From: canslim-owner@xmission.com (canslim Digest) To: canslim-digest@xmission.com Subject: canslim Digest V1 #292 Reply-To: canslim@xmission.com Sender: canslim-owner@xmission.com Errors-To: canslim-owner@xmission.com Precedence: canslim Digest Saturday, September 13 1997 Volume 01 : Number 292 In this issue: [CANSLIM] Steel Producers group [CANSLIM] MSON, SOCR Re: [CANSLIM] The Bear has scratched on my front door. Re: [CANSLIM] Steel Producers group Re: [CANSLIM] DSPG Re: [CANSLIM] The Bear has scratched on my front door. [CANSLIM] HYSW/First Albany [CANSLIM] New members of group [CANSLIM] Intro : Michael Boone Re: [CANSLIM] New members of group Re: [CANSLIM] Beta testing software Re: [CANSLIM] Intro : Michael Boone Re: [CANSLIM] Intro: Bill Chesky; SMTC Re: [CANSLIM] Changing canslim header? [CANSLIM] Sam Funchess & Members RE: [CANSLIM] Distribution [CANSLIM] Improper acronym alert! Re: [CANSLIM] Intro : Michael Boone Re: [CANSLIM] I disagree with (The Bear has scratched on my front door.) Re: [CANSLIM] Intro : Michael Boone [CANSLIM] Ascend. What to do? 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: Fri, 12 Sep 1997 21:52:15 -0400 From: "Tom Worley" Subject: [CANSLIM] Steel Producers group Now that I am out of Beth Steel, won't be following this group any longer, but did want to mention to any still in this group that over the past week have seen several cos having their earnings forecast cut by analysts. I suspect the past two qtrs of solid performance and beating estimates may be coming to a close. Be careful. Any statements or opinions are strictly my own and not that of my employer. My comments should not be interpreted 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. Hopefully my comments will better inform and educate all investors. tom w ------------------------------ Date: Fri, 12 Sep 1997 22:01:40 -0400 From: "Tom Worley" Subject: [CANSLIM] MSON, SOCR Just wanted the group to know, under EXTREME duress and mental anguish, had to sell half my position in MSON due to my stupidity in not realizing it was not marginable. Had to meet the call!! Wish I could make mistakes like this all the time - net gain after commissions and charges in three days was over 18%. Oh well, at least I still own half, and both stocks finished close to their new highs set today, so am looking for a good week coming up. Overall, portfolio is up over 10% for the week thanks just to these two gems. BTW, the chart on SOCR is an excellent example of the breakouts I am looking for (and finding) from very short bases (approx one week) on the small caps with good earnings and revenue growth and ridiculously low PEs. Much higher risk without question, need to keep a tight trigger finger on the sell button, and stay in touch with the mkt, but when it works, it works fast and profitably. Gosh, I almost feel like a day trader again, even if it was forced on me. Any statements or opinions are strictly my own and not that of my employer. My comments should not be interpreted 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. Hopefully my comments will better inform and educate all investors. tom w ------------------------------ Date: Fri, 12 Sep 1997 22:35:57 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] The Bear has scratched on my front door. Any statements or opinions are strictly my own and not that of my employer. My comments should not be interpreted 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. Hopefully my comments will better inform and educate all investors. Sam, could you elaborate on the distribution you saw? I just looked at the chart and the worst I saw was a possible minor breakout failing, and the stock returning to its logical short term support. All the major CS characteristics I looked at seemed to still be intact, including up/down ratio, timeliness, Adv/Decline, RS, EPS, etc. (or were certainly no worse than when the stock broke 29 and change). The RS line, after a minor downturn, seems to be moving more sideways than anything else. Granted, I have the benefit of another day or so of hindsight, but could you elaborate on what prompted your decision at that time? Disclosure: I don't now, nor have ever, owned a share, just have an interest in this one, and in understanding the decision making on it better. tom w - ---------- > From: Sam Funchess > To: Can Slim > Subject: [CANSLIM] The Bear has scratched on my front door. > Date: Friday, September 12, 1997 5:29 PM > > I have turned bearish on the market as of Thursday. I have liquidated > two of my "large cap" companies that have done me well and pyramided on > some of my smaller stocks. I am currently about 15% in cash looking to > short some of the larger companies. I noticed that IBM has dropped below > their 50 dma and am thinking the are a good candidate if they slip a > little more. > Connie Rae, I have sold my Iomega on Thursday for 25 and some change. > 20% profit, I saw some distribution late last week and early this week ------------------------------ Date: Fri, 12 Sep 1997 20:03:33 -0700 From: Tim Fisher Subject: Re: [CANSLIM] Steel Producers group At 09:52 PM 9/12/97 -0400, you wrote: >Now that I am out of Beth Steel, won't be following this group any >longer, but did want to mention to any still in this group that >over the past week have seen several cos having their earnings >forecast cut by analysts. I suspect the past two qtrs of solid >performance and beating estimates may be coming to a close. Be >careful. > LSS is if anything skyrocketing this week. Guess they are tied to oil services and that is the reason? Ditto with MAVK, although they seem to be taking a small hit the past 2 days. Tim Fisher, 1995 President, Pacific Fishery Biologists Ore-ROCK-On Rockhounding Web Site PFB Information tfish@spiritone.com WWW http://www.spiritone.com/~tfish -- See naked fish and rocks! ------------------------------ Date: Fri, 12 Sep 1997 22:43:46 -0400 From: "Frank Ferris" Subject: Re: [CANSLIM] DSPG I like the looks of DSPG thanks - ---------- > From: S Menon > To: canslim@mail.xmission.com > Subject: [CANSLIM] DSPG > Date: Friday, September 12, 1997 6:08 PM > > Check out DSPG. Looks like we will get another 10 points. UBS > Securities's target price is $40. > > Disclaimer: I have a small position in this and got rewarded very well. > > ______________________________________________________ > Get Your Private, Free Email at http://www.hotmail.com ------------------------------ Date: Fri, 12 Sep 1997 22:07:28 -0500 (CDT) From: dcameron@info1.harper.cc.il.us (Dave Cameron) Subject: Re: [CANSLIM] The Bear has scratched on my front door. Sam wrote: > > I have turned bearish on the market as of Thursday. I have liquidated > two of my "large cap" companies that have done me well and pyramided on I find this interesting.... to me, (who basically only owns small and mid cap stocks) I have found that most of my stocks either continue to hit new highs or flounder around in a trading range. > some of my smaller stocks. I am currently about 15% in cash looking to > short some of the larger companies. I noticed that IBM has dropped below > their 50 dma and am thinking the are a good candidate if they slip a > little more. > Connie Rae, I have sold my Iomega on Thursday for 25 and some change. > 20% profit, I saw some distribution late last week and early this week I'm wondering about this too.... IOM seems to be floundering around in a trading range. Looks like consolidation to me. > and decided to unload while there was price movement. Just curious if > you have sold or are you still carrying it. I also was curious if you > turn the same stocks everyday or do you hold them for a period of days? > I am just looking for the average time you hold your stocks. > > I just wanted to know if anyone feel the same I do. Guess not... but I don't pay much attention to large-caps. > In future, if someone would like a response from me please say so in the > message. I would like to respond to a lot more but it has become Respond if you like... I like to hear different thoughts. > increasingly difficult for me to read my mail, none the less respond to > all of them I would like to. > > Sam > sam5@mindspring.com > > Dave Cameron dcameron@info1.harper.cc.il.us > ------------------------------ Date: Fri, 12 Sep 1997 22:10:13 -0500 (CDT) From: dcameron@info1.harper.cc.il.us (Dave Cameron) Subject: [CANSLIM] HYSW/First Albany I own HYSW. It has an EPS of 93 and an RS of 91. Today it dropped supposedly because First Albany lowered their rating on HYSW, but it didn't drop the stock much. TO me this is a mixed bag. It is negative because a firm downgraded the stock, but positive in that it only dropped a couple percent. But... I've never heard of First Albany. Are they a small fry? Or am I just uninformed? Dave Cameron dcameron@info1.harper.cc.il.us ------------------------------ Date: Fri, 12 Sep 1997 22:12:04 -0500 (CDT) From: dcameron@info1.harper.cc.il.us (Dave Cameron) Subject: [CANSLIM] New members of group While I'm on a posting binge, I notice that there have been a lot of new members this week (or at least new intros). Almost all of these start off "I have been lurking for...". I would encourage you all to post even if it is just to ask questions. There have been many times where someone has branded themselves a novice, and many of us have found the exchange to be mutually beneficial... Dave Cameron dcameron@info1.harper.cc.il.us ------------------------------ Date: Fri, 12 Sep 1997 23:20:03 -0400 (EDT) From: midian@home.ifx.net Subject: [CANSLIM] Intro : Michael Boone Hello, my name is Michael Boone. I am a complete beginner when it comes to the stock market and investing in general. I have been studying the CANSLIM method as well as reading the Investors Business Daily. I haven't invested any money into the stock market at this point because I don't feel ready to fork over hard earned cash, so I've just been learning as much as possible and deciding on the best way to go about "practicing"(paper trails, online stock simulations, etc.) I appreciate any suggestions made, and ask that you not flame me if my questions seem stupid : as I said before, I am a complete beginner. Question #1 : The first section of Mr. O'Neils book makes sense to me until I get to the last letter M. This chapter was a complete departure from the simple methods outlined before it. The jargon used made absolutely no sense to me, and it seemed like the chapter offered only random events that have occurred in changes in market direction; there seemed to be no clear-cut plan to follow in determining whats going on in the market(this is disheartening considering Mr. O'Neils claim that M is "50% of the ballgame." Is it just me? Question #2 : Can anyone explain to me how to see the "Cup and Handle" pattern in a graph? I have yet to be able to identify one. Thanks for your patience and suggestions! michael boone ------------------------------ Date: Sat, 13 Sep 1997 08:02:04 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] New members of group Well said, Dave. Couldn't agree more. Everyone is welcome, even novices at investing or CANSLIM (remember, we were all novices once). Any statements or opinions are strictly my own and not that of my employer. My comments should not be interpreted 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. Hopefully my comments will better inform and educate all investors. tom w - ---------- > From: Dave Cameron > To: canslim@mail.xmission.com > Subject: [CANSLIM] New members of group > Date: Friday, September 12, 1997 11:12 PM > > While I'm on a posting binge, I notice that there have been > a lot of new members this week (or at least new intros). Almost > all of these start off "I have been lurking for...". I would > encourage you all to post even if it is just to ask questions. > There have been many times where someone has branded themselves > a novice, and many of us have found the exchange to be mutually > beneficial... > > Dave Cameron > dcameron@info1.harper.cc.il.us > ------------------------------ Date: Fri, 12 Sep 1997 20:25:04 +0000 From: "Lost" Subject: Re: [CANSLIM] Beta testing software Tom, Thanks for solving my problem. I followed your suggestion and did get a user ID for DG online. Lost ------------------------------ Date: Sat, 13 Sep 1997 08:39:35 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] Intro : Michael Boone Welcome to the group, Michael. The only stupid question is the one you didn't ask, and it is also usually the one that will cost you money. And don't worry about flaming, which is not acceptable or tolerated here. A number of us have a fire extinguisher handy, and an abusive member of the group is likely to either be censored or an ex-member. This group is so mature and well behaved compared to usenet groups it's sometimes hard to believe it's actually on the internet. Understanding "M" in CANSLIM is undoubtedly to most the toughest item. I have been in the mkt for 40 years, seven of which as a broker, and it took me most of those just to understand M where I felt reasonably confident of my knowledge (OK, so I'm a slow learner) but still I make mistakes. One of the members posted a chart of the mkt taken from one of WON's seminars complete with the different signals and pivot points. Possibly someone can repost the address for our new members to study. The most basic part of M is to know the trend of the mkt (up, down, consolidating, correcting). From there, you want to pay attention to the trend of a sector or industry group that you are considering, since not all groups or stocks are going the same way. You also want to be aware if there is a sector rotation, for example currently it appears that money is shifting from big caps to secondary and small caps, thus you should be careful if you are considering a large cap stock. It may not go down much more, but is less likely to make a solid move up. My personal focus over the past ten years has been in trying to understand the dynamics of the market (e.g. WHY did the mkt go up or down - yeah, I know, more buyers than sellers) with special emphasis on the relationship between the market and economic reports, precious metals, bond market, and currency exchange rates. From this I try to keep this group informed of upcoming economic reports and what is expected, since the mkt will react according to whether the news is in line, or better or worse than expectation. I use this info to try and gauge both the short and longer term direction of the mkt. Bottom line, it is not necessary to fully understand the WHY part, just be able to understand the current state of the mkt direction, and to recognize when that changes. Any statements or opinions are strictly my own and not that of my employer. My comments should not be interpreted 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. Hopefully my comments will better inform and educate all investors. tom w - ---------- > From: midian@home.ifx.net > To: canslim@xmission.com > Subject: [CANSLIM] Intro : Michael Boone > Date: Friday, September 12, 1997 11:20 PM > > Hello, my name is Michael Boone. I am a complete beginner when it > comes to the stock market and investing in general. I have been studying > the CANSLIM method as well as reading the Investors Business Daily. I > haven't invested any money into the stock market at this point because I > don't feel ready to fork over hard earned cash, so I've just been learning > as much as possible and deciding on the best way to go about > "practicing"(paper trails, online stock simulations, etc.) I appreciate any > suggestions made, and ask that you not flame me if my questions seem stupid > : as I said before, I am a complete beginner. > Question #1 : The first section of Mr. O'Neils book makes sense to > me until I get to the last letter M. This chapter was a complete departure > from the simple methods outlined before it. The jargon used made absolutely > no sense to me, and it seemed like the chapter offered only random events > that have occurred in changes in market direction; there seemed to be no > clear-cut plan to follow in determining whats going on in the market(this is > disheartening considering Mr. O'Neils claim that M is "50% of the ballgame." > Is it just me? > Question #2 : Can anyone explain to me how to see the "Cup and Handle" > pattern in a graph? I have yet to be able to identify one. > > Thanks for your patience and suggestions! > michael boone > ------------------------------ Date: Sat, 13 Sep 1997 08:57:00 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] Intro: Bill Chesky; SMTC Welcome to the group, Bill. I will try to take a look at SMTC this weekend and post my thoughts. I can't recall WON saying anything about how much a stock has gained over the past 1-2 years, certainly not in a negative sense at least. It's more important how it is doing today, and what the expectations are for the future. He is a very forward looking guy, which is one reason he ignores trailing PE, that's already history. Personally, I am looking for stocks with very small nr of shares and float, preferably under 10 mil issued with a float no larger than about 4 mil or so. The ones I like the best right now only have floats of 1-2 mil. Like I said in an earlier post last night, greater risk, but potentially greater reward, but you must stay in touch with the mkt and have a quick sell trigger finger. But I feel this is where the money is flowing, and it has only started. And because of the small nr of shares, often with no way to play an arbitrage (e.g. no convertible bonds or options to use to hedge a short position) there is little to hold them back so long as the fundamentals are excellent and the future rosy (it's easy to write this after this past week's performance in MSON and SOCR, wait till I've had my head handed to me on one and watch me get negative!). Any statements or opinions are strictly my own and not that of my employer. My comments should not be interpreted 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. Hopefully my comments will better inform and educate all investors. tom w - ---------- > From: chesky@austin.ibm.com > To: CANSLIM mailing list > Subject: [CANSLIM] Intro: Bill Chesky; SMTC > Date: Friday, September 12, 1997 2:35 PM > > Hi, > > I've been lurking for about a month or so and just thought I'd take a > few moments to introduce myself. I'm a computer programmer by > profession. I've been investing in mutual funds for about 8 years > now. About 1.5 years ago or so I finally got the nerve up to invest in > individual equities, lured by the potential higher returns. I've had > modest success but I attribute some of that to a very forgiving market > > Before joining the group I made one psuedo-CANSLIM pick: MCRL. It's > done well for me; up about %40 in 2 or 3 months. I say psuedo-CANSLIM > because I'm sure I didn't include all of the CANSLIM criteria in my > selection process. Basically, I culled IBD for about 20 stocks with > good EPS/RS/etc numbers. Then using my internet account, I checked out > historic annual/quarterly EPS growth, researched overall market > direction (still seems like black magic to me). Then I did some > fundamental research: read company profiles, checked out news articles, > visited web sites, etc. Finally, I flipped a coin. Ha! Just > kidding. Actually at this point MCRL left me with the best "intuitive" > impression of the stocks I researched so I bought it. It seems that > you experienced CANSLIM-ers rely on chart reading quite a bit, though, > which I did not really do. I will be reading all those posts with > great interest. In any case, when I joined the group I was very glad > to see people discussing MCRL. > > throw out this stock for discussion: SMTC (Semtech). Don't have my > IBD handy but I think EPS/RS is 99/98 and the other numbers were very > good as well. Like MCRL, they're in the analog IC market. Their P/E > is a lot less than MCRL's, though at about 40. They also have a smaller > capatalization (~365 million). However, they've had a huge runup over > the last year from 8 to 64. Is it too late? Or does CANSLIM say that > this is the best time to buy (when it's reaching new highs)? > ------------------------------ Date: Fri, 12 Sep 1997 16:07:54 -0500 (CDT) From: "Jason P. Butler" Subject: Re: [CANSLIM] Changing canslim header? Wouldn't it be alot easier and cheaper for the admin to just change one field (probably) in his program rather than for many users to purchase new e-mail clients? that would be the most efficient, time saving, and dollar saving course of action. How about that for responsibility of actions? On Fri, 12 Sep 1997, Robert Gammon wrote: > Well, I consider that changing the name JUST to make the > subject line more readable on SOME subscriber's mail tool > to be a bit of a stretch. There are many mail tools for > each of the platforms that people use. Selection of > a mail tool is sometimes complicated by the fact that > you are virtually forced to use the one that your > employer shoves down your throat. I made my own decision, > and paid for the mail tool with my own dollars. If I > had problems reading the subject line because of the > length of the majordomo header, I would go find a mail > tool that would show me the needed parts of the subject > line, not complain to the group or the administrator. > > So many problems in America today seem to stem from the > attitude that none of my problems are my fault, they > are always some else's fault. We need greater > responsibility for individual actions, not less. > > Robert > =================================================== > On Fri, 12 Sep 1997 14:46:00 -0700, Sam Funchess wrote: > > >I imagine the reason they wanted the header changed is so you could read > >the subject w/o going into the message. I see no problem of doing this > >because I would understand who it came from even w/o the CANSLIM header. > > > >Sam > >sam5@mindspring.com > >Michael A Langston wrote: > > > >> > One of the members of our list has suggest that I change the > >> [CANSLIM] field > >> > that always appears in the subject field to something shorter like > >> [CS]. Does > >> > anyone have any objections or comments? > >> > >> i suggest you leave it CANSLIM jeff -- i see no gain in redefining > >> an acronym so well known and widely recognized -- moreover, CS has > >> too many meanings already (not surprisingly, the term Computer > >> Science comes to my mind, just check my email address) > >> > >> mike > > > > > > > > > > > > ------------------------------ Date: Fri, 12 Sep 1997 18:21:59 -0400 From: Connie Mack Rea Subject: [CANSLIM] Sam Funchess & Members From: Sam Funchess 17:29 Subject: [CANSLIM] The Bear has scratched on my front door. To: Can Slim I have turned bearish on the market as of Thursday. I have liquidated two of my "large cap" companies that have done me well and pyramided on some of my smaller stocks. I am currently about 15% in cash looking to short some of the larger companies. I noticed that IBM has dropped below their 50 dma and am thinking the are a good candidate if they slip a little more. Connie Rae, I have sold my Iomega on Thursday for 25 and some change. 20% profit, I saw some distribution late last week and early this week and decided to unload while there was price movement. Just curious if you have sold or are you still carrying it. I also was curious if you turn the same stocks everyday or do you hold them for a period of days? I am just looking for the average time you hold your stocks. I just wanted to know if anyone feel the same I do. In future, if someone would like a response from me please say so in the message. I would like to respond to a lot more but it has become increasingly difficult for me to read my mail, none the less respond to all of them I would like to. Sam sam5@mindspring.com Sam-- Thanks for the questions about IOMG, etc. To your First Question, Sam: IOMG jerked me around a bit in the middle of August. Was in and out twice in three days. Ended up in, and am still holding a partial position. I am looking for a way out with a couple of points. It was, I believe, Surinduh [forgive me for the spelling, but I clear out my mail at the end of the day] who had asked me about some stocks he was holding. On Tuesday, I told him that a couple of my trader friends and I were trying to be absolutely liquid by Friday. We thought, and still do think, that the short term is down. For us, that is 3-10 days, but we'd not be surprised if the feeling ran out beyond the 10 days. We hoped to be filtering for shorts and ready to take a 50% short position in our accounts by Monday. Arbitrarily, we choose not to short more than a 50% position. I thought I would be free from IOMG even before you jumped. Though it is still a hold by my indicators, I just have a feeling about the market, and, consequently, tech stocks--and any other high beta stocks. I think you did right, Sam. Mine will be gone Monday, no matter what--even in the light of today's turn. I haven't had time to read the market yet this afternoon. To your Second: I have held IOMG five, maybe six, times in 23 days. My longest hold was eight days; my shortest was two. As you know I prefer to be a pure day trader. But purity is a sin. I like trying to outguess daily high|lows, and I like nothing better than to be in and out twice in one day. As I said, that is a once a month happening; and if it doesn't happen that often, I never try to double up. Having said that, my two friends [who fortunately have nearly identical trading strategies and use mostly the same software--mostly devised by a friend of mine at the university] and I trade on indicators set up on pretty short parameters. We, consequently, get a good jerking around once in a while [as in IOMG last month]. What we hope to find is stock that has a high beta [1.5 or higher], get in at the right time [remember, we have inviolate 7-8% stop loss setting on every stock], and get a ride. I mentioned in an earlier post, that once I have a gain equall to my stop in a stock, I will never take a loss. I move my stops such that I either break even or come up with a profit, no matter how small. You can see that, because of our sensitive indicator settings and inviolate stops, we, only once while, get in at the most opportune price; but, if the stock has three or four days of candlestick green, we've made some money real fast. But short that occasional fast money stock, we hold until we get a sell. Each of my friends and I do sometimes change our indicators--setting them up to be less sensitive, especially if nothing unexpected appears to be happening. But even in this remarking of indicators, we never cheat so that a loss can be massaged into break even or profit. Sam, as you learn to trade with tighter and tigher indicators [start out with intermediate settings], be less concerned that you are acting like a day trader and more concerned that you are listening to your indicators, irrespective that you are holding longer than a day trader would. "Day trader" is a purity word. It is romanticized. It is a succubus. Beware of her. I have held the bitch. And she turned me loose for the next day trader who thought he could conquer her; and she never even looked back at me as she departed. We had some great times together, the succubus and I, but don't ever take her home with you. She has no home and a thousand weeping lovers. Perhaps, most important, Sam, is to get to know five stocks that have not "lied" to your indicators; run scans on their history. A stock that will lie once is inclined to lie again--a bit like people. I have a flexible rule that I look back a year and a half to two years. If the stock hasn't lied, and it meets my requirements, I give it a ride. When it lies, I treat it the same way the succubus treated me [though I have given a couple of stocks a second chance when I thought there had been some misunderstanding about how published reports were interpreted]. Always a pleasure to take to you, Sam, and to the other members. Please mail me if I have not answered you fully or if you have some other thoughts about the market. Respectfully, Connie Mack ------------------------------ Date: Thu, 11 Sep 97 19:15:28 UT From: "Paul Bienstockr" Subject: RE: [CANSLIM] Distribution How do you define distribution and is this based on volume? Further, is this something that you can do real-time or is it really determined retrospectively? - -----Original Message----- From: owner-canslim@xmission.com On Behalf Of Dbphoenix@aol.com Sent: Thursday, August 28, 1997 3:09 PM To: canslim@mail.xmission.com Subject: Re: [CANSLIM] Distribution In a message dated 97-08-28 08:07:29 EDT, you write: << In my studies, I have found that five or more days of distribution in a four week period often leads to a meaningful correction. I have also been forced out of half of my positions in the past two weeks due to my selling rules, which I have found to be an indicator of forthcoming poor market action. >> Take care when using your own portfolio as an indicator of the health of a market, much less as an indicator of future market action. Much depends on what you've got. I've only lost one stock in the past couple of weeks. Does this mean everything's OK? Who knows? I suggest that everyone let CS work for them. As your stops are hit (if they are), then exercise them. If they aren't, why sell? To "lighten up" or "exit" just because "things look bad" is to defeat the purpose of CS's money management aspects. And even if you do wind up selling something, that doesn't mean you should stop looking. You may simply be in the wrong sector. My oil stocks are barrelling ahead like a juggernaut. My health stocks are also doing well, though not as well. My tech stocks are sort of just lying there for the most part, but that's hardly a reason to sell them. Many people find it difficult to buy back a stock once sold. Far easier to hang on to it, unless the stop is triggered, then add to the position during the next leg up. - ----Db ------------------------------ Date: Sat, 13 Sep 1997 08:17:59 -0600 From: "Jay Cliburn" Subject: [CANSLIM] Improper acronym alert! > Remember that CS is not necessarily smallcap. That's CANSLIM Db -- not CS. Get your acronyms squared away. :-) Couldn't resist. - -- Jay Cliburn | Space Dynamics Laboratory Computational Sciences Division | 1747 North Research Park Way Jay.Cliburn@sdl.usu.edu | Logan, Utah, USA 84341 (801) 755-4317 (voice) | (801) 755-4366 (fax) New telephone numbers effective 22 September 1997 (435) 797-4317 (voice) (435) 797-4366 (fax) ------------------------------ Date: Sat, 13 Sep 1997 10:52:01 -0500 From: "Bill S." Subject: Re: [CANSLIM] Intro : Michael Boone Maybe an introduction to MOB PSYCHOLOGY would help, Tom. In the old days, the term was PROPAGANDA, and then later refined to as MARKETING. The market's direction is determined by what the OPINION leaders are disseminating and not so much on technical factors. The MOB listens to OPINION leaders. e.g. the likes of Greenspan, Ruben, Lynch, James, etc. Bill-->> - -------------------- Tom Worley wrote: > My personal focus over the past ten years has been in trying to > understand the dynamics of the market (e.g. WHY did the mkt go up > or down - yeah, I know, more buyers than sellers) with special > emphasis on the relationship between the market and economic > reports, precious metals, bond market, and currency exchange rates. ------------------------------ Date: Sat, 13 Sep 1997 12:10:04 -0400 (EDT) From: Dbphoenix@aol.com Subject: Re: [CANSLIM] I disagree with (The Bear has scratched on my front door.) In a message dated 97-09-13 04:55:07 EDT, you write: << IMHO, the "groundswell" of money that has thus far been flowing into the secondaries and small caps is simply the early signal of a tidal wave of money that will be coming in thru the end of this year at least. >> I agree, Tom. We go on and on about interest rates and earnings and overbought this and that but the fact is that as long as peole continue to throw money at funds, it's got to go somewhere. Therefore, more than ever, it's a market of stocks rather than a stock market. The NAZ may no longer reflect the fortunes of smallcap companies. There are plenty of companies on the NAZ that are considerably larger than many companies on the NYSE. Weighted as they are, I'm not even sure that the index is any longer an adequate measure of small cap performance, perhaps one of the reasons so many people are looking to the Russell 2000 these days. I suspect the performance of the oils is due at least in part to a bit of desparation on where to put all this money. - -----Db ------------------------------ Date: Sat, 13 Sep 1997 12:32:17 -0400 (EDT) From: Dbphoenix@aol.com Subject: Re: [CANSLIM] Intro : Michael Boone In a message dated 97-09-13 09:00:28 EDT, you write: << Bottom line, it is not necessary to fully understand the WHY part, just be able to understand the current state of the mkt direction, and to recognize when that changes. >> I sometimes feel like a lone voice in the wilderness on this subject. Whenever there's a new high in something or deterioration in something, everyone starts asking about "M" and how to perceive the "signals" that we're in trouble. O'N and others really aren't much help here. He and others are particularly adept at pointing to pivot points, signals, follow-through days (or lack of them), etc., in hindsight, but are notably silent as they are occurring. To be sure, there are plenty of people who will make pronouncements of one sort or another so that they can refer back to a particular post at some point and say "See, I was right!" (you rarely see anyone point back to a particular post and say "See, I was wrong!"). But these don't mean much. CS is like an insurance policy. As long as you have your stops set and the discipline to exercise them, and as long as the charts of your particular stocks look fine, there's no reason to exit prematurely. When we get into serious trouble, your stops will be triggered one by one and you'll be able to make an orderly exit from the market. At the same time, you'll find it difficult to find anything else to buy. Support lines will be violated, bases will deteriorate, rallies will fail. You will, on the whole, automatically be out. It seems to me that the point O'N is trying to make is that trying to apply CS principles to a bear or deteriorating market is largely a waste of time. They won't work. But using CS to *anticipate* all this is tricky and probably so difficult as to be pointless. How many times have you sold a stock out of fear of deterioration, either through panic or by raising a stop, only to find it bounce off an important support level and go right back up again? CS is not only an investment strategy, it is a portfolio management strategy as well. I suggest we allow it to do its work. The fact that a particular sector or index is deteriorating (or even several sectors or indices) does not necessarily mean that everything is deteriorating everywhere. - ----Db ------------------------------ Date: Sat, 13 Sep 1997 12:59:30 -0400 From: Connie Mack Rea Subject: [CANSLIM] Ascend. What to do? Members-- Two members have sent inquiries to me about ASND. One wondered about selling. The second wondered about buying. These were my comments to them. I have never held or traded ASND. But for my non-trading account [a standard account that is more inactive than active] I had watched the stock since it fell out of bed, and especially I listened to what were offered as causes for the decline. From them I inferred that things were not as bad as they appeared. Of course, my short term indicators looked as awful as the chart, but that was to be expected. From the chart, back a couple of years, it appeared that 31 was a fairly safe resistance. Indicators I look at carefully, for either short or long term, are Bollinger Bands and RSI. This is how I use them. The bands can be set, as Bollinger suggested to moving averages [MA] of 10, 20, and 50 days [respectively, short, intermediate, and long]. My friends and I set our Bands between 1.5 and 2 standard deviations [SD] for short term MA. There is no reason why you can't set your SD out to 2.5--whatever fits your style, if that is the word. One of my trader friends uses MACD rather than RSI. I see no reason why one couldn't use other indicators. It would seem to me that as long as one is not using indicators based on the same data, the result might be useful. I.e., I wouldn't use RSI and MACD, for they are based on quite similar data. Here would be an area that one of the members might pursue. When the price gets to the upper Band and RSI is under 70, I read this conjunction as a continuing trend. When price gets to the lower Band and RSI is above 30, that, too, implies a continuing trend. Then there is this counter context. When price again is at the upper Band, and RSI is above 70 and inclining to 80, a reversal is being prepared. When price is again at the lower Band, and RSI is below 30 and declining to 20, a reversal is being prepared. I see ASND as prepared for a reversal. This is how I am playing it. Yesterday, I waited until five minutes before closing to see what the stock was doing. I had hoped it would lose another 1/2 point or so. However, I bought 200 at the market [35.25]. Next week I will buy 100 @ 34, 100 @ 33, 100 @ 32, and 200 @ 31 [if available]--which allows me to hold 700 shares at approximately 33. There is no reason why one couldn't buy 100 at yesterday's close on Monday and then buy a 100 @ 33 and a final 100 @ 31 given the opportunity. I have no set hold time for the transaction but would be inclined to let ASND jell for at least a month or until next quarter results are whispered. If the stock gets a five point bounce and I held only 200, I'd probably let it go but would buy it back at 37-38. If I were to have got my whole 700 on the buy down to 31 [I'd be averaged in at 33], I would absolutely let it all go, but would still buy it back at 37-38. However, I'd only buy 300-400, for I have made a nice profit and will not under any circumstance ever take a loss once I have a profit. To my first inquirer [who didn't say what he owned ASND at], I suggested that he hold. If there did come a bounce, I suggested that he sell if he could get even or close to even; for once a stock has betrayed you, you never feel the same about it again. To my second inquirer, I told him what I intended to do under certain circumstances for the short term and for circumstances in the longer term. I thank the two members for their questions and always welcome questions or comment from other members. Respectfully, Connie Mack ------------------------------ End of canslim Digest V1 #292 ***************************** 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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