From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #2252 Reply-To: canslim Sender: owner-canslim-digest@lists.xmission.com Errors-To: owner-canslim-digest@lists.xmission.com Precedence: bulk Content-Transfer-Encoding: quoted-printable X-No-Archive: yes canslim-digest Friday, March 29 2002 Volume 02 : Number 2252 In this issue: Re: [CANSLIM] CSTR Re: [CANSLIM] Intro... [CANSLIM] MGAM Re: [CANSLIM] Intro... [CANSLIM] More on Stop Losses... [CANSLIM] spreadsheet Re: [CANSLIM] spreadsheet Re: [CANSLIM] More on Stop Losses... ---------------------------------------------------------------------- Date: Thu, 28 Mar 2002 23:02:36 -0500 From: "Tom Worley" Subject: Re: [CANSLIM] CSTR DGO shows last four qtrs earnings at -.03, -.02, +.07, +.05 on core operations. I haven't studied the balance sheet as it doesn't attract me, but sales growth does appear consistent in the trend on earnings. Tom Worley stkguru@bellsouth.net AIM: TexWorley - ----- Original Message ----- From: "Ian" To: Sent: Thursday, March 28, 2002 11:12 PM Subject: Re: [CANSLIM] CSTR Tom: But there aren't any actual earnings. They have never had any return on their equity that has been returned to the blance sheet - which is what companies with 'earnings' are supposed to do (in fact, this is meant to be the whole reason for investing, as 'your' equity as a shareholder builds). You are talking about a declining rate of losses - in a high-debt company in a declining interest-rate environment. What happens when interest rates tick up? I'm from Missouri on this one - I'd need to see a quickly growing balance-sheet to believe this one is for real. I guess it just ticks me off when a supposedly 'fundamentals' based indicator like IBD's EPS gives high marks to a company whose equity has been steadily shrinking. That all being said - it is clear to me that the high-beta momo funds are strongly supporting CSTR right now (it has an amazing LLUR chart pattern since May 2000), and could take it for quite a ride. Maybe they are right, and CSTR will suddenly trun into a high-growth cash-generating machine ... instead of a coin-eating, equity-destroying machine :) We'll see. Ian - ----- Original Message ----- From: Tom Worley To: Sent: Thursday, March 28, 2002 7:08 PM Subject: Re: [CANSLIM] CSTR > Ian, > > earnings have been sharply improved both for the two latest qtrs, last 4 > qtrs, and last five years. To me, without attempting the math on their > proprietary formula, an 80 seems low. Remember that the EPS Ranking (vice > straight EPS) is intended to measure rate of growth of earnings (e.g. > acceleration). > > Tom Worley > stkguru@bellsouth.net > AIM: TexWorley > ----- Original Message ----- > From: "Ian" > To: > Sent: Thursday, March 28, 2002 1:07 PM > Subject: Re: [CANSLIM] CSTR > > > Another example of mysterious IBD earnings rankings. How on earth does CSTR > get an '80' with ttm eps of 7 cents (and massive cumulative losses over the > years). It has been strong as a bull for over a year now, so it should have > a high RS - but earnings? They also have tons of debt - giving a > staggeringingly high 'enterprise value' for a niche business with no > earnings. I'm committed to making money shorting this one some day - but for > now, it sure seems to have a ton of support. > > JMHO. > > Ian > > > > > ----- Original Message ----- > From: Tim Fisher > To: > Sent: Thursday, March 28, 2002 9:37 AM > Subject: Re: [CANSLIM] DFXI > > > > Looks like it isn't going to hold the 52 wk hi. Never did like its chart, > > but nice numbers nonetheless. Also CSTR is staging a stealth B/O from a > HTF > > today. > > HGS numbers on both (don't complain if they don't match IBD, ,which they > > won't!): > > > > Symbol ERG E R G IGR A/D SMR Growth > > Curr Earn Cur:Prv Curr Sales Cur:Prv Proj > > Earn Industry Price Vol50 > > > > CSTR 252 80 91 81 A B D NA > 145 > > 164 26 23 550 COMM_MISC 31.73 3112 > > DFXI 279 99 91 89 A B A 136 54 > > 48 77 53 23 LEIS_PRODS 35.86 8117 > > > > > > At 10:03 AM 3/28/2002 -0500, you wrote: > > >Looks like a breakout for DFXI. Volume at 630,000 the first half hour > > >versus 810,000 daily average. Price up over $2.00. > > > > Tim Fisher > > Ore-ROCK-On Rockhounding Web Site > > Owner, Fisher Fisheries, Ltd. > > mailto:tim@OreRockOn.com > > WWW http://OreRockOn.com > > > > > > - > > -To subscribe/unsubscribe, email "majordomo@xmission.com" > > -In the email body, write "subscribe canslim" or > > -"unsubscribe canslim". Do not use quotes in your email. > > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. > > > > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Thu, 28 Mar 2002 23:03:42 EST From: Chazmoore@aol.com Subject: Re: [CANSLIM] Intro... - --part1_137.bd51a19.29d5419e_boundary Content-Type: text/plain; charset="US-ASCII" Content-Transfer-Encoding: 7bit Of all of the WON rules, the 8% sell has been the most important to me. I have no idea how many times I have had to sell, but it has had little effect on my capital account. Thanks to WON I was out of the market by May 2000 watching from the sidelines. I pull the trigger a littler quicker now if the market has been negative for three or four days in a row. On line transaction charges are low enough that I don't hesitate to sell if I just feel bad. It is a little more difficult to bail out when you are ahead, say 25% in the first 30 days. Charley - --part1_137.bd51a19.29d5419e_boundary Content-Type: text/html; charset="US-ASCII" Content-Transfer-Encoding: 7bit Of all of the WON rules, the 8% sell has been the most important to me. I have no idea how many times I have had to sell, but it has had little effect on my capital account. Thanks to WON I was out of the market by May 2000 watching from the sidelines.
I pull the trigger a littler quicker now if the market has been negative for three or four days in a row. On line transaction charges are low enough that I don't hesitate to sell if I just feel bad.
It is a little more difficult to bail out when you are ahead, say 25% in the first 30 days.

Charley - --part1_137.bd51a19.29d5419e_boundary-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Fri, 29 Mar 2002 08:34:46 -0500 From: "Leo Antons" Subject: [CANSLIM] MGAM This is a multi-part message in MIME format. - ------=_NextPart_000_001B_01C1D6FC.952AD740 Content-Type: multipart/alternative; boundary="----=_NextPart_001_001C_01C1D6FC.952AD740" - ------=_NextPart_001_001C_01C1D6FC.952AD740 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable VERY strong quarterly & Annual eps growth. leading stock in leading = industry (casinos & gaming), overall IBD anking of 99, 57% institutional = sponsorship...just a little high. Strong ROE. I'd appreciate opinions. Thanks, Leo - ------=_NextPart_001_001C_01C1D6FC.952AD740 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
VERY strong quarterly & Annual eps = growth.=20 leading stock in leading industry (casinos & gaming), overall IBD = anking of=20 99, 57% institutional sponsorship...just a little high. Strong=20 ROE.
 
I'd appreciate = opinions.
Thanks, = Leo
- ------=_NextPart_001_001C_01C1D6FC.952AD740-- - ------=_NextPart_000_001B_01C1D6FC.952AD740 Content-Type: text/x-vcard; name="Leo Antons.vcf" Content-Transfer-Encoding: quoted-printable Content-Disposition: attachment; filename="Leo Antons.vcf" BEGIN:VCARD VERSION:2.1 N:Antons;Leo FN:Leo Antons TEL;HOME;VOICE:740.373.8140 TEL;HOME;FAX:740.374.3996 ADR;HOME:;;1237 Cisler Drive;Marietta;OH;45750 LABEL;HOME;ENCODING=3DQUOTED-PRINTABLE:1237 Cisler = Drive=3D0D=3D0AMarietta, OH 45750 EMAIL;PREF;INTERNET:antons@charter.net REV:20020329T133446Z END:VCARD - ------=_NextPart_000_001B_01C1D6FC.952AD740-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Fri, 29 Mar 2002 08:41:47 -0500 From: "Rob Miller" Subject: Re: [CANSLIM] Intro... This is a multi-part message in MIME format. - ------=_NextPart_000_000E_01C1D6FD.8FDE1210 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Welcome JHS, I have used both methods over the years, but hard stops are all I use = now. While mental stops would sometimes allow me to miss an intraday = move below my stop, more often than not you just get out far below your = mental stop. I also use a risk based money management strategy, and = hard stops allow me to more precisely define my risk. The key is to set = your stop at a point where it is unlikely you will be stopped out, = unless the stock is clearly "broken". WON says that a winning stock = rarely drops more than 8% below a proper buy point, which is in effect = the pivot since he says to buy at or only slightly above the pivot. No = more than 5%. Before I enter a stock, I define my stop by looking at = the chart and deciding that if the stock hits this point then there is = clearly something wrong. If your pivot is $30, a stop of $29.90 is = probably too close, while $28.90 is unlikely if the stock is a winner. = It all depends on the chart. You can often get out sooner if the stock = begins pulling back on heavy volume. I try not to buy more than 8-9% = over my stop because that is where my risk/reward is best. I think of = my initial risk as the cost to buy the position. I'm not willing to = spend 15% to buy a position. I continue to use hard stops even after I = have moved the stop above breakeven (a free position), though my stops = are far enough away that they are unlikely to get hit during a normal = reaction. =20 Also, hard stops are less stressful. If, like me, you take only a few = positions, not knowing your exit can make leaving your computer = difficult. Rob =20 ----- Original Message -----=20 From: jhs=20 To: canslim@xmission.com=20 Sent: Wednesday, March 27, 2002 9:10 PM Subject: [CANSLIM] Intro... I'm another newbie, but have been lurking for sometime observing and = learning. I am not a Forbes referral, but one from a current/long-term = member. This has been a terrific site; it is a rare board that = maintains a sense of dignity as well as being informative. Thanks! I have been investing for several years, but with the assistance of a = broker. I finally decided to pull the plug because I felt I had too = little control. It irritated me no end that we never seemed to come to = some kind of sell rules agreement; hence I rode down more stocks than I = care to admit. I like the discipline of CANSLIM; for now I intend to = follow it pretty much to the letter until I get some more experience and = feel comfortable experimenting a bit. One question: CANLIM dictates a sell when the price drops 8% below = purchase cost (with some variation on the exact percentage). Do most = members write a stop loss order at the same time as the purchase order? = Or do you simply make a mental note and watch the market? I ask this = because I have been told that traders have access to the sell orders and = at times may actually manipulate the prices to the point that they can = dip down and pick off what is then a comparatively cheap stock. - ------=_NextPart_000_000E_01C1D6FD.8FDE1210 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Welcome JHS,
 
I have used both methods over the = years, but hard=20 stops are all I use now.  While mental stops would sometimes allow = me to=20 miss an intraday move below my stop, more often than not you just=20 get out far below your mental stop.  I also use a risk based = money=20 management strategy, and hard stops allow me to more precisely define my = risk.  The key is to set your stop at a point where it is = unlikely you=20 will be stopped out, unless the stock is clearly = "broken".  WON says=20 that a winning stock rarely drops more than 8% below a proper buy point, = which=20 is in effect the pivot since he says to buy at or only slightly above = the=20 pivot.  No more than 5%.  Before I enter a stock, I define my = stop by=20 looking at the chart and deciding that if the stock hits this point=20 then there is clearly something wrong.  If your pivot is = $30, a=20 stop of $29.90 is probably too close, while $28.90 is unlikely = if the=20 stock is a winner.  It all depends on the chart.  You can = often=20 get out sooner if the stock begins pulling back on heavy = volume. =20 I try not to buy more than 8-9% over my stop because that = is=20 where my risk/reward is best.  I think of my initial risk = as the=20 cost to buy the position.  I'm not willing to spend 15% to buy = a=20 position.  I continue to use hard stops even after I have = moved the=20 stop above breakeven (a free position), though my stops are far = enough away=20 that they are unlikely to get hit during a normal reaction. =20     
 
Also, hard stops are less = stressful.  If, like=20 me, you take only a few positions, not knowing your exit can make = leaving=20 your computer difficult.
 
Rob 
----- Original Message -----
From:=20 jhs =
Sent: Wednesday, March 27, 2002 = 9:10=20 PM
Subject: [CANSLIM] = Intro...

I'm = another newbie,=20 but have been lurking for sometime observing and learning.  I am = not a=20 Forbes referral, but one from a current/long-term member.  This = has been=20 a terrific site; it is a rare board that maintains a sense of dignity = as well=20 as being informative.  Thanks!
 
I = have been=20 investing for several years, but with the assistance of a = broker.  I=20 finally decided to pull the plug because I felt I had too=20 little control.  It irritated me no end that we never seemed = to come=20 to some kind of sell rules agreement; hence I rode down more stocks = than I=20 care to admit.  I like the discipline of CANSLIM; for now I = intend to=20 follow it pretty much to the letter until I get some more experience = and feel=20 comfortable experimenting a bit.
 
One = question: =20 CANLIM dictates a sell when the price drops 8% below purchase cost = (with some=20 variation on the exact percentage).  Do most members write a stop = loss=20 order at the same time as the purchase order?  Or do you simply = make a=20 mental note and watch the market?  I ask this because I have been = told=20 that traders have access to the sell orders and at times may actually=20 manipulate the prices to the point that they can dip down and pick off = what is=20 then a comparatively cheap = stock.
- ------=_NextPart_000_000E_01C1D6FD.8FDE1210-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Fri, 29 Mar 2002 10:02:26 -0500 From: "Cefaloni, John L Jr. [AMSTA-AR-WEA]" Subject: [CANSLIM] More on Stop Losses... This message is in MIME format. Since your mail reader does not understand this format, some or all of this message may not be legible. - ------_=_NextPart_001_01C1D732.BD02D2A0 Content-Type: text/plain; charset="iso-8859-1" Rob, You make an interesting point here. I also use hard stops and take my stop price into consideration when I buy. It is one of the criteria I use to determine, based on risk tolerance, how much I'm willing to pay. For example, if the b/o price is $30 and the stock is trading at $31, but the chart shows support (like 50 dma, an area of consolidation, a long term trendline, or some combination) at, say $27, then I will likely pass, even though the price is within 5% of b/o, simply because setting a stop somewhere below the "safe" price of $27 would mean taking on too much risk, i.e., greater than 8% loss if things go south. John C. - -----Original Message----- From: Rob Miller [mailto:rmiller2@carolina.rr.com] Sent: Friday, March 29, 2002 8:42 AM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] Intro... Welcome JHS, I have used both methods over the years, but hard stops are all I use now. While mental stops would sometimes allow me to miss an intraday move below my stop, more often than not you just get out far below your mental stop. I also use a risk based money management strategy, and hard stops allow me to more precisely define my risk. The key is to set your stop at a point where it is unlikely you will be stopped out, unless the stock is clearly "broken". WON says that a winning stock rarely drops more than 8% below a proper buy point, which is in effect the pivot since he says to buy at or only slightly above the pivot. No more than 5%. Before I enter a stock, I define my stop by looking at the chart and deciding that if the stock hits this point then there is clearly something wrong. If your pivot is $30, a stop of $29.90 is probably too close, while $28.90 is unlikely if the stock is a winner. It all depends on the chart. You can often get out sooner if the stock begins pulling back on heavy volume. I try not to buy more than 8-9% over my stop because that is where my risk/reward is best. I think of my initial risk as the cost to buy the position. I'm not willing to spend 15% to buy a position. I continue to use hard stops even after I have moved the stop above breakeven (a free position), though my stops are far enough away that they are unlikely to get hit during a normal reaction. Also, hard stops are less stressful. If, like me, you take only a few positions, not knowing your exit can make leaving your computer difficult. Rob - ----- Original Message ----- From: jhs To: canslim@xmission.com Sent: Wednesday, March 27, 2002 9:10 PM Subject: [CANSLIM] Intro... I'm another newbie, but have been lurking for sometime observing and learning. I am not a Forbes referral, but one from a current/long-term member. This has been a terrific site; it is a rare board that maintains a sense of dignity as well as being informative. Thanks! I have been investing for several years, but with the assistance of a broker. I finally decided to pull the plug because I felt I had too little control. It irritated me no end that we never seemed to come to some kind of sell rules agreement; hence I rode down more stocks than I care to admit. I like the discipline of CANSLIM; for now I intend to follow it pretty much to the letter until I get some more experience and feel comfortable experimenting a bit. One question: CANLIM dictates a sell when the price drops 8% below purchase cost (with some variation on the exact percentage). Do most members write a stop loss order at the same time as the purchase order? Or do you simply make a mental note and watch the market? I ask this because I have been told that traders have access to the sell orders and at times may actually manipulate the prices to the point that they can dip down and pick off what is then a comparatively cheap stock. - ------_=_NextPart_001_01C1D732.BD02D2A0 Content-Type: text/html; charset="iso-8859-1"
Rob,
 
You make an interesting point here.  I also use hard stops and take my stop price into consideration when I buy.  It is one of the criteria I use to determine, based on risk tolerance, how much I'm willing to pay. 
 
For example, if the b/o price is $30 and the stock is trading at $31, but the chart shows support (like 50 dma, an area of consolidation, a long term trendline, or some combination) at, say $27, then I will likely pass, even though the price is within 5% of b/o, simply because setting a stop somewhere below the "safe" price of $27 would mean taking on too much risk, i.e., greater than 8% loss if things go south.
 
John C.
-----Original Message-----
From: Rob Miller [mailto:rmiller2@carolina.rr.com]
Sent: Friday, March 29, 2002 8:42 AM
To: canslim@lists.xmission.com
Subject: Re: [CANSLIM] Intro...

Welcome JHS,
 
I have used both methods over the years, but hard stops are all I use now.  While mental stops would sometimes allow me to miss an intraday move below my stop, more often than not you just get out far below your mental stop.  I also use a risk based money management strategy, and hard stops allow me to more precisely define my risk.  The key is to set your stop at a point where it is unlikely you will be stopped out, unless the stock is clearly "broken".  WON says that a winning stock rarely drops more than 8% below a proper buy point, which is in effect the pivot since he says to buy at or only slightly above the pivot.  No more than 5%.  Before I enter a stock, I define my stop by looking at the chart and deciding that if the stock hits this point then there is clearly something wrong.  If your pivot is $30, a stop of $29.90 is probably too close, while $28.90 is unlikely if the stock is a winner.  It all depends on the chart.  You can often get out sooner if the stock begins pulling back on heavy volume.  I try not to buy more than 8-9% over my stop because that is where my risk/reward is best.  I think of my initial risk as the cost to buy the position.  I'm not willing to spend 15% to buy a position.  I continue to use hard stops even after I have moved the stop above breakeven (a free position), though my stops are far enough away that they are unlikely to get hit during a normal reaction.      
 
Also, hard stops are less stressful.  If, like me, you take only a few positions, not knowing your exit can make leaving your computer difficult.
 
Rob 
----- Original Message -----
From: jhs
Sent: Wednesday, March 27, 2002 9:10 PM
Subject: [CANSLIM] Intro...

I'm another newbie, but have been lurking for sometime observing and learning.  I am not a Forbes referral, but one from a current/long-term member.  This has been a terrific site; it is a rare board that maintains a sense of dignity as well as being informative.  Thanks!
 
I have been investing for several years, but with the assistance of a broker.  I finally decided to pull the plug because I felt I had too little control.  It irritated me no end that we never seemed to come to some kind of sell rules agreement; hence I rode down more stocks than I care to admit.  I like the discipline of CANSLIM; for now I intend to follow it pretty much to the letter until I get some more experience and feel comfortable experimenting a bit.
 
One question:  CANLIM dictates a sell when the price drops 8% below purchase cost (with some variation on the exact percentage).  Do most members write a stop loss order at the same time as the purchase order?  Or do you simply make a mental note and watch the market?  I ask this because I have been told that traders have access to the sell orders and at times may actually manipulate the prices to the point that they can dip down and pick off what is then a comparatively cheap stock.
- ------_=_NextPart_001_01C1D732.BD02D2A0-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Fri, 29 Mar 2002 07:22:30 -0800 From: larry l worden Subject: [CANSLIM] spreadsheet Is there a spread sheet that will update prices and also have the capacity to compute the 8% sell price? I was thinking it would be nice to see a price that is 8% below stocks resent highs, every day, automatically. thanks Larry - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Fri, 29 Mar 2002 11:02:04 -0500 From: "Rob Miller" Subject: Re: [CANSLIM] spreadsheet It sounds like you're looking to see a trailing 8% stop. Note that Canslim calls for an 8% stop loss, not an 8% trailing stop. A trailing percentage stop is not recommended by Canslim, though it does call for reevaluating your position once a stock is 15% off its highs. Rob - ----- Original Message ----- From: "larry l worden" To: Cc: Sent: Friday, March 29, 2002 10:22 AM Subject: [CANSLIM] spreadsheet > Is there a spread sheet that will update prices and also have the > capacity to compute the 8% sell price? I was thinking it would be nice to > see a price that is 8% below stocks resent highs, every day, > automatically. > thanks Larry > > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. > - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Fri, 29 Mar 2002 11:40:48 -0500 From: "Rob Miller" Subject: Re: [CANSLIM] More on Stop Losses... This is a multi-part message in MIME format. - ------=_NextPart_000_0016_01C1D716.9266FD80 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable John, That's also what I do. I specify the percentage of total capital I'm = willing to risk, say 1%, and buy the number of shares corresponding to = that amount of risk. So the smaller my position risk (buy price less = stop price) the more shares I can buy and the greater my potential = risk/reward. I prefer this over the equal size method called for by = WON. While I keep my initial losses to less than 8%, as called for by = WON, I size my positions differently. =20 WON calls for setting an 8% or smaller stop below a correct buy point of = no more than 5% over your pivot. Using the WON method, you keep your = losses small, but your (money management) stops are arbitrary with an = undefined probability of being hit. While this method for setting stops = doesn't produce significantly different results from WON in most cases, = combining your initial money management stop with your chart stop does = improve your chances of success on some stocks. I'm sure many others = use this method as well. =20 Rob =20 - ----- Original Message -----=20 From: Cefaloni, John L Jr. [AMSTA-AR-WEA]=20 To: 'canslim@lists.xmission.com'=20 Sent: Friday, March 29, 2002 10:02 AM Subject: [CANSLIM] More on Stop Losses... Rob, You make an interesting point here. I also use hard stops and take my = stop price into consideration when I buy. It is one of the criteria I = use to determine, based on risk tolerance, how much I'm willing to pay. = For example, if the b/o price is $30 and the stock is trading at $31, = but the chart shows support (like 50 dma, an area of consolidation, a = long term trendline, or some combination) at, say $27, then I will = likely pass, even though the price is within 5% of b/o, simply because = setting a stop somewhere below the "safe" price of $27 would mean taking = on too much risk, i.e., greater than 8% loss if things go south. John C. -----Original Message----- From: Rob Miller [mailto:rmiller2@carolina.rr.com] Sent: Friday, March 29, 2002 8:42 AM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] Intro... Welcome JHS, I have used both methods over the years, but hard stops are all I = use now. While mental stops would sometimes allow me to miss an = intraday move below my stop, more often than not you just get out far = below your mental stop. I also use a risk based money management = strategy, and hard stops allow me to more precisely define my risk. The = key is to set your stop at a point where it is unlikely you will be = stopped out, unless the stock is clearly "broken". WON says that a = winning stock rarely drops more than 8% below a proper buy point, which = is in effect the pivot since he says to buy at or only slightly above = the pivot. No more than 5%. Before I enter a stock, I define my stop = by looking at the chart and deciding that if the stock hits this point = then there is clearly something wrong. If your pivot is $30, a stop of = $29.90 is probably too close, while $28.90 is unlikely if the stock is a = winner. It all depends on the chart. You can often get out sooner if = the stock begins pulling back on heavy volume. I try not to buy more = than 8-9% over my stop because that is where my risk/reward is best. I = think of my initial risk as the cost to buy the position. I'm not = willing to spend 15% to buy a position. I continue to use hard stops = even after I have moved the stop above breakeven (a free position), = though my stops are far enough away that they are unlikely to get hit = during a normal reaction. =20 Also, hard stops are less stressful. If, like me, you take only a = few positions, not knowing your exit can make leaving your computer = difficult. Rob =20 ----- Original Message -----=20 From: jhs=20 To: canslim@xmission.com=20 Sent: Wednesday, March 27, 2002 9:10 PM Subject: [CANSLIM] Intro... I'm another newbie, but have been lurking for sometime observing = and learning. I am not a Forbes referral, but one from a = current/long-term member. This has been a terrific site; it is a rare = board that maintains a sense of dignity as well as being informative. = Thanks! I have been investing for several years, but with the assistance = of a broker. I finally decided to pull the plug because I felt I had = too little control. It irritated me no end that we never seemed to come = to some kind of sell rules agreement; hence I rode down more stocks than = I care to admit. I like the discipline of CANSLIM; for now I intend to = follow it pretty much to the letter until I get some more experience and = feel comfortable experimenting a bit. One question: CANLIM dictates a sell when the price drops 8% = below purchase cost (with some variation on the exact percentage). Do = most members write a stop loss order at the same time as the purchase = order? Or do you simply make a mental note and watch the market? I ask = this because I have been told that traders have access to the sell = orders and at times may actually manipulate the prices to the point that = they can dip down and pick off what is then a comparatively cheap stock. - ------=_NextPart_000_0016_01C1D716.9266FD80 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
John,
 
That's also what I do.  I specify = the=20 percentage of total capital I'm willing to risk, say 1%, and buy the = number of=20 shares corresponding to that amount of risk.  So the smaller my = position=20 risk (buy price less stop price) the more shares I can buy and the = greater my=20 potential risk/reward.  I prefer this over the equal size method = called for=20 by WON.  While I keep my initial losses to less than = 8%, as=20 called for by WON, I size my positions differently. 
 
WON calls for setting an 8% or smaller = stop below a=20 correct buy point of no more than 5% over your pivot.  = Using the=20 WON method, you keep your losses small, but your (money management) = stops are arbitrary with an undefined probability of being = hit. =20 While this method for setting stops doesn't=20 produce significantly different results from WON in most=20 cases, combining your initial money management stop with your = chart=20 stop does improve your chances of success on some stocks.  I'm = sure=20 many others use this method as well.   
 
Rob     =
 
 
----- Original Message -----
From:=20 Cefaloni,=20 John L Jr. [AMSTA-AR-WEA]
Sent: Friday, March 29, 2002 = 10:02=20 AM
Subject: [CANSLIM] More on Stop = Losses...

Rob,
 
You=20 make an interesting point here.  I also use hard stops and take = my stop=20 price into consideration when I buy.  It is one of the criteria I = use to=20 determine, based on risk tolerance, how much I'm willing to pay.  =
 
For=20 example, if the b/o price is $30 and the stock is trading at $31, but = the=20 chart shows support (like 50 dma, an area of consolidation, a long = term=20 trendline, or some combination) at, say $27, then I will likely pass, = even=20 though the price is within 5% of b/o, simply because setting a stop = somewhere=20 below the "safe" price of $27 would mean taking on too much risk, = i.e.,=20 greater than 8% loss if things go south.
 
John=20 C.
-----Original Message-----
From: Rob Miller=20 [mailto:rmiller2@carolina.rr.com]
Sent: Friday, March 29, = 2002=20 8:42 AM
To: canslim@lists.xmission.com
Subject: = Re:=20 [CANSLIM] Intro...

Welcome JHS,
 
I have used both methods over the = years, but=20 hard stops are all I use now.  While mental stops would = sometimes allow=20 me to miss an intraday move below my stop, more often than not = you just=20 get out far below your mental stop.  I also use a risk = based money=20 management strategy, and hard stops allow me to more precisely = define my=20 risk.  The key is to set your stop at a point where it is = unlikely=20 you will be stopped out, unless the stock is clearly=20 "broken".  WON says that a winning stock rarely drops more = than 8%=20 below a proper buy point, which is in effect the pivot since he says = to buy=20 at or only slightly above the pivot.  No more than 5%.  = Before I=20 enter a stock, I define my stop by looking at the chart and deciding = that if=20 the stock hits this point then there is clearly something = wrong. =20 If your pivot is $30, a stop of $29.90 is probably too=20 close, while $28.90 is unlikely if the stock is a = winner.  It=20 all depends on the chart.  You can often get out sooner if the=20 stock begins pulling back on heavy volume.  I try = not to=20 buy more than 8-9% over my stop because that is where my = risk/reward is=20 best.  I think of my initial risk as the cost to buy = the=20 position.  I'm not willing to spend 15% to buy a=20 position.  I continue to use hard stops even after I have = moved=20 the stop above breakeven (a free position), though my stops are far=20 enough away that they are unlikely to get hit during a normal=20 reaction.      
 
Also, hard stops are less = stressful.  If,=20 like me, you take only a few positions, not knowing your exit = can make=20 leaving your computer difficult.
 
Rob 
----- Original Message ----- =
From:=20 jhs =
Sent: Wednesday, March 27, = 2002 9:10=20 PM
Subject: [CANSLIM] = Intro...

I'm another=20 newbie, but have been lurking for sometime observing and = learning.  I=20 am not a Forbes referral, but one from a current/long-term = member. =20 This has been a terrific site; it is a rare board that maintains a = sense=20 of dignity as well as being informative.  = Thanks!
 
I = have been=20 investing for several years, but with the assistance of a = broker.  I=20 finally decided to pull the plug because I felt I had too=20 little control.  It irritated me no end that we never = seemed to=20 come to some kind of sell rules agreement; hence I rode down more = stocks=20 than I care to admit.  I like the discipline of CANSLIM; for = now I=20 intend to follow it pretty much to the letter until I get some = more=20 experience and feel comfortable experimenting a = bit.
 
One=20 question:  CANLIM dictates a sell when the price drops 8% = below=20 purchase cost (with some variation on the exact percentage).  = Do most=20 members write a stop loss order at the same time as the purchase=20 order?  Or do you simply make a mental note and watch the=20 market?  I ask this because I have been told that traders = have access=20 to the sell orders and at times may actually manipulate the prices = to the=20 point that they can dip down and pick off what is then a = comparatively=20 cheap=20 stock.
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