslim/archive. 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