From: canslim-owner@xmission.com (canslim Digest) To: canslim-digest@xmission.com Subject: canslim Digest V1 #230 Reply-To: canslim@xmission.com Sender: canslim-owner@xmission.com Errors-To: canslim-owner@xmission.com Precedence: canslim Digest Thursday, June 19 1997 Volume 01 : Number 230 In this issue: Re: [CANSLIM] Deja Vu (REY) Re: [CANSLIM] Fundamental Importance Re: [CANSLIM] Deja Vu (REY) Re: [CANSLIM] hello all :-) [CANSLIM] Re: INVX Re: [CANSLIM] A Few [OTC] Questions Re: [CANSLIM] A Few [OTC] Questions Re: [CANSLIM] Re: INVX Re: [CANSLIM] hello all :-) RE: [CANSLIM] oneill transcript/WDC 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: Wed, 18 Jun 1997 21:49:42 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] Deja Vu (REY) If you started, as of the last report (most likely Mar 31) with institutional ownership of 75%, I would be very suspicious that those "large blocks" are actually selling into the retail "bounce" buying (in other words I would suspect this is very distributional, as opposed to the institutionals trying to buy up the remaining 25% of the issue). With the breakdown apparently resulting from a neg earnings preannouncement, institutional owners are less likely to want more, that they will have to hold forever. Rather, I would expect them to be selling into ANY rally. Contrast this to the very sharp reversal on heavy volume of Scopus (SCOP) today as investors decided that the upcoming earnings will be much better than the prior gloomy forecasts. Altho seeing some selloff on profit taking in the aftermarket, I am watching this one tomorrow to see if I can grab a high risk, short term option play out of it. Already broke thru some recent resistance. Also watching INVX for a similiar options play to see if it is confirming a "head and shoulders" or ready to try for a move up. 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: Zoran Mitrovski > To: canslim@mail.xmission.com > Cc: Zoran Mitrovski > Subject: [CANSLIM] Deja Vu (REY) > Date: Wednesday, June 18, 1997 3:45 PM > > > These bounces are starting to get too easy and that's > > I was looking for overbought/oversold situations with > nice intraday reversals on strong volume. > > The best looking one was Reynolds & Reynolds (REY) > It has 75% institutional ownership, so I guess those > big buying blocks meant big guys loading up the coffers ------------------------------ Date: Wed, 18 Jun 1997 22:05:23 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] Fundamental Importance First, with any "chain" type co, look at "same store sales" comparisons for true growth figures. With BOST, you won't be impressed when you look at the nrs for stores opened over one year (which is the standard comparison). Total growth is largely coming from new stores being added, which is now being cut in over half, thus depressing the rate of growth of the total corp. As several have already posted, their acct'ing procedures are highly suspect, and scaring off most institutionals. Their jobs cuts are mostly at the corp hq level, where they had grown too fat. However, they are also "farming out" some of the admin stuff into regional franchises, both to help the corp cut costs, but also help cut costs at the regional/local level. This may work for awhile, but also means a loss of some control. They blundered with some of their marketing, recently discovering that much of their "coupons" deals and "lunch specials" were cutting into their dinner business, which was their "high margin" stuff. Also, with all their new stores, as well as the competition from all the other "chicken" chains, they are discovering some areas where they are saturated, even cannibalizing business from one existing store when a new one opens. This doesn't make the existing store happy, nor does it help profits. This was a "high flyer" that went sour (and south) and the RS of 3 pretty much says it all. The CS nrs that appear attractive are largely suspect and based on what is likely bad data. 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: Eccless@aol.com > To: canslim@xmission.com > Subject: [CANSLIM] Fundamental Importance > Date: Wednesday, June 18, 1997 9:12 AM > > Here's a stock that has a 107% growth rate. Its EPS rank is 97. Earnings have > increased significantly every year since 1993. Earnings increases for the > past four quarters have been 60%, 53%, 42%, and 33%. Earnings per share are > anticipated to be $1.35 in 1997 and $1.75 in 1998. The price/earnings ratio > is now 14. > > Sales increases for the past four quarters have been 86%, 92%, 71%, and 147%. > > What about relative strength? It's only 3. The price has declined from a high > of 41 in 1996 to 15 5/8 last week. The price hit a new low a week and a half > ago on heavy volume in what appears to be a selling climax. > > What is this stock? Boston Chicken (BOST). > > Here is a stock with what I would call positive fundamentals, yet the market > eschews it. This suggests that while fundamentals should not be ignored the > market action tells you that this stock should not be bought. > ------------------------------ Date: Wed, 18 Jun 1997 22:48:45 -0400 (EDT) From: Zoran Mitrovski Subject: Re: [CANSLIM] Deja Vu (REY) Tom wrote: > If you started, as of the last report (most likely Mar 31) with > institutional ownership of 75%, I would be very suspicious that > those "large blocks" are actually selling into the retail "bounce" > buying (in other words I would suspect this is very distributional, > as opposed to the institutionals trying to buy up the remaining 25% > of the issue). With the breakdown apparently resulting from a neg > earnings preannouncement, institutional owners are less likely to > want more, that they will have to hold forever. Rather, I would > expect them to be selling into ANY rally. I was also suspicious of that, Tom. That's why I sold into the climax strength @ 16 3/4 right before the close for a sweet $1 gain. Btw, that was exactly my price goal as it was exactly in the middle of the gap between 19.5 and 14. It would be fun to see whether the "50% retracement" theory will hold in this case. It closed quite strong today but I have a feeling that it won't go much above 17 for a long time. Could even be a nice short tomorrow if/when the "big boys" suddenly run out of small hands to accept their load which would break the price down, which would cause for even more big and small hands to start dumping what they have. THis really is like reading a novel or watching a movie. The markets are the best screen-writers. > Contrast this to the very sharp reversal on heavy volume of Scopus > (SCOP) today as investors decided that the upcoming earnings will > be much better than the prior gloomy forecasts. Altho seeing some > selloff on profit taking in the aftermarket, I am watching this one > tomorrow to see if I can grab a high risk, short term option play > out of it. Already broke thru some recent resistance. Also watching > INVX for a similiar options play to see if it is confirming a "head > and shoulders" or ready to try for a move up. I don't know what to make of SCOP's action today. The down-trend reversal was really immense but so was the sell-off right before the close (and you say it continued in after-market). If it breaks 27 I guess the chances are it would shoot up higher, but even then it would be too ambiguous of a situation for my taste. I too was watching INVX, and was astonished by the huge 2 pt sell-off right before the close. You are right about the "h&s" dilemma. 25 1/2 is a major support area. If it breaks that, then it's sayonara invx. I still think that from the way it has been holding on, the chances are higher that it is going to move up from here. Fun to watch, anyway. Cheers, Zoran http://www.seas.rochester.edu:8080/ee/users/zmitrov/home.html ------------------------------ Date: Thu, 19 Jun 1997 00:29:11 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] hello all :-) Hi Christopher, and welcome to the group. Actually, it's not really "our philosophy", it's Wm O'Neill's, that drives this group. And definitely, spend a few bucks and buy the book, read it the first time like a novel, then go back and start actually studying it chapter by chapter like a college level textbook. Make plenty of margin notes, ask questions, challenge what he has to say, then every month or so after you start actively investing either on paper or with real money go back and read it again. Every time I read it I learn something new, or find something new to apply to my investing decisions (and mistakes). My advice on starting an investment club is that first, the members should all be experienced investors, second, be reasonably compatible with each other (not total strangers at least), and third all have similiar investing styles and goals (e.g. if some are there for income ideas and some for growth, just doesn't work well). A club can be set up where all pool the money and make a collective decision on what to do with it, or each can maintain separate accts and make their own decisions. If the membership ranges from very experienced to not experienced at all, tends to cause conflict and confusion. I agree in general with your comments on the cable group. After reading several recent articles on the potential for growth in this group due internet access, am currently trying to find the time for further review and research. As for investing in cos still private, forget it unless you are making about $250K a year or have a net worth (exclusive of your residence) of $500K or more. Bridge loans and the like are for the extremely sophisticated and wealthy investor only. Frankly, due your age, inexperience (congrats on Netscape, BTW), and likely current income, my advice would be periodic investing in a quality growth fund. Not as much fun, but more reliable till you gain both some investing dollars and experience. 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: Christopher Reid To: canslim@mail.xmission.com Subject: [CANSLIM] hello all :-) Date: Wednesday, June 18, 1997 10:00 AM I just joined CANSLIM yesterday and I suppose I'll be buying the book tonight so I can learn all about your philosiphy on investing. I'm only twenty and in university so investing is still quite new to me. I'm in electrical engineering and consequently I'm exposed to all sorts of technology so sometimes I see some small companies that I think might go big. Unfortunately I know little about investment, so I have two questions 1) Does anybody have advice on starting an investment club and how to go about it 2)(more of a comment) I believe cable modems are going to be the next medium for accessing the internet, and I was thinking that maybe some of the chipset manufactures or companies who make these special modems might have a new exploding market, there also the cable companies, but they're so large and unvolatile. I also reccomend Avanier (web solutions) and Platform (multiprocessing networking solutions) (these are Canadian companies doubling in size every couple months, but I don't think they're public yet), which reminds me how do I invest in private companies???? I also heard the husky (plastic molding injections) will be going somewhere. Anyways like I said I know little now, so I guess I can't really contribute more than heresay and my own fairly unsupported opinions (but I was right about netscape, which doubled my money in a few months time. Anyway, any thoughts or help would be appreciated. Chris Reid - ---------- ------------------------------ Date: Thu, 19 Jun 1997 00:08:44 -0400 From: "Tom Worley" Subject: [CANSLIM] Re: INVX A week or so ago, would have said with little doubt that it was completing a classic H&S pattern. However, has not only managed to flatten out and base, but is still the #1 in its group, making me suspect a potential b/o forming. The latest two days vol also beat avg, encouraging me in my greedy option based thinking. Its trailing PE at 19 is hardly excessive, and its projected PE is ridiculous. On the other hand, its first six months leaves it well under what it must do to just meet full year estimates, and timeliness and a/d are both only C. Still, like the stock and gut tells me there may be enough of a short term "pop" in it to keep a close eye on it. Right now feels like more rain and storms here, so if I suddenly disappear, hope you will understa.ll-38-05=23=-048t433)&%4.......... 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: Patrick Toy > To: stkguru@netside.net > Subject: INVX > Date: Wednesday, June 18, 1997 10:45 PM > > Tom, > > How are things? I know how the tropical weather is since I am just up the > road in Orlando. I'm just about fed up with the rain. Anyway, I wanted to > ask you about your brief comment on INVX. When you mentioned the H & S > pattern, are you referring to the shoulder that began in the 1st week of > April and the head that peaked in the 1st week of May? If so, isn't this > pattern signifiying a downward trend.? On the contrary, you also made the > comment that INVX could be moving up. Assuming my interpretations are > correct, why have you come up with 2 conflicting possibilities? (I am not > challenging what you said...just wanted to understand). I would appreciate > any additional input. > > Thanks, > Patrick ------------------------------ Date: Thu, 19 Jun 1997 00:05:41 -0500 From: George Subject: Re: [CANSLIM] A Few [OTC] Questions Tom, I now have a pretty good idea of what goes on behind the scenes, which was very interesting and educational. I always appreciate the time you spend on the people in this group and the depth at which you answer. I only have a very few remaining questions and I will be out of your hair - -- at least on this one, anyway. So, please bear with me. If I can get the following figured out, I think I will finally have it down (I can hear them cheering!). The "bid" represents the low side of the spread and the "ask" represents the high side of the spread. You use "offer" as though it is the same as the "ask." Is this correct? My investment FAQ tells me that the offer is the same as the bid and that may have led to a lot of my confusion in understanding how all this works. A qualifying, "better" limit order to buy, will move the "bid" and a qualifying, "better" limit order to sell, will move the "ask." Is this correct? You state that, "...when you get a quote, what you see is the best (highest) bid and the best (lowest) offer on that system..." So let me see if I understand that. When a stock is moving up, as the higher bids (and market orders) take out the lowest ask, then the next lowest ask is posted and so on. When a stock is moving down, as the lower asks (and market orders) take out the highest bid, then the next highest bid is posted and so on. This process has the net result of "sliding" the spread up and down as the stock price moves up and down. Is that correct? Thanks, George ------------------------------ Date: Thu, 19 Jun 1997 00:38:03 -0500 From: "Richard Estes" Subject: Re: [CANSLIM] A Few [OTC] Questions This is a multi-part message in MIME format. - ------=_NextPart_000_01BC7C49.0C4A8B40 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable You did mean limit order of 25.625, right? As we watch the real time = systems now,say Signal or livewire, we see trades between bid and ask, = what trades aren't we seeing? So, lets say spread is 14.25 to 15 and I = put in a sell at 14.87 and it is filled, he needed my shares to fill a = buy at 15? Richard Estes ---- From: Tom Worley To: canslim@mail.xmission.com Date: Wednesday, June 18, 1997 9:10 PM Subject: Re: [CANSLIM] A Few [OTC] Questions and the best offer from ALL SYSTEMS. Thus, if a stock is trading 25.5 by 26, and some individual investor places an order to buy 200 shares at 26.625, then the BD who gets the order must either fill at that price or else represent the now high bid. As soon as the order is filled, that "high" bid may disappear and the bid go right back to 25.5. But at least for that snapshot in time, we all can see that high bid. And if there are a lot of these buyers "nibbling around the edges", then we will be able to see this also, and have a hint the stock may be moving up. This is particularly important if there is a buyer (or seller) with volume. Right now we lack this info on most OTC stocks. When a stock is "out of play" (not active), the quote shown is the best price someone is willing to buy at, and the lowest price someone is willing to sell at. Has nothing to do with the prices where the stock was last "in play". tom w > > > - ------=_NextPart_000_01BC7C49.0C4A8B40 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable

You did = mean limit order=20 of 25.625, right? As we watch the real time systems now,say Signal or = livewire,=20 we see trades between bid and ask, what trades aren't we seeing? So, = lets say=20 spread is 14.25 to 15 and I put in a sell at 14.87 and it is filled, he = needed=20 my shares to fill a buy at 15?

Richard = Estes

----
From: Tom Worley <stkguru@netside.net>
To: canslim@mail.xmission.com
Date: Wednesday, June 18, 1997 9:10 PM
Subject: Re: [CANSLIM] A Few [OTC] Questions

and the best offer from ALL SYSTEMS. Thus, if = a stock=20 is trading
25.5 by 26, and some individual investor places an order to buy 200
shares at 26.625, then the BD who gets the order must either fill
at that price or else represent the now high bid. As soon as the
order is filled, that "high" bid may disappear and the bid go=20 right
back to 25.5. But at least for that snapshot in time, we all can
see that high bid. And if there are a lot of these buyers = "nibbling
around the edges", then we will be able to see this also, and = have
a hint the stock may be moving up. This is particularly important
if there is a buyer (or seller) with volume. Right now we lack this
info on most OTC stocks.



When a stock is "out of play" (not active), the quote shown is = the
best price someone is willing to buy at, and the lowest price
someone is willing to sell at. Has nothing to do with the prices
where the stock was last "in play".


tom w

>
> >
 - ------=_NextPart_000_01BC7C49.0C4A8B40-- ------------------------------ Date: Thu, 19 Jun 1997 02:04:53 -0500 From: George Subject: Re: [CANSLIM] Re: INVX A few other interesting observations on INVX: The last bounce off of the barchart's up-trendline was followed by a very weak rally on decreasing volume and then into a base when it hit minor horizontal price resistance, around 32. Would appear to indicate "no strength" to the upside. Or possibly a minor technical rally off the bounce, with yet another retest of horizontal price support coming up, around 26. Or maybe an "accumulating" base. Or, or, or.... Possible reasons and some interesting intersections: The 0.50 cent P&F chart shows about a five point break of it's up-trendline. Double resistance where the old up-trendline intersects the new down-trendline that is trying to form is around 34. The $1.00 P&F chart also shows about a five point break in it's up-trendlime, with yesterday's (6/17) price up against the now resistance of the old up-trendline, around 32/33. IMHO, this is what probably pushed price down today (6/18). Double resistance where the old up-trendline intersects the new down-trendline that is trying to form is around 35. All this in conjunction with horizontal price resistance from the high that was set back in January, around 35. That's a lot of resistance around 34/35. The only immediate support being the barchart's up-trendline, which may or may not turn out to be weak suspenders. If it breaks to the downside, the $2.00 P&F chart shows up-trendline support (on the next down column) at about 26. This is not a recommendation to do anything, but rather a "FWIW," which may not be much! George ------------------------------ Date: Thu, 19 Jun 1997 08:27:39 -0700 From: Sam Funchess Subject: Re: [CANSLIM] hello all :-) Whats the world coming to, all these engineers? Oh well! Information about investment clubs can be found by looking up NAIC (national assoc. investment clubs) or use a search engine w/ investment club. The comment about engineers stems from the ten or so engineers allready on the canslim group. Sam coach@spyder.net Christopher Reid wrote: > > I just joined CANSLIM yesterday and I suppose I'll be buying the book tonight so I can learn all about your philosiphy on investing. I'm only twenty and in university so investing is still quite new to me. I'm in electrical engineering and consequently I'm exposed to all sorts of technology so sometimes I see some small companies that I think might go big. Unfortunately I know little about investment, so I have two questions > > 1) Does anybody have advice on starting an investment club and how to go about it > > > > Chris Reid ------------------------------ Date: Thu, 19 Jun 1997 06:55:54 -0700 From: Joseph Vaughn-Perling Subject: RE: [CANSLIM] oneill transcript/WDC I bought it at US$4 six years ago, its split since then. I'm pretty happy with it. On Tuesday, June 17, 1997 8:59 PM, Tom Worley [SMTP:stkguru@netside.net] wrote: > Industry group in trouble, hasn't shown itself to be a successful > player. > > 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: Joan Sherman > > To: canslim@xmission.com > > Subject: [CANSLIM] oneill transcript > > Date: Monday, June 16, 1997 5:04 PM > > > > >From: JSherm4@aol.com > > >Date: Mon, 16 Jun 1997 20:12:17 -0400 (EDT) > > >To: joani@mindspring.com > > >Subject: oneill transcript > > >MIME-Version: 1.0 > > > > > >Content-ID: <0_1175_866506211@emout04.mail.aol.com.11342> > > >Content-type: text/plain > > > > > > > > > > > >Content-ID: <0_1175_866506211@emout04.mail.aol.com.11343> > > >Content-type: text/plain; > > > name="O'Neil Live A/Q/Commercial Tran" > > > > > >Subj: O'Neil Live A/Q/Commercial Transcript > > >Date: 13 Jun 1997 07:30:27 EDT > > >From: RANord > > >Message-ID: <19970613113000.HAA15088@ladder02.news.aol.com> > > > > > >Heard that some on the board missed WONs Q and A. Here is an > edited > > >trasncript. Enjoy. > > > > > >Roger > > > > > >IBD Jim: Good evening. I will be your moderator for > tonight's > > > event. Tonight's special guest is one of > today's most > > > successful stock market investor's. He is the > author > > > of the best selling investment book "How To Make > Money > > > In Stocks" and the Chairman of Investor's > Business > > > Daily, America's leading source for business, > > > financial, and econimic news. He is also the > creator > > > of the proven CAN SLIM investment method which > has > > > helped hundreds of thousands of individual > investors > > > realize big profits in the stock market. Now, > it is > > > my pleasure to introduce to you, Mr. William J. > O'Neil. > > > > > >WmONEIL: Thanks, Jim. It's a pleasure to be here this > evening. > > > > > >Question: I immensely enjoy IBD but is there is a way to > > > > > > simplify investing and still make money? > > > > > >WmONEIL: Anything that's worthwhile isn't simple. It > takes > > > some work. We think the CAN SLIM formula has > > > simplified it for you, breaking it down to 7 > > > characteristics to look for in your stock > selections. > > > You want all of those seven. > > > > > >Question: Has CANSLIM criteria investing fallen short of > your i > > > expectations the market this calender year? > > > > > >WmONEIL: No. There have been a large number of stocks > that > > > have acted very well. There's been a shift > toward > > > larger cap situations like Coca Cola Pfizer, > > > Microsoft. It's worked fine. We went through a > sharp > > > correction in the Nasdaq averages for two > months, and > > > that hurt a number of stocks that were very > extended, > > > but basically stocks fitting the criteria coming > out of > > > bases with accelerating sales and earnings have > done > > > very well. > > > > > >Question: how is your cup and handle chart method affected > by > > > the tremendous rise in the market or does it > apply to > > > any bull or bear ??? > > > > > >WmONEIL: You find cup with handle formation with every > single > > > market. That goes back more than 40 years. > We've > > > built models and they show up year after year. > > > > > >Question: I would like Mr. O'Neill to review for me the > big > > > question....When do I sell a stock? > > > > > >WmONEIL: You should get my book, How To Make Money in > Stocks. > > > There are two chapters there that talk about > when to sell > > > stocks. There are 20 some odd specific rules > that tell > > > you the symptoms to look for when a stock is > topping. > > > > > >Question: How long can the market ignore the unfavorable > > > economic reports, which indicate a rate hike is > > > likely? > > > > > >WmONEIL: The rate hike we had was only a quarter percent, > and > > > the indications are that the next one, if it > occurs, > > > will on be another quarter percent, and that is > not a > > > devasting rate increase. Actually your finance > and > > > insurance stocks have been acting very strong in > the > > > recent market. > > > > > >Question: Is it the right to to look in to small cap > stocks > > > > > >WmONEIL: Historically, small caps have always performed > better. > > > However, in the last year, there has been a > shift in > > > larger cap stocks. > > > > > >Question: Today I received my first day subscription to > IBD. > > > What should I first do to "unlock" the papers > vast > > > information on investing? > > > > > >WmONEIL: Make sure you play the audio or video tape you > > > received. Study all the materials that we > provide so > > > that you truly understand how to use the unique > > > features in IBD You should also get a copy of my > book > > > because it explains in detail how to use the > paper in > > > your stock selections. > > > > > >Question: what is the Can Slim method? > > > > > >WmONEIL: The CAN SLIM method was based upon building > models of > > > successful stocks starting in 1953. We found > from > > > that that there were 7 basic characteristics > that > > > showed up year after year in these companies. > The C > > > was the first characteristic. It stand for > current > > > earnings per share being up a substantial > amount. The A > > > stand for annual earnings being up each year for > at > > > least the last 3 years at a rate of 25% or more. > The > > > N stand for New Highs, stocks coming out of > bases. It > > > also pertains to newer companies and companies > with > > > newer products. The S stands for Supply and > Demand. > > > The small to medium sized companies perform > better, > > > and you want to track volume figures very > carefully in > > > your stocks. Volume represents supply and > demand. 'The L > > > means you want leaders, not laggards. The > average > > > relative strength from all the models from 1953 > to now > > > showed an average relative price strength of 87 > at the > > > beginning point before the stocks had enormous > price > > > advances. The I stands for institutional > sponsorship > > > and the M stands for General Market. You want > to be > > > in a favorable market. > > > > > >Question: Do you go into a stock when it hits the 99 EPS > and 99 > > > Relative Strength or do you get into stocks that > look > > > like they are moving in that direction but are > in the > > > 70's at the present time > > > > > >WmONEIL: I would not buy a stock at 70 moving in that > > > direction. You want to have a minimum of 80 on > EPS > > > and RS normally. > > > > > >Question: What is your opinion of investment clubs? They > seem to > > > be real popular. > > > > > >WmONEIL: I think they're outstanding for people who want > to > > > learn more about investments, but you've got to > be > > > careful about the materials you're using. > People should > > > be using IBD and not several of the other > philosophies > > > that some investment clubs promote. > > > > > >Question: Do you use the CANSLIM formula regardless of > PE's, > > > even if they are outlandishly high... witness > QGENF, > > > EPS 99 RS 99 PE=123!! > > > > > >WmONEIL: Our model book study of all the big market > winners > > > showed that PE was not a cause of great > performance, > > > but an end effect of substantial earnings > increases. > > > Therefore, we look for major earnings and sales > > > growth, and we don't feel that PE's are that > critical. > > > > > >Question: I've been using your system for a few years now > with > > > good success. I've found the "M" in Can Slim the > hardest > > > to pick up on. We seem to be in a renewed bull > market > > > do you see this continuing for a while? > > > > > >WmONEIL: If you look at our general market page, the Dow > and > > > S&P are acting fine. Look for 5 or 6 major days > for > > > distribution. > > > > > >Question: In your book you say to limit your loss to 7 or > 8%. > > > In today's volatile market the stocks can move > more > > > than that in brief period of time. Is the 7% > figure > > > still realistic because there may be frequent > > > turnover. > > > > > >WmONEIL: The key is to learn to read charts and buy a > stock > > > exactly right off a base at a buypoint. If you > do > > > this, the stock will rarely drop 8% If on the > other > > > hand, you don't use charts or buy stocks that > run up or > > > are extended, you are vulnerable to shakeouts > that > > > occur. The point is to buy the stock right and > you > > > don't have that trouble. Also, the 8% pertains > to > > > cutting an actual loss. It does not pertain to > when > > > you have a substantial profit. Once you're > ahead > > > signfiicantly, you can give a stock much more > room for > > > normal fluctuation. > > > > > >Question: how much is too much institutional sponsorship? > > > > > >WmONEIL: We don't have a precise number. Stocks like > Coca Cola > > > and Phillip Morris for many years have had huge > > > sponsorship and have continued to perform well. > > > > > >Question: Where do you go first after you think a stock > looks > > > good and what is the process of research you go > > > through? > > > > > >WmONEIL: I analyze a daily and weekly chart carefully to > make > > > sure a stock is under accumulation to make sure > it is > > > acting proper. I then check out every element > of > > > CANSLIM making sure that the earnings, sales and > other > > > v variables are all strong. Next, I would want > to > > > read up a little bit to understand what the > company > > > makes, what they do, what the basic story is. > What is > > > it that is so unusual that should make this > company do > > > well. > > > > > >Question: Should the average investor be in for the long > haul or > > > take quick profits when they arise > > > > > >WmONEIL: I don't think either is the right answer. You > try to > > > buy stocks that are great companies and great > earnings > > > and great sales at the right time, and you hold > them > > > as long as they're acting well. Some may be > held for > > > a few months. Some for several years. > > > > > >Question: one problem I have with canslim is that I get to > many > > > selections - how do you handle this > > > > > >WmONEIL: Try to concentrate in the industry group that's > > > leading the market. One way you can tell this is > by > > > looking at IBD 'IBD's new high list which is > ordered > > > by the industry groups with the most stocks > making new > > > highs. The top 6 or 7 groups in this new high > list > > > are your leading sectors. > > > > > >Question: Bill , DO You Ever Short a Stock or BUY / Sell > > > Options? Great paper .... > > > > > >WmONEIL: I don't want to short unless I think I'm in a > bear > > > market. Why fight the general direction of the > > > market? I don't buy options. If you want to buy > options, > > > I think you should limit them to 10 to 15% of > your > > > portfolio because they're all or nothing bets. > > > > > >IBD Jim: **You are live with William O'Neil** Please use > the > > > interact key to post questions. > > > > > >Question: How do you know if you have truly missed an > > > opportunity and should wait? How does a stock > who has > > > exhibited a consistent rise, especially this > market, off > > > its base? > > > > > >WmONEIL: Normally you want to buy a stock when it's > breaking > > > out of a base and up 5% and then stop. > Sometimes you > > > can buy a stock on its first correction. If > it's a > > > great growth stock, you can buy it on the first > 20% > > > correction sometimes. Or if it pulls back to > its 10 > > > week moving average line. Furthermore, if the > stock > > > is really great, it will probably build another > base, > > > and you will have another shot at it in time. > > > > > >Question: how do you make money in a down market? > > > > > >WmONEIL: No one makes much money in a down market. > You're > > > usually selling a few stocks and playing more > > > conservative. Aggressive people might try > shorting. > > > > > >Question: Bill, are you saying anyone can be a great stock > > > picker? > > > > > >WmONEIL: No. I don't believe that, because most people > are not > > > willing to do the concentrated work and study to > be good > > > at it. > > > > > >Question: Should an averag einvestor forget about stocks > and > > > stick with mutual funds? > > > > > >WmONEIL: I believe that somebody who is willing to put in > the > > > time and effort to learn it can do well. It may > take a > > > process of two to three years to learn it. The > > > average investor would probably do better by > buying a > > > growth fund and never selling it However, if > you're > > > dedicated and willing to do the work, you could > do a > > > much better job. > > > > > >Question: What determines small, mid, and large cap? > Everyone > > > has a different standard. > > > > > >WmONEIL: Generally companies with less than 20 million > share > > > outstanding are considered small. Companies > with > > > 20 to 60 million shares might be considered mid > cap. > > > Those will 100 million might be considered large > cap. > > > These are generalities. > > > > > >Question: i am new to investing..what book should i buy > > > > > >WmONEIL: My book, How To Make Money In Stocks. Read it. > Take > > > notes in it. We are also producing video tapes > that > > > all subscribers to the paper should receive in > the next > > > 30 days or so. You should also check this out. > > > > > >Question: If an investor has limited time, what would be > the > > > most importan information to access on a daily > basis > > > as far as market indicators? > > > > > >WmONEIL: Learn to study the General Market page in IBD. > and > > > check out the day to day price and volu volume > movements > > > in the Dow, S&P, and Nasdaq. That's more > valuable > > > than dozens of other indicators, such as > > > Advance/Decline lines, overbought/oversold > indicators, > > > etc. > > > > > >Question: Should I ignore the general economic news and > market > > > when using a specific stock picking method such > as > > > yours? > > > > > >WmONEIL: Economic indicators are a very poor way to try > and > > > judge the stock market. Markets anticipate and > discount > > > data, and you should use market measurements not > > > economic measurements. > > > > > >Question: When is the best time to buy stocks featured in > the > > > New America? They often have jumped a point or > two as > > > soon as the market opens. > > > > > >WmONEIL: The New America stories are only available in > our > > > print edition. These are not recommendations. > > > They're just stories on unique, growing, newer > > > companies. I would immediately look at a chart > to > > > see if these stocks are in a buying area or if > they're > > > in an extended area, and therefore more risky. > > > > > >Question: Where can I find the defiinition of the "Cup and > > > Handle" and what it means? > > > > > >WmONEIL: Check out our education modules here on AOL. > Also, we > > > have a great deal of chart information in my > book, as > > > well as the 45 minute video I mentioned earlier > which > > > will go out to all IBD subscribers. > > > > > >IBD Jim: can you tell us more about the videos you are > coming > > >out ------------------------------ End of canslim Digest V1 #230 ***************************** To subscribe to canslim Digest, send the command: subscribe canslim-digest in the body of a message to "majordomo@xmission.com". 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