From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #2374 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 Wednesday, May 1 2002 Volume 02 : Number 2374 In this issue: [CANSLIM] Acc/Dis Charts updated through April 30th [CANSLIM] Today's IBD "Big Picture" comments... Re: [CANSLIM] Today's IBD "Big Picture" comments... Re: [CANSLIM] Today's IBD "Big Picture" comments... Re: [CANSLIM] Today's IBD "Big Picture" comments... Re: [CANSLIM] Today's IBD "Big Picture" comments... Re: [CANSLIM] Today's IBD "Big Picture" comments... Re: [CANSLIM] Today's IBD "Big Picture" comments... RE: [CANSLIM] Today's IBD "Big Picture" comments... ---------------------------------------------------------------------- Date: Wed, 1 May 2002 09:52:04 -0500 From: "Fred Richards" Subject: [CANSLIM] Acc/Dis Charts updated through April 30th This is a multi-part message in MIME format. - ------=_NextPart_000_0000_01C1F0F5.D9910C20 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: 7bit The Acc/Dis charts from IBD page b2 have been updated and posted to the following URL: http://www.adrich.com/SI/Info/ABPercent.htm Fred Richards Corruptisima republica plurimae leges. [The more corrupt a republic, the more laws.] - - Tacitus, Annuals III 27 www.adrich.com - ------=_NextPart_000_0000_01C1F0F5.D9910C20 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
The = Acc/Dis charts=20 from IBD page b2 have been updated and posted to the following=20 URL:
 
http://www.adrich.co= m/SI/Info/ABPercent.htm
 
 
Fred Richards
 
Corruptisima republica plurimae = leges.  [The=20 more corrupt a republic, the more laws.]  - - Tacitus, Annuals III=20 27
 
www.adrich.com
 
- ------=_NextPart_000_0000_01C1F0F5.D9910C20-- - - - -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: Wed, 1 May 2002 09:12:38 -0700 From: "Bill Triffet" Subject: [CANSLIM] Today's IBD "Big Picture" comments... Well friends, it seems that today's IBD confirms what I've thought about the M in canslim - It's not necessarily based on the readings of the three major market indexes ( a big departure from HTMMIS). I'm paraphrasing the last three paragraphs of "The Big Picture"(there are stiff copyright disclaimers at IBD): It will take a few days to see if the rotation BACK into the Dow, Naz, and S&P is valid. There should be a big move in heavier volume by the end of the week to confirm it. It goes on to say it's a "nonissue" for growth investors since small and mid-cap stocks along with medical, consumer and defense are doing well despite the big averages. If they hold up, it says, the major averages could improve. Also mentions "careful trading" with tight loss cutting is key. My point? IMHO, IBD is marketed for many types of investors. Pure canslim (if there is such a thing) is just one of them. I think perhaps it's time for me to look at growth investing with a canslim approach. I'm starting to see several here have done this to great success (though with very close watching). Including things such as a lower but advancing RS as opposed to just a high rating and not be afraid to jump into stocks in an upwards trending sector though the market is flat or down IF they have good fundies. Several times this and last year I saw stocks and groups moving ahead but stayed out due to the major indexes downward trend. Comments? Btw, for Fred, it suggests there's heavy distribution out of gold and precious metals by investors. Bill Triffet - - - -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: Wed, 1 May 2002 12:44:02 -0400 From: "Winston Little" Subject: Re: [CANSLIM] Today's IBD "Big Picture" comments... My observations: - - true CANSLIM works well in a "bull market'. - - ALL markets have issues which are rising and some which are falling. (In bull market more rise than fall and the life of a rise is very long). - - we are currently in a rotational market, with the life of a trend varying from one or two days to at most one month - - in this era only the fast survive, a good example is that of OVER during the past week. The quickest way to lose money is buy and hold . It is similar to grabbing a handful of smoke and hoping to keep it. - ----- Original Message ----- From: "Bill Triffet" To: "canslim" Sent: Wednesday, May 01, 2002 12:12 PM Subject: [CANSLIM] Today's IBD "Big Picture" comments... > Well friends, it seems that today's IBD confirms what I've thought about the > M in canslim - It's not necessarily based on the readings of the three major > market indexes ( a big departure from HTMMIS). > > I'm paraphrasing the last three paragraphs of "The Big Picture"(there are > stiff copyright disclaimers at IBD): > > It will take a few days to see if the rotation BACK into the Dow, Naz, and > S&P is valid. There should be a big move in heavier volume by the end of the > week to confirm it. > > It goes on to say it's a "nonissue" for growth investors since small and > mid-cap stocks along with medical, consumer and defense are doing well > despite the big averages. If they hold up, it says, the major averages could > improve. > > Also mentions "careful trading" with tight loss cutting is key. > > My point? IMHO, IBD is marketed for many types of investors. Pure canslim > (if there is such a thing) is just one of them. > > I think perhaps it's time for me to look at growth investing with a canslim > approach. I'm starting to see several here have done this to great success > (though with very close watching). Including things such as a lower but > advancing RS as opposed to just a high rating and not be afraid to jump into > stocks in an upwards trending sector though the market is flat or down IF > they have good fundies. > > Several times this and last year I saw stocks and groups moving ahead but > stayed out due to the major indexes downward trend. Comments? > > Btw, for Fred, it suggests there's heavy distribution out of gold and > precious metals by investors. > > Bill Triffet > > > > > > - > -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: Wed, 1 May 2002 12:47:13 -0400 From: "Dan Forant" Subject: Re: [CANSLIM] Today's IBD "Big Picture" comments... Wow, this is really big news. IBD's been jerking chains for a long time now. DanF - ----- Original Message ----- From: "Bill Triffet" To: "canslim" Sent: Wednesday, May 01, 2002 12:12 PM Subject: [CANSLIM] Today's IBD "Big Picture" comments... > Well friends, it seems that today's IBD confirms what I've thought about the > M in canslim - It's not necessarily based on the readings of the three major > market indexes ( a big departure from HTMMIS). > > I'm paraphrasing the last three paragraphs of "The Big Picture"(there are > stiff copyright disclaimers at IBD): > > It will take a few days to see if the rotation BACK into the Dow, Naz, and > S&P is valid. There should be a big move in heavier volume by the end of the > week to confirm it. > > It goes on to say it's a "nonissue" for growth investors since small and > mid-cap stocks along with medical, consumer and defense are doing well > despite the big averages. If they hold up, it says, the major averages could > improve. > > Also mentions "careful trading" with tight loss cutting is key. > > My point? IMHO, IBD is marketed for many types of investors. Pure canslim > (if there is such a thing) is just one of them. > > I think perhaps it's time for me to look at growth investing with a canslim > approach. I'm starting to see several here have done this to great success > (though with very close watching). Including things such as a lower but > advancing RS as opposed to just a high rating and not be afraid to jump into > stocks in an upwards trending sector though the market is flat or down IF > they have good fundies. > > Several times this and last year I saw stocks and groups moving ahead but > stayed out due to the major indexes downward trend. Comments? > > Btw, for Fred, it suggests there's heavy distribution out of gold and > precious metals by investors. > > Bill Triffet > > > > > > - > -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: Wed, 1 May 2002 13:15:00 -0400 From: "Winston Little" Subject: Re: [CANSLIM] Today's IBD "Big Picture" comments... The DJIA, NASD and S&P 500 represent the behavior of the LARGEST companies, and approx. 50% of the market capitalization of the entire market and yet are only a total of approximately 500 companies of the approx 6000 issues listed on NYSE and NASD. All three of these indices are down and struggling. IJS is i-share index of the S&P 600 small cap companies and shows a steady rise since 21 September of 2001, rising from 70 to near 100 now. The differences of performances (small caps vs. big and high tech vs. low tech) help point out the places to be focused. - ----- Original Message ----- From: "Dan Forant" To: Sent: Wednesday, May 01, 2002 12:47 PM Subject: Re: [CANSLIM] Today's IBD "Big Picture" comments... > Wow, this is really big news. IBD's been jerking chains for a long time now. > > DanF > ----- Original Message ----- > From: "Bill Triffet" > To: "canslim" > Sent: Wednesday, May 01, 2002 12:12 PM > Subject: [CANSLIM] Today's IBD "Big Picture" comments... > > > > Well friends, it seems that today's IBD confirms what I've thought about > the > > M in canslim - It's not necessarily based on the readings of the three > major > > market indexes ( a big departure from HTMMIS). > > > > I'm paraphrasing the last three paragraphs of "The Big Picture"(there are > > stiff copyright disclaimers at IBD): > > > > It will take a few days to see if the rotation BACK into the Dow, Naz, and > > S&P is valid. There should be a big move in heavier volume by the end of > the > > week to confirm it. > > > > It goes on to say it's a "nonissue" for growth investors since small and > > mid-cap stocks along with medical, consumer and defense are doing well > > despite the big averages. If they hold up, it says, the major averages > could > > improve. > > > > Also mentions "careful trading" with tight loss cutting is key. > > > > My point? IMHO, IBD is marketed for many types of investors. Pure canslim > > (if there is such a thing) is just one of them. > > > > I think perhaps it's time for me to look at growth investing with a > canslim > > approach. I'm starting to see several here have done this to great success > > (though with very close watching). Including things such as a lower but > > advancing RS as opposed to just a high rating and not be afraid to jump > into > > stocks in an upwards trending sector though the market is flat or down IF > > they have good fundies. > > > > Several times this and last year I saw stocks and groups moving ahead but > > stayed out due to the major indexes downward trend. Comments? > > > > Btw, for Fred, it suggests there's heavy distribution out of gold and > > precious metals by investors. > > > > Bill Triffet > > > > > > > > > > > > - > > -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: Wed, 1 May 2002 12:24:58 -0500 From: "Katherine Malm" Subject: Re: [CANSLIM] Today's IBD "Big Picture" comments... This is a multi-part message in MIME format. - ------=_NextPart_000_0060_01C1F10B.3553C060 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Hi Bill, You've brought up an excellent issue and that is "what *is* CANSLIM"? I = think reading HTMMIS is a lot like reading the Bible. Each person can = read the same text, the same translation, and they will come away with a = different interpretation of "what it means." I reread HTMMIS constantly, = seeing new passages and new points of view given my new experiences over = time. In the last couple of years I've come to believe that there is a = core set of "golden rules" at the heart of CANSLIM that are universal to = the style, but the implementation of those golden rules may be different = from one person to the next. Contrary to DanF's point of view, I don't = see IBD as "jerking our chain" but instead see this as proof of my point = of view. That is, even within the IBD (and CANSLIM), there are seeming = contradictions. Their 20 points will say one thing, but they will give = examples of winning stocks that demonstrate exceptions. Bottom line for = me is that there's a big difference between "restrictive rules" and = "general guidelines" and there's no substitute for understanding the = core concepts that make up the CANSLIM style. For example, in a secular = Bull where nearly every stock is in an uptrend and above the 200dMA, the = biggest task is to pick "the best" of those going up. During = downtrending or sideways markets, the first task is to identify those = stocks/groups that are technically superior, and then, within those = groups to find the best fundamental stories. The difference between = those 2 markets is simply that the risk of being wrong in a secular bull = vs downtrending/sideways markets is smaller, so the tuition for making = errors is smaller. But the tuition is *always* there, just more severe = and obvious in tougher markets. This is how I'd express the "core spirit of CANSLIM": - -Use technical strength to draw your eye to stocks that are working. = This can be expressed by relationship to intermediate term moving = averages (50/200 day MA's), rising RS, new highs, = accumulation/distribution, up/down ratios, strong groups, increasing = institutional ownership, strong style subsectors of the market, etc. = Make purchases only on appropriate technical patterns. - -Select only stocks with superior forward growth estimates. Yes, = estimates can be wrong, but if the technicals are also strong, at least = the market is confirming this expectation (for the moment). Confirm = these estimates with appropriate due diligence so that you understand = what makes this growth possible. - -Select only stocks with superior financials. That means not only a = demonstrated ability to grow earnings and revenues, but financial = stability that will allow them to weather the tough times and/or = continue their strategy for continued growth. That means a strong = balance sheet, sufficient cash flow, excellent returns on equity = invested, etc. - -Select only stocks with sufficient liquidity to allow easy entry/exit = when the time is right technically. - -Preserve capital above all else. When you make a mistake, move on and = reinvest the remaining capital in what *is* working. - -Know how to read a chart so that you can exit and keep profits at the = appropriate time. In secular bull markets, you can ride out = consolidations knowing that there is a greater likelihood that the same = stocks and groups will continue their upward trek. In = downtrending/sideways markets, you cannot afford to sit through the = consolidation because the risk that the stock/sector/style will fall out = of favor is greater. Step aside as the consolidation starts, move to = strength elsewhere, come back when/if the consolidation ends and = continues upward. If a secular bull starts again, you'll be in the right = stocks already and can just ride them longer. - -Know how to identify and track a group of stocks that gives you the = "pulse of your market." If the pulse is poor, stand aside or learn to = short them as they fail. - -Always do post analysis and use successes and failures as building = blocks to becoming a better investor. Be honest about what you are doing = right or wrong. It's just like budgeting or dieting. Obviously, if = you're gaining weight or saving less than your plan, you need to change = something. Katherine - ----- Original Message -----=20 From: Bill Triffet=20 To: canslim=20 Sent: Wednesday, May 01, 2002 11:12 AM Subject: [CANSLIM] Today's IBD "Big Picture" comments... Well friends, it seems that today's IBD confirms what I've thought = about the M in canslim - It's not necessarily based on the readings of the three = major market indexes ( a big departure from HTMMIS). I'm paraphrasing the last three paragraphs of "The Big Picture"(there = are stiff copyright disclaimers at IBD): It will take a few days to see if the rotation BACK into the Dow, Naz, = and S&P is valid. There should be a big move in heavier volume by the end = of the week to confirm it. It goes on to say it's a "nonissue" for growth investors since small = and mid-cap stocks along with medical, consumer and defense are doing well despite the big averages. If they hold up, it says, the major averages = could improve. Also mentions "careful trading" with tight loss cutting is key. My point? IMHO, IBD is marketed for many types of investors. Pure = canslim (if there is such a thing) is just one of them. I think perhaps it's time for me to look at growth investing with a = canslim approach. I'm starting to see several here have done this to great = success (though with very close watching). Including things such as a lower = but advancing RS as opposed to just a high rating and not be afraid to = jump into stocks in an upwards trending sector though the market is flat or down = IF they have good fundies. Several times this and last year I saw stocks and groups moving ahead = but stayed out due to the major indexes downward trend. Comments? Btw, for Fred, it suggests there's heavy distribution out of gold and precious metals by investors. Bill Triffet - ------=_NextPart_000_0060_01C1F10B.3553C060 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Hi Bill,
 
You've brought up an excellent issue and that is "what *is* = CANSLIM"? I=20 think reading HTMMIS is a lot like reading the Bible. Each person can = read the=20 same text, the same translation, and they will come away with a = different=20 interpretation of "what it means." I reread HTMMIS constantly, seeing = new=20 passages and new points of view given my new experiences over time. In = the last=20 couple of years I've come to believe that there is a core set of "golden = rules"=20 at the heart of CANSLIM that are universal to the style, but the = implementation=20 of those golden rules may be different from one person to the next. = Contrary to=20 DanF's point of view, I don't see IBD as "jerking our chain" but instead = see=20 this as proof of my point of view. That is, even within the IBD (and = CANSLIM),=20 there are seeming contradictions. Their 20 points will say one thing, = but they=20 will give examples of winning stocks that demonstrate exceptions. Bottom = line=20 for me is that there's a big difference between "restrictive rules" and = "general=20 guidelines" and there's no substitute for understanding the core = concepts that=20 make up the CANSLIM style. For example, in a secular Bull where nearly = every=20 stock is in an uptrend and above the 200dMA, the biggest task is to pick = "the=20 best" of those going up. During downtrending or sideways markets, the = first task=20 is to identify those stocks/groups that are technically superior, and = then,=20 within those groups to find the best fundamental stories. The difference = between=20 those 2 markets is simply that the risk of being wrong in a secular bull = vs=20 downtrending/sideways markets is smaller, so the tuition for making = errors is=20 smaller. But the tuition is *always* there, just more severe and = obvious in=20 tougher markets.
 
This is how I'd express the "core spirit of CANSLIM":
 
-Use technical strength to draw your eye to stocks that are = working. This=20 can be expressed by relationship to intermediate term moving averages = (50/200=20 day MA's), rising RS, new highs, accumulation/distribution, up/down = ratios,=20 strong groups, increasing institutional ownership, strong style = subsectors of=20 the market, etc. Make purchases only on appropriate technical = patterns.
-Select only stocks with superior forward growth estimates. Yes, = estimates=20 can be wrong, but if the technicals are also strong, at least the market = is=20 confirming this expectation (for the moment). Confirm these estimates = with=20 appropriate due diligence so that  you understand what makes = this=20 growth possible.
-Select only stocks with superior financials. That means not only a = demonstrated ability to grow earnings and revenues, but financial = stability that=20 will allow them to weather the tough times and/or continue their = strategy for=20 continued growth. That means a strong balance sheet, sufficient cash = flow,=20 excellent returns on equity invested, etc.
-Select only stocks with sufficient liquidity to allow easy = entry/exit when=20 the time is right technically.
-Preserve capital above all else. When you make a mistake, move on = and=20 reinvest the remaining capital in what *is* working.
-Know how to read a chart so that you can exit and keep profits at = the=20 appropriate time. In secular bull markets, you can ride out = consolidations=20 knowing that there is a greater likelihood that the same stocks and = groups will=20 continue their upward trek. In downtrending/sideways markets, you cannot = afford=20 to sit through the consolidation because the risk that the = stock/sector/style=20 will fall out of favor is greater. Step aside as the consolidation = starts, move=20 to strength elsewhere, come back when/if the consolidation ends and = continues=20 upward. If a secular bull starts again, you'll be in the right stocks = already=20 and can just ride them longer.
-Know how to identify and track a group of stocks that gives you = the "pulse=20 of your market." If the pulse is poor, stand aside or learn to short = them as=20 they fail.
-Always do post analysis and use successes and failures as building = blocks=20 to becoming a better investor. Be honest about what you are doing right = or=20 wrong. It's just like budgeting or dieting. Obviously, if you're gaining = weight=20 or saving less than your plan, you need to change something.
 
Katherine
 
----- Original Message -----
From:=20 Bill=20 Triffet
To: canslim
Sent: Wednesday, May 01, 2002 = 11:12=20 AM
Subject: [CANSLIM] Today's IBD = "Big=20 Picture" comments...

Well friends, it seems that today's IBD confirms what = I've=20 thought about the
M in canslim - It's not necessarily based on the = readings=20 of the three major
market indexes ( a big departure from=20 HTMMIS).

I'm paraphrasing the last three paragraphs of "The Big = Picture"(there are
stiff copyright disclaimers at IBD):

It = will take=20 a few days to see if the rotation BACK into the Dow, Naz, = and
S&P is=20 valid. There should be a big move in heavier volume by the end of = the
week=20 to confirm it.

It goes on to say it's a "nonissue" for growth = investors=20 since small and
mid-cap stocks along with medical, consumer and = defense are=20 doing well
despite the big averages. If they hold up, it says, the = major=20 averages could
improve.

Also mentions "careful trading" with = tight=20 loss cutting is key.

My point? IMHO, IBD is marketed for many = types of=20 investors. Pure canslim
(if there is such a thing) is just one of=20 them.

I think perhaps it's time for me to look at growth = investing with=20 a canslim
approach. I'm starting to see several here have done this = to=20 great success
(though with very close watching). Including things = such as a=20 lower but
advancing RS as opposed to just a high rating and not be = afraid=20 to jump into
stocks in an upwards trending sector though the market = is flat=20 or down IF
they have good fundies.

Several times this and = last year=20 I saw stocks and groups moving ahead but
stayed out due to the = major=20 indexes downward trend. Comments?

Btw, for Fred, it suggests = there's=20 heavy distribution out of gold and
precious metals by=20 investors.

Bill Triffet - ------=_NextPart_000_0060_01C1F10B.3553C060-- - - - -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: Wed, 1 May 2002 10:32:11 -0700 From: "Bill Triffet" Subject: Re: [CANSLIM] Today's IBD "Big Picture" comments... Winston, It's just interesting that for years, IBD ( and WON) has always been focused on the three major indexes reading the markets. When there were follow-thrus on at least one of them (preferably all) - then I would look at the areas (small to large cap) to invest. Now, the point is taken that the reason behind it was to help reduce the chances of losses tied to the general market trending down. Btw, thanks for the info on IJS. I haven't been following these ETF's. Makes for a great small cap indicator! - -Bill Triffet - ----- Original Message ----- From: "Winston Little" To: Sent: Wednesday, May 01, 2002 10:15 AM Subject: Re: [CANSLIM] Today's IBD "Big Picture" comments... > The DJIA, NASD and S&P 500 represent the behavior of the LARGEST companies, > and approx. 50% of the market capitalization of the entire market and yet > are only a total of approximately 500 companies of the approx 6000 issues > listed on NYSE and NASD. > All three of these indices are down and struggling. > > IJS is i-share index of the S&P 600 small cap companies and shows a steady > rise since 21 September of 2001, rising from 70 to near 100 now. > > The differences of performances (small caps vs. big and high tech vs. low > tech) help point out the places to be focused. - - - -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: Wed, 1 May 2002 10:48:09 -0700 From: "Bill Triffet" Subject: Re: [CANSLIM] Today's IBD "Big Picture" comments... Hi Katherine, I completely agree with your "Core Sprite of Canslim" (sniped and printed...). I realize now that HTMMIS was using "rules" to instill these concepts. Problem for me and many others I'm sure was we looked at the rules and not the concepts. I couldn't see the forest for the trees! The 24 Lessons book does a better job at this I think. We always played the "is this the follow-thru day" game here. While the Russell was having follow-thru after follow-thru, I was still looking at the three major market indexes for conformation. While your right about the risk in a general down market, I see if I keep the same solid loss cutting strategy in place, there are still gems to be found without the general markets "ok". - -Bill - ----- Original Message ----- From: "Katherine Malm" To: Sent: Wednesday, May 01, 2002 10:24 AM Subject: Re: [CANSLIM] Today's IBD "Big Picture" comments... Hi Bill, You've brought up an excellent issue and that is "what *is* CANSLIM"? I think reading HTMMIS is a lot like reading the Bible. Each person can read the same text, the same translation, and they will come away with a different interpretation of "what it means." I reread HTMMIS constantly, seeing new passages and new points of view given my new experiences over time. In the last couple of years I've come to believe that there is a core set of "golden rules" at the heart of CANSLIM that are universal to the style, but the implementation of those golden rules may be different from one person to the next. Contrary to DanF's point of view, I don't see IBD as "jerking our chain" but instead see this as proof of my point of view. That is, even within the IBD (and CANSLIM), there are seeming contradictions. Their 20 points will say one thing, but they will give examples of winning stocks that demonstrate exceptions. Bottom line for me is that there's a big difference between "restrictive rules" and "general guidelines" and there's no substitute for understanding the core concepts that make up the CANSLIM style. For example, in a secular Bull where nearly every stock is in an uptrend and above the 200dMA, the biggest task is to pick "the best" of those going up. During downtrending or sideways markets, the first task is to identify those stocks/groups that are technically superior, and then, within those groups to find the best fundamental stories. The difference between those 2 markets is simply that the risk of being wrong in a secular bull vs downtrending/sideways markets is smaller, so the tuition for making errors is smaller. But the tuition is *always* there, just more severe and obvious in tougher markets. This is how I'd express the "core spirit of CANSLIM": - -Use technical strength to draw your eye to stocks that are working. This can be expressed by relationship to intermediate term moving averages (50/200 day MA's), rising RS, new highs, accumulation/distribution, up/down ratios, strong groups, increasing institutional ownership, strong style subsectors of the market, etc. Make purchases only on appropriate technical patterns. - -Select only stocks with superior forward growth estimates. Yes, estimates can be wrong, but if the technicals are also strong, at least the market is confirming this expectation (for the moment). Confirm these estimates with appropriate due diligence so that you understand what makes this growth possible. - -Select only stocks with superior financials. That means not only a demonstrated ability to grow earnings and revenues, but financial stability that will allow them to weather the tough times and/or continue their strategy for continued growth. That means a strong balance sheet, sufficient cash flow, excellent returns on equity invested, etc. - -Select only stocks with sufficient liquidity to allow easy entry/exit when the time is right technically. - -Preserve capital above all else. When you make a mistake, move on and reinvest the remaining capital in what *is* working. - -Know how to read a chart so that you can exit and keep profits at the appropriate time. In secular bull markets, you can ride out consolidations knowing that there is a greater likelihood that the same stocks and groups will continue their upward trek. In downtrending/sideways markets, you cannot afford to sit through the consolidation because the risk that the stock/sector/style will fall out of favor is greater. Step aside as the consolidation starts, move to strength elsewhere, come back when/if the consolidation ends and continues upward. If a secular bull starts again, you'll be in the right stocks already and can just ride them longer. - -Know how to identify and track a group of stocks that gives you the "pulse of your market." If the pulse is poor, stand aside or learn to short them as they fail. - -Always do post analysis and use successes and failures as building blocks to becoming a better investor. Be honest about what you are doing right or wrong. It's just like budgeting or dieting. Obviously, if you're gaining weight or saving less than your plan, you need to change something. Katherine - ----- Original Message ----- From: Bill Triffet To: canslim Sent: Wednesday, May 01, 2002 11:12 AM Subject: [CANSLIM] Today's IBD "Big Picture" comments... Well friends, it seems that today's IBD confirms what I've thought about the M in canslim - It's not necessarily based on the readings of the three major market indexes ( a big departure from HTMMIS). I'm paraphrasing the last three paragraphs of "The Big Picture"(there are stiff copyright disclaimers at IBD): It will take a few days to see if the rotation BACK into the Dow, Naz, and S&P is valid. There should be a big move in heavier volume by the end of the week to confirm it. It goes on to say it's a "nonissue" for growth investors since small and mid-cap stocks along with medical, consumer and defense are doing well despite the big averages. If they hold up, it says, the major averages could improve. Also mentions "careful trading" with tight loss cutting is key. My point? IMHO, IBD is marketed for many types of investors. Pure canslim (if there is such a thing) is just one of them. I think perhaps it's time for me to look at growth investing with a canslim approach. I'm starting to see several here have done this to great success (though with very close watching). Including things such as a lower but advancing RS as opposed to just a high rating and not be afraid to jump into stocks in an upwards trending sector though the market is flat or down IF they have good fundies. Several times this and last year I saw stocks and groups moving ahead but stayed out due to the major indexes downward trend. Comments? Btw, for Fred, it suggests there's heavy distribution out of gold and precious metals by investors. Bill Triffet - - - -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: Wed, 1 May 2002 07:54:54 -1000 From: "Mike Gibbons" Subject: RE: [CANSLIM] Today's IBD "Big Picture" comments... This is a multi-part message in MIME format. - ------=_NextPart_000_000F_01C1F0E5.7ADA7A00 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: 7bit I've seen the term "secular bull" and "secular bear" several times on the board but don't understand it. What other kinds of market are there - catholic? anglican? I'm not being fascetious, just curious. Aloha, Mike Gibbons Proactive Technologies, LLC http://www.proactech.com -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Katherine Malm Sent: Wednesday, May 01, 2002 7:25 AM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] Today's IBD "Big Picture" comments... Hi Bill, You've brought up an excellent issue and that is "what *is* CANSLIM"? I think reading HTMMIS is a lot like reading the Bible. Each person can read the same text, the same translation, and they will come away with a different interpretation of "what it means." I reread HTMMIS constantly, seeing new passages and new points of view given my new experiences over time. In the last couple of years I've come to believe that there is a core set of "golden rules" at the heart of CANSLIM that are universal to the style, but the implementation of those golden rules may be different from one person to the next. Contrary to DanF's point of view, I don't see IBD as "jerking our chain" but instead see this as proof of my point of view. That is, even within the IBD (and CANSLIM), there are seeming contradictions. Their 20 points will say one thing, but they will give examples of winning stocks that demonstrate exceptions. Bottom line for me is that there's a big difference between "restrictive rules" and "general guidelines" and there's no substitute for understanding the core concepts that make up the CANSLIM style. For example, in a secular Bull where nearly every stock is in an uptrend and above the 200dMA, the biggest task is to pick "the best" of those going up. During downtrending or sideways markets, the first task is to identify those stocks/groups that are technically superior, and then, within those groups to find the best fundamental stories. The difference between those 2 markets is simply that the risk of being wrong in a secular bull vs downtrending/sideways markets is smaller, so the tuition for making errors is smaller. But the tuition is *always* there, just more severe and obvious in tougher markets. This is how I'd express the "core spirit of CANSLIM": -Use technical strength to draw your eye to stocks that are working. This can be expressed by relationship to intermediate term moving averages (50/200 day MA's), rising RS, new highs, accumulation/distribution, up/down ratios, strong groups, increasing institutional ownership, strong style subsectors of the market, etc. Make purchases only on appropriate technical patterns. -Select only stocks with superior forward growth estimates. Yes, estimates can be wrong, but if the technicals are also strong, at least the market is confirming this expectation (for the moment). Confirm these estimates with appropriate due diligence so that you understand what makes this growth possible. -Select only stocks with superior financials. That means not only a demonstrated ability to grow earnings and revenues, but financial stability that will allow them to weather the tough times and/or continue their strategy for continued growth. That means a strong balance sheet, sufficient cash flow, excellent returns on equity invested, etc. -Select only stocks with sufficient liquidity to allow easy entry/exit when the time is right technically. -Preserve capital above all else. When you make a mistake, move on and reinvest the remaining capital in what *is* working. -Know how to read a chart so that you can exit and keep profits at the appropriate time. In secular bull markets, you can ride out consolidations knowing that there is a greater likelihood that the same stocks and groups will continue their upward trek. In downtrending/sideways markets, you cannot afford to sit through the consolidation because the risk that the stock/sector/style will fall out of favor is greater. Step aside as the consolidation starts, move to strength elsewhere, come back when/if the consolidation ends and continues upward. If a secular bull starts again, you'll be in the right stocks already and can just ride them longer. -Know how to identify and track a group of stocks that gives you the "pulse of your market." If the pulse is poor, stand aside or learn to short them as they fail. -Always do post analysis and use successes and failures as building blocks to becoming a better investor. Be honest about what you are doing right or wrong. It's just like budgeting or dieting. Obviously, if you're gaining weight or saving less than your plan, you need to change something. Katherine ----- Original Message ----- From: Bill Triffet To: canslim Sent: Wednesday, May 01, 2002 11:12 AM Subject: [CANSLIM] Today's IBD "Big Picture" comments... Well friends, it seems that today's IBD confirms what I've thought about the M in canslim - It's not necessarily based on the readings of the three major market indexes ( a big departure from HTMMIS). I'm paraphrasing the last three paragraphs of "The Big Picture"(there are stiff copyright disclaimers at IBD): It will take a few days to see if the rotation BACK into the Dow, Naz, and S&P is valid. There should be a big move in heavier volume by the end of the week to confirm it. It goes on to say it's a "nonissue" for growth investors since small and mid-cap stocks along with medical, consumer and defense are doing well despite the big averages. If they hold up, it says, the major averages could improve. Also mentions "careful trading" with tight loss cutting is key. My point? IMHO, IBD is marketed for many types of investors. Pure canslim (if there is such a thing) is just one of them. I think perhaps it's time for me to look at growth investing with a canslim approach. I'm starting to see several here have done this to great success (though with very close watching). Including things such as a lower but advancing RS as opposed to just a high rating and not be afraid to jump into stocks in an upwards trending sector though the market is flat or down IF they have good fundies. Several times this and last year I saw stocks and groups moving ahead but stayed out due to the major indexes downward trend. Comments? Btw, for Fred, it suggests there's heavy distribution out of gold and precious metals by investors. Bill Triffet - ------=_NextPart_000_000F_01C1F0E5.7ADA7A00 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
I've=20 seen the term "secular bull" and "secular bear" several times on the = board but=20 don't understand it. What other kinds of market are there  - = catholic?=20 anglican?
 
I'm=20 not being fascetious, just curious.
 
Aloha,
 
Mike Gibbons
Proactive Technologies, = LLC
http://www.proactech.com
-----Original Message-----
From:=20 owner-canslim@lists.xmission.com=20 [mailto:owner-canslim@lists.xmission.com]On Behalf Of Katherine = Malm
Sent: Wednesday, May 01, 2002 7:25 AM
To:=20 canslim@lists.xmission.com
Subject: Re: [CANSLIM] Today's = IBD "Big=20 Picture" comments...

Hi Bill,
 
You've brought up an excellent issue and that is "what *is* = CANSLIM"? I=20 think reading HTMMIS is a lot like reading the Bible. Each person can = read the=20 same text, the same translation, and they will come away with a = different=20 interpretation of "what it means." I reread HTMMIS constantly, seeing = new=20 passages and new points of view given my new experiences over time. In = the=20 last couple of years I've come to believe that there is a core set of = "golden=20 rules" at the heart of CANSLIM that are universal to the style, but = the=20 implementation of those golden rules may be different from one person = to the=20 next. Contrary to DanF's point of view, I don't see IBD as "jerking = our chain"=20 but instead see this as proof of my point of view. That is, even = within the=20 IBD (and CANSLIM), there are seeming contradictions. Their 20 points = will say=20 one thing, but they will give examples of winning stocks that = demonstrate=20 exceptions. Bottom line for me is that there's a big difference = between=20 "restrictive rules" and "general guidelines" and there's no substitute = for=20 understanding the core concepts that make up the CANSLIM style. For = example,=20 in a secular Bull where nearly every stock is in an uptrend and above = the=20 200dMA, the biggest task is to pick "the best" of those going up. = During=20 downtrending or sideways markets, the first task is to identify those=20 stocks/groups that are technically superior, and then, within those = groups to=20 find the best fundamental stories. The difference between those 2 = markets is=20 simply that the risk of being wrong in a secular bull vs = downtrending/sideways=20 markets is smaller, so the tuition for making errors is smaller. But = the=20 tuition is *always* there, just more severe and obvious in = tougher=20 markets.
 
This is how I'd express the "core spirit of CANSLIM":
 
-Use technical strength to draw your eye to stocks that are = working. This=20 can be expressed by relationship to intermediate term moving averages = (50/200=20 day MA's), rising RS, new highs, accumulation/distribution, up/down = ratios,=20 strong groups, increasing institutional ownership, strong style = subsectors of=20 the market, etc. Make purchases only on appropriate technical = patterns.
-Select only stocks with superior forward growth estimates. Yes,=20 estimates can be wrong, but if the technicals are also strong, at = least the=20 market is confirming this expectation (for the moment). Confirm these=20 estimates with appropriate due diligence so that  you = understand=20 what makes this growth possible.
-Select only stocks with superior financials. That means not only = a=20 demonstrated ability to grow earnings and revenues, but financial = stability=20 that will allow them to weather the tough times and/or continue their = strategy=20 for continued growth. That means a strong balance sheet, sufficient = cash flow,=20 excellent returns on equity invested, etc.
-Select only stocks with sufficient liquidity to allow easy = entry/exit=20 when the time is right technically.
-Preserve capital above all else. When you make a mistake, move = on and=20 reinvest the remaining capital in what *is* working.
-Know how to read a chart so that you can exit and keep profits = at the=20 appropriate time. In secular bull markets, you can ride out = consolidations=20 knowing that there is a greater likelihood that the same stocks and = groups=20 will continue their upward trek. In downtrending/sideways markets, you = cannot=20 afford to sit through the consolidation because the risk that the=20 stock/sector/style will fall out of favor is greater. Step aside as = the=20 consolidation starts, move to strength elsewhere, come back when/if = the=20 consolidation ends and continues upward. If a secular bull starts = again,=20 you'll be in the right stocks already and can just ride them = longer.
-Know how to identify and track a group of stocks that gives you = the=20 "pulse of your market." If the pulse is poor, stand aside or learn to = short=20 them as they fail.
-Always do post analysis and use successes and failures as = building=20 blocks to becoming a better investor. Be honest about what you are = doing right=20 or wrong. It's just like budgeting or dieting. Obviously, if you're = gaining=20 weight or saving less than your plan, you need to change = something.
 
Katherine
 
----- Original Message -----
From:=20 Bill=20 Triffet
To: canslim
Sent: Wednesday, May 01, 2002 = 11:12=20 AM
Subject: [CANSLIM] Today's = IBD "Big=20 Picture" comments...

Well friends, it seems that today's IBD confirms what = I've=20 thought about the
M in canslim - It's not necessarily based on = the=20 readings of the three major
market indexes ( a big departure from = HTMMIS).

I'm paraphrasing the last three paragraphs of "The = Big=20 Picture"(there are
stiff copyright disclaimers at IBD):

It = will=20 take a few days to see if the rotation BACK into the Dow, Naz,=20 and
S&P is valid. There should be a big move in heavier = volume by the=20 end of the
week to confirm it.

It goes on to say it's a = "nonissue"=20 for growth investors since small and
mid-cap stocks along with = medical,=20 consumer and defense are doing well
despite the big averages. If = they=20 hold up, it says, the major averages could
improve.

Also = mentions=20 "careful trading" with tight loss cutting is key.

My point? = IMHO, IBD=20 is marketed for many types of investors. Pure canslim
(if there = is such a=20 thing) is just one of them.

I think perhaps it's time for me = to look=20 at growth investing with a canslim
approach. I'm starting to see = several=20 here have done this to great success
(though with very close = watching).=20 Including things such as a lower but
advancing RS as opposed to = just a=20 high rating and not be afraid to jump into
stocks in an upwards = trending=20 sector though the market is flat or down IF
they have good=20 fundies.

Several times this and last year I saw stocks and = groups=20 moving ahead but
stayed out due to the major indexes downward = trend.=20 Comments?

Btw, for Fred, it suggests there's heavy = distribution out=20 of gold and
precious metals by investors.

Bill=20 Triffet - ------=_NextPart_000_000F_01C1F0E5.7ADA7A00-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ End of canslim-digest V2 #2374 ****************************** To unsubscribe to canslim-digest, send an email to "majordomo@xmission.com" with "unsubscribe canslim-digest" in the body of the message. For information on digests or retrieving files and old messages send "help" to the same address. Do not use quotes in your message.