From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #833 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, February 25 2000 Volume 02 : Number 833 In this issue: RE: [CANSLIM] bvf and bbrc RE: [CANSLIM] New CANSLIM rules (for TomW) Re: [CANSLIM] TMBS suddenly a dot com stock? Re: [CANSLIM] New CANSLIM rules (for TomW) Re: [CANSLIM] ACTU B/O [CANSLIM] Longer term holding [CANSLIM] watchlist sites [CANSLIM] [Fwd: ACTU - Direct Reply] RE: [CANSLIM] bvf and bbrc [CANSLIM] Why I want to hold longer - lessons learned? [CANSLIM] GTNR [CANSLIM] AMCC [CANSLIM] ASWX Breaks Out [CANSLIM] Re. Selection of what to Buy & A/D:U/D Re: [CANSLIM] GTNR [CANSLIM] The Gospel according to Jubak ---------------------------------------------------------------------- Date: Thu, 24 Feb 2000 17:50:12 -0800 From: "mikelu" Subject: RE: [CANSLIM] bvf and bbrc My stop is just a little below yours. I've been trailing stops at the 12-day low. Are you placing them below gaps? Mike - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Tim Fisher Sent: Thursday, February 24, 2000 7:04 AM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] bvf and bbrc Hmmm, I don't see many if any of the biotechs topping. With all the posts about getting out too early, I'll keep an eye on BVF. I will anyway since I own it. FWIW my stop is at 59-3/8 which will probably take me out "early" and I'll miss 1000% in the next year. QGENF tried to break out again & has so far held but it was not an encouraging day yesterday for it; maybe this is the time for them to rest. HGSI and IDPH are resting and CRA is at a new high after its split so I'd say the group was still strong but probably falling in GRS. I was bounced out of BBRC 2 months or so ago with a 20% profit, so I am biased towards the negative side. It is off my watch list simply because I don't want to own stocks that have a habit of stopping me out after a short run. Otherwise the B/O looks legit & the fundies are good. At 08:31 AM 2/24/00 +0200, you wrote: >Hi, >WON writes that closing down on high volume could be a sign of topping. So a >few days ago (the day *before* the posts about biotechs topping) I decided >to sell. I was able to get out at 68. That day it went up a bit more, >touching 70, but by the end of the day it had fallen, and yesterday closed >at 64 3/4. I don't have a lot of experience with all this, but I enjoyed >seeing how the advice really helped. > >I haven't had time to really research anything to get into. BBRC was listed >on Tom's DGO list and yesterday it went up 8% on 4X ADV. So I got in at 50 >1/8 just not to miss it, and set my stop at 46. It closed at 51 3/16. If >someone could fill me in on the CS fundamentals, and /or comments - I'd >appreciate it. > >David > > > > >Many people quit looking for work when they find a job. >============================================ >David S. Pinhasik >Tadiran Information Systems >@ Chaim Sheba Medical Center - Tel Hashomer, Israel >+972 3 530 5209 (new) >+972 3 534 5748 fax >+1 707 885 7831 US efax >dsap@shani.net >============================================ >This signature and tagline were generated by SchizoSigz! > > > > >- Tim Fisher, 1995 President, Pacific Fishery Biologists Ore-ROCK-On Rockhounding Web Site PFB Information mailto:tim@OreRockOn.com WWW http://OreRockOn.com - - - - ------------------------------ Date: Thu, 24 Feb 2000 21:40:56 -0600 From: "John Adair" Subject: RE: [CANSLIM] New CANSLIM rules (for TomW) My favorite mutual fund manager pb tech and communication recommended rrrr this week. I feel confident it will go. I first heard of this stock here on this board when it was $5.00 - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Johan Van Houtven Sent: Thursday, February 24, 2000 1:11 PM To: canslim@lists.xmission.com Subject: [CANSLIM] New CANSLIM rules (for TomW) Greg Kuhn @ tradingmarkets.com wrote the following in his column today: A final note. I got a call Wednesday from Sterling Ten in our War Room to answer a subscriber question. The subscriber wanted to know why I recently suggested Rare Medium (RRRR) as a stock fitting the CANSLIM criteria. The company has no earnings, and thus a lowly EPS rank of 6. I realize that if you're new to this methodology, or stock investing in general, that some of the concepts may seem foreign to you. However, I urge you to study the course installments Kevin Marder and I are turning out to help clear up most of your questions--especially dealing with many of the nuances. (But, by all means, keep asking questions through the Q&A section. As long as I understand your question I'll try to answer it in as much detail as possible.) Anyway, as Kevin and I discuss in today's second installment to our trading course, some industries, like Biotech, Telecommunications Services and, now the Internet, are still so new in their development that many of the leading stocks will make their move in anticipation of strong earnings growth in the future. Whether or not a bottom line ever shows up is a different story. With the exception of the Biotech and Telecommunications sector, in which many of the leading stocks not only have no earnings, but negative revenue growth as well, one can defer to a company's quarterly, year-over-year revenue growth, in lieu of earnings growth when it comes to Internet stocks. In the case of Rare Medium, the company has shown extremely strong quarterly, year-over-year revenue growth of 406%, 646% and 719% over the past three quarters. As you can see, revenue growth has accelerated nicely for three straight quarters. Just substitute revenue growth for earnings growth. The bigger the better, say north of 100-200%. That's what fund managers have been focusing on. And they're the people who give us nice paydays. Tom, do you accept this? Or do you say 'BS'? - -- Johan - - - - ------------------------------ Date: Fri, 25 Feb 2000 03:49:59 -0500 From: "Tom Worley" Subject: Re: [CANSLIM] TMBS suddenly a dot com stock? You make good points, Matt. The first split while I owned it was while it was trading in the low 20s. I think the second split was done regardless of price because by then the company had a history of splitting in that time frame. Failure to do so because of low price would have been a bad signal. And the supply of shares in the float is still quite small. As I mentioned, when you already have more liquid instruments, and further cash coming in from profits, than you can reasonably plow back into the company, it's better to pay at least a small dividend. Build up too much cash and you become a takeover target solely for your treasury, not your business value. Tom Worley stkguru@netside.net chat with me at ICQ # 5568838 get ICQ software at http://www.icq.com/icqhomepage.html - ----- Original Message ----- From: Matt Robinson To: Sent: Thursday, February 24, 2000 9:16 AM Subject: Re: [CANSLIM] TMBS suddenly a dot com stock? I understand that dividends are paid in order to reward investors. And, believe me, if I am given money, I'll gladly accept it. But, in my (and many others) quest for the infinite growth company, I like to see companies, especially ones of the size of TMBS to plow it back into the company to further growth. Another question I have about management decisions, is the fact that they split the stock at such a low price. Sometimes this can be a very bad thing. I would much rather see this stock in the twenties than to get 33% more shares. A: Many people don't look at stocks below a certain price. B: One of the main purposes for splitting a stock is so that most people can buy enough that they will buy it. C: I would much rather see management keep supply (the number of shares) as low as possible so that demand is much greater. While many will argue that people will still buy the same position value, I think that is not the case, especially at such a low pre split price. Matt - ----- Original Message ----- From: Tom Worley To: Sent: Thursday, February 24, 2000 2:35 AM Subject: Re: [CANSLIM] TMBS suddenly a dot com stock? > Hi Matt, > > I have held it thru two annual stocks splits already, so > without checking my records I guess I've had it for at least > 1.5 years. Ironically, I bot it at a time when I had some > free cash, and it seemed everyone in the group that bot it > was being stopped out for a loss. Couldn't understand that > as it seemed so attractive, so decided the only way to find > out was to buy a few hundred shares and prove it could be a > money maker. I have been both up and down since, but as I > learned more about it, decided I wanted it for long term, so > didn't worry about the dips. I added more shares after the > first split to give me round lots, and would add more if I > had free cash available. > > It has never performed well around earnings as I recall, > even tho it has never disappointed, and usually beats the > whisper nrs by at least a penny. > > Why a dividend on a small growth stock? Simple, to reward > the long term holders as well as dispense some of the excess > cash from profits (that amount over and beyond what might be > needed for a cash acquisition, R&D, operating expenses, etc) > that otherwise they would have to pay taxes on. And thru > both splits so far (both 4:3, a 33% increase) they continued > the same dividend per share post split as pre split, giving > the dividend a 33% hike as well. For me, that has always > proven to be a strong management statement about their > expectations of future earnings growth. > > Tom Worley > stkguru@netside.net > chat with me at ICQ # 5568838 > get ICQ software at http://www.icq.com/icqhomepage.html > > > ----- Original Message ----- > From: Matt Robinson > To: > Sent: Wednesday, February 23, 2000 11:10 AM > Subject: Re: [CANSLIM] TMBS suddenly a dot com stock? > > > You own TMBS? I have looked at it on and off since last May. > I was (and > still hesitant) about the technicals of the stock. When do > you buy it out of > curiosity? Also, one thing I question. Why does a company of > that size (~175 > mil) and with pretty good growth payout a dividend? What do > you think about > the company right now? > > thanks > Matt > > ----- Original Message ----- > From: Tom Worley > To: CANSLIM > Sent: Wednesday, February 23, 2000 1:58 AM > Subject: [CANSLIM] TMBS suddenly a dot com stock? > > Those that still follow this old dog of a former CANSLIM > stock may find this interesting. WARNING: I still own it > long term. > > Tom Worley > stkguru@netside.net > chat with me at ICQ # 5568838 > get ICQ software at http://www.icq.com/icqhomepage.html > > ----- Original Message ----- > From: EquityAlert News Alerts > To: Tom Worley > Sent: Tuesday, February 22, 2000 11:24 AM > Subject: News Alert for TMBS > > ============================================================ > ====== > As requested, your TMBS News Alert Follows From > EquityAlert.com > ============================================================ > ====== > > > > - > > > > - > __________________________________________________ Do You Yahoo!? Talk to your friends online with Yahoo! Messenger. http://im.yahoo.com - - - - ------------------------------ Date: Fri, 25 Feb 2000 04:11:53 -0500 From: "Tom Worley" Subject: Re: [CANSLIM] New CANSLIM rules (for TomW) I don't accept it as mainline CANSLIM, Johan, tho do accept the concept as a means of measuring unprofitable, but rapidly growing, cos. And as pointed out, when using this, 20% revenue growth is nothing, it's got to be huge. Of course, one danger in this approach is that often the comparison quarter a year prior may have only had $800K or so in revenue, so it's easy to double, and double again. When I have bot stocks using disciplines other than CANSLIM, and used revenue growth in lieu of earnings growth, I always had a personal rule that trailing 12 mos revenues had to exceed losses for the same time period! But even when the company is growing fast, and still losing money, I must see a positive trend (e.g. lower losses) on the bottom line. I have bot a nr of stocks right after their first profitable qtr, so long as the strong rev growth, and reduced losses, had been consistent for at least 1-2 years. Tom Worley stkguru@netside.net chat with me at ICQ # 5568838 get ICQ software at http://www.icq.com/icqhomepage.html - ----- Original Message ----- From: Johan Van Houtven To: Sent: Thursday, February 24, 2000 2:10 PM Subject: [CANSLIM] New CANSLIM rules (for TomW) Greg Kuhn @ tradingmarkets.com wrote the following in his column today: A final note. I got a call Wednesday from Sterling Ten in our War Room to answer a subscriber question. The subscriber wanted to know why I recently suggested Rare Medium (RRRR) as a stock fitting the CANSLIM criteria. The company has no earnings, and thus a lowly EPS rank of 6. I realize that if you're new to this methodology, or stock investing in general, that some of the concepts may seem foreign to you. However, I urge you to study the course installments Kevin Marder and I are turning out to help clear up most of your questions--especially dealing with many of the nuances. (But, by all means, keep asking questions through the Q&A section. As long as I understand your question I'll try to answer it in as much detail as possible.) Anyway, as Kevin and I discuss in today's second installment to our trading course, some industries, like Biotech, Telecommunications Services and, now the Internet, are still so new in their development that many of the leading stocks will make their move in anticipation of strong earnings growth in the future. Whether or not a bottom line ever shows up is a different story. With the exception of the Biotech and Telecommunications sector, in which many of the leading stocks not only have no earnings, but negative revenue growth as well, one can defer to a company's quarterly, year-over-year revenue growth, in lieu of earnings growth when it comes to Internet stocks. In the case of Rare Medium, the company has shown extremely strong quarterly, year-over-year revenue growth of 406%, 646% and 719% over the past three quarters. As you can see, revenue growth has accelerated nicely for three straight quarters. Just substitute revenue growth for earnings growth. The bigger the better, say north of 100-200%. That's what fund managers have been focusing on. And they're the people who give us nice paydays. Tom, do you accept this? Or do you say 'BS'? - -- Johan - - - - ------------------------------ Date: Fri, 25 Feb 2000 04:55:53 -0500 From: "Tom Worley" Subject: Re: [CANSLIM] ACTU B/O You couldn't have bot this one using a volume based criteria, as the volume didn't kick in till today, and that was way too late. Because of the way "M" has been for some months now, I would probably tried to buy it in the short handle, around 48. A second possible pivot point was yesterday, as it broke thru 52.75. Tom Worley stkguru@netside.net chat with me at ICQ # 5568838 get ICQ software at http://www.icq.com/icqhomepage.html - ----- Original Message ----- From: To: Sent: Thursday, February 24, 2000 3:55 PM Subject: Re: [CANSLIM] ACTU B/O ACTU finally getting the volume but the stock is up over 31% since the 2/17 B/O on low volume. Looking at the chart, where would others in this group have put the pivot point and made a buy? Thanks, Ziggy wroblewski@uswest.net wrote: > ACTU appears to be breaking out of a short 4 1/2 week > base...handle pivot point would be 49.375. > Volume has been very light all day but has significantly > picked up the last hour...Comments please. > > CANSLIM numbers are 76 93 A.A > > Ziggy > > - - - - - ------------------------------ Date: Fri, 25 Feb 2000 06:21:05 -0500 From: "Charles Cangialosi" Subject: [CANSLIM] Longer term holding There has been much conversation about holding longer. Does anyone feel that the CANSLIM methodology would be applicable if I used a week and monthly chart. The charts look different from the daily. In doing this there would be a longer time horizon. Charlie - - ------------------------------ Date: Fri, 25 Feb 2000 20:45:13 +0700 From: "Peter D. Christiansen" Subject: [CANSLIM] watchlist sites I'm looking for web sites that offer free (preferably) tracking of watch lists. It can be delayed, but I want to have the ability to set alarms for price movement and volume levels. Yahoo Quotes allows you to set price alarms, but not volume. Anyone have any suggestions? - -- Peter D Christiansen Chiang Mai, Thailand <*> "[On three of the rules governing the mechanics of compromise] 1. In any conflict between two men (or two groups) who hold the same basic principles, it is the more consistent one who wins. 2. In any collaboration between two men (or two groups) who hold different basic principles, it is the more evil or irrational one who wins. 3. When opposite basic principles are clearly and openly defined, it works to the advantage of the rational side; when they are not clearly defined, but are hidden or evaded, it works to the advantage of the irrational side." -- "The Anatomy of Compromise," Capitalism: The Unknown Ideal <*> - - ------------------------------ Date: Fri, 25 Feb 2000 05:47:45 -0700 From: Subject: [CANSLIM] [Fwd: ACTU - Direct Reply] This is a multi-part message in MIME format. - --------------650421F1BF1501CBCBB76A30 Content-Type: text/plain; charset=UTF-8 Content-Transfer-Encoding: 7bit - --------------650421F1BF1501CBCBB76A30 Content-Type: message/rfc822 Content-Transfer-Encoding: 7bit Content-Disposition: inline Return-Path: Delivered-To: wroblewski@mail-phnx.uswest.net Received: (qmail 9329 invoked by uid 0); 25 Feb 2000 04:17:07 -0000 Received: from mail6.uswest.net (204.147.80.24) by phnxpop3.phnx.uswest.net with SMTP; 25 Feb 2000 04:17:07 -0000 Received: (qmail 66439 invoked from network); 25 Feb 2000 04:17:05 -0000 Received: from fb01.eng00.mindspring.net (207.69.229.19) by mail6.uswest.net with SMTP; 25 Feb 2000 04:17:05 -0000 Received: from pavilion (user-2ivf2oe.dsl.mindspring.com [165.247.139.14]) by fb01.eng00.mindspring.net (8.9.3/8.8.5) with ESMTP id XAA03892 for ; Thu, 24 Feb 2000 23:16:51 -0500 (EST) Date: Thu, 24 Feb 2000 23:16:40 -0500 Message-Id: <4.2.2.20000224230544.00a29180@pop.mindspring.com> From: "Craig Griffin" To: "Ziggy" X-Sender: cagriffin@pop.mindspring.com X-Mailer: QUALCOMM Windows Eudora Pro Version 4.2.2 Subject: Re: ACTU - Direct Reply Mime-Version: 1.0 Content-Type: text/plain; charset="us-ascii"; format=flowed X-Mozilla-Status2: 00000000 Ziggy, I have un-subscribed from the Canslim list for a while (in order to get more other things done). But I am still reading it in the archives (it has only been a couple of days and haven't weaned myself yet). At any rate, since I was one of the ones who said the b/o volume was too low on ACTU (for me, anyway), thought you deserved a reply. You are welcome to forward this to the list if you like (if I try to, it will kick out because I am no longer subscribed). My answer is - sometimes they do this and it is a pain. The large caps are especially prone to "sneak out of the base" in exactly the manner ACTU did it. So, I sometimes buy them when they do. But it is relatively rare for the small and mid caps to do it. Sometimes, when they do, the volume never comes in, and eventually they fall back into the base. But sometimes, especially when the volume shows up, it is a genuine breakout with "late" volume. I know of know way to buy this, unless you just do it as it clears the pivot and set your stop and hope for the best. I had ACTU on my buy list and missed it for just the reasons above. Looked at it again today and put it on the "watch for orderly pullback" list (PB for short). It is an ugly base and thus hard to read, but I would put the primary pivot at 49 5/16 and the secondary pivot at about 53. But it never had volume, as you know, until today, when it was well past both pivots. Sorry, but that is the best I can do. Best Regards, Craig >From: >Subject: Re: [CANSLIM] ACTU B/O > >ACTU finally getting the volume but the stock is up over 31% >since the 2/17 B/O on low volume. >Looking at the chart, where would others in this group have >put the pivot point and made a buy? >Thanks, >Ziggy - --------------650421F1BF1501CBCBB76A30-- - - ------------------------------ Date: 25 Feb 2000 07:09:03 -0800 From: "Tim Fisher" Subject: RE: [CANSLIM] bvf and bbrc I attempt to place them just below support and always above the 50dma. There is wobbly support in the 57-1/2 to 59 area. My stop is therefore probably a bit too high. Like I said I expect to be taken out early but with a 45% profit. At 05:50 PM 2/24/00 -0800, you wrote: >My stop is just a little below yours. I've been trailing stops at the 12-day >low. Are you placing them below gaps? > >Mike > >-----Original Message----- >From: owner-canslim@lists.xmission.com >[mailto:owner-canslim@lists.xmission.com]On Behalf Of Tim Fisher >Sent: Thursday, February 24, 2000 7:04 AM >To: canslim@lists.xmission.com >Subject: Re: [CANSLIM] bvf and bbrc > > >Hmmm, I don't see many if any of the biotechs topping. With all the posts >about getting out too early, I'll keep an eye on BVF. I will anyway since I >own it. FWIW my stop is at 59-3/8 which will probably take me out "early" >and I'll miss 1000% in the next year. QGENF tried to break out again & has >so far held but it was not an encouraging day yesterday for it; maybe this >is the time for them to rest. HGSI and IDPH are resting and CRA is at a new >high after its split so I'd say the group was still strong but probably >falling in GRS. > >I was bounced out of BBRC 2 months or so ago with a 20% profit, so I am >biased towards the negative side. It is off my watch list simply because I >don't want to own stocks that have a habit of stopping me out after a short >run. Otherwise the B/O looks legit & the fundies are good. > >At 08:31 AM 2/24/00 +0200, you wrote: > >Hi, > >WON writes that closing down on high volume could be a sign of topping. So >a > >few days ago (the day *before* the posts about biotechs topping) I decided > >to sell. I was able to get out at 68. That day it went up a bit more, > >touching 70, but by the end of the day it had fallen, and yesterday closed > >at 64 3/4. I don't have a lot of experience with all this, but I enjoyed > >seeing how the advice really helped. > > > >I haven't had time to really research anything to get into. BBRC was listed > >on Tom's DGO list and yesterday it went up 8% on 4X ADV. So I got in at 50 > >1/8 just not to miss it, and set my stop at 46. It closed at 51 3/16. If > >someone could fill me in on the CS fundamentals, and /or comments - I'd > >appreciate it. > > > >David > > > > > > > > > >Many people quit looking for work when they find a job. > >============================================ > >David S. Pinhasik > >Tadiran Information Systems > >@ Chaim Sheba Medical Center - Tel Hashomer, Israel > >+972 3 530 5209 (new) > >+972 3 534 5748 fax > >+1 707 885 7831 US efax > >dsap@shani.net > >============================================ > >This signature and tagline were generated by SchizoSigz! > > > > > > > > > >- > >Tim Fisher, 1995 President, Pacific Fishery Biologists >Ore-ROCK-On Rockhounding Web Site >PFB Information >mailto:tim@OreRockOn.com >WWW http://OreRockOn.com > > >- > > >- Tim Fisher, 1995 President, Pacific Fishery Biologists Ore-ROCK-On Rockhounding Web Site PFB Information mailto:tim@OreRockOn.com WWW http://OreRockOn.com - - ------------------------------ Date: Fri, 25 Feb 2000 08:17:09 -0800 From: Mary Keener Subject: [CANSLIM] Why I want to hold longer - lessons learned? Earl, You wrote: Stock Gain When Sold Gain Now (if I had held) TTIL 22.5% 374% ETEK 5.8% 361% RFMD 52.0% 145% XLNX 10.9% 72% PMCS 7.4% 191% CMVT 72.8% 122% Would you give me an average time you held stocks for the first column, or when did you purchase them? Were you stopped out at 8%? When you say longer term, how long? Looking back is easy. It does, though, show where one might have gone wrong. Beside holding longer, will you continue with stop losses and if so, at what percentage? Would you believe I lost out on CHKP, ETEK and BGEN because I was stopped out? In all cases, I bought at the wrong time. That's what I say, yet these companies are strong and getting stronger. Should I have held on, watched my losses dip below 8%? Sure, I'd be happier today. At least you gained. You can make a lot more. That's what we all want. And you probably will with your method of choosing stocks. Just watch that greed factor. It can overpower you. Mary - - ------------------------------ Date: Fri, 25 Feb 2000 10:44:16 CST From: "Ricardo Bekin" Subject: [CANSLIM] GTNR GTNR it's a NASDAQ small-cap, I don't know how to check the CANSLIM numbers, but the sales and earnings are growing at a good clip failed b/o a few weeks ago, I bought it and it went nowhere, it may be trying again today Ricardo ______________________________________________________ Get Your Private, Free Email at http://www.hotmail.com - - ------------------------------ Date: Fri, 25 Feb 2000 08:44:41 -0800 From: Tim Fisher Subject: [CANSLIM] AMCC Looks very convincing today. Wish I had some cash! Tim Fisher Ore-Rock-On and Pacific Fishery Biologists WWW Sites Tim@OreRockOn.com WWW: http://OreRockOn.com See naked fish and rocks! - - ------------------------------ Date: Fri, 25 Feb 2000 23:51:39 +0700 From: "Peter D. Christiansen" Subject: [CANSLIM] ASWX Breaks Out ASWX is breaking out on good volume. - -- Peter D Christiansen Chiang Mai, Thailand <*> "[On three of the rules governing the mechanics of compromise] 1. In any conflict between two men (or two groups) who hold the same basic principles, it is the more consistent one who wins. 2. In any collaboration between two men (or two groups) who hold different basic principles, it is the more evil or irrational one who wins. 3. When opposite basic principles are clearly and openly defined, it works to the advantage of the rational side; when they are not clearly defined, but are hidden or evaded, it works to the advantage of the irrational side." -- "The Anatomy of Compromise," Capitalism: The Unknown Ideal <*> - - ------------------------------ Date: Fri, 25 Feb 2000 13:02:19 EST From: JANSI1AUG1@aol.com Subject: [CANSLIM] Re. Selection of what to Buy & A/D:U/D Earl and Tom: Earl, you wrote in the latest Canslim Digest: >>We have been discussing various approaches to CANSLIM with my input being that I am trying to pick "leaders" and hold longer. I've changed my selection process somewhat, and have been astounded by the success so far.<< Would you reveal in what way you have "changed your selection process...." That is, what is the basis you have for buying a stock now compared with before. Please be specific on some of your stock picks (before and after), and also on the reasons you selected THOSE stocks (before and after). Thanks. Tom: Have you ever found a relationship (correlation-I don't expect there would be any cause and effect) between DG-Online's A/D and U/D. jans (jansi1aug1@aol.com) - - ------------------------------ Date: Fri, 25 Feb 2000 13:03:33 -0500 From: "Matt Robinson" Subject: Re: [CANSLIM] GTNR Looks decent. Price action is good...........breaking out on about triple ADV. Only conern is they only had 35% growth in revenues of 14.5mil for 6 months ending 12/31/99. On a side note, I was thinking about how funny it is that something that was given little thought of having value/potential yesterday (not literally yesterday but in the past) can all of sudden either have value or perceived value. Sometimes, there is an amazing potential in things that are overlooked. For example, Xerox greating the GUI and mouse and then letting Apple just use. They saw little value in it and were more concerned with copiers. An example where I think the perceived value is high, but the actual value isn't quite there: IPIX. I am sure you have all seen their ads for 3d web pictures. While this is all well and good, that is what their business is based on and valued at 1.5bil. Anyone ever heard of Quicktime VR. It was an extension of Quicktime that Apple made years ago. While I haven't looked into IPIX technology so I could be wrong, it appears to be exactly the same thing. I have been kind of looking at 2 IT services companies: RCMT and INOD. INOD looks better technically, but RCMT looks better funamentally (both in value and growth). Any thoughts? Matt - ----- Original Message ----- From: Ricardo Bekin To: Sent: Friday, February 25, 2000 11:44 AM Subject: [CANSLIM] GTNR > GTNR > > it's a NASDAQ small-cap, I don't know how to check the CANSLIM numbers, but > the sales and earnings are growing at a good clip > > failed b/o a few weeks ago, I bought it and it went nowhere, it may be > trying again today > > Ricardo > > ______________________________________________________ > Get Your Private, Free Email at http://www.hotmail.com > > > - > __________________________________________________ Do You Yahoo!? Talk to your friends online with Yahoo! Messenger. http://im.yahoo.com - - ------------------------------ Date: Fri, 25 Feb 2000 11:05:09 -0800 From: Tim Fisher Subject: [CANSLIM] The Gospel according to Jubak How to Tell a Loser from a Wounded Winner By Jim Jubak Senior Markets Editor, MSN MoneyCentral 2/25/00 12:58 PM ET Sell your losers and let your winners run. Great advice. But like other bits of Wall Street wisdom ("Buy low, sell high!"), it's easier to put on a bumper sticker than it is to execute. Let's not even worry about the psychological barriers that make it hard for investors to get rid of a stock that's under water. Nobody likes to admit a mistake -- or to surrender to the fear that sometimes makes us sell too soon. Instead, let's stick to an even more basic problem: How do you decide if a stock is a loser or a winner? Seems simple enough, doesn't it? A loser is a stock that's gone down in price since you've owned it. A winner is one that's gone up since you tucked it into your portfolio. But I'm afraid it's a lot more complicated than that. All winners go through periods when they look like losers. A stock can turn from a winner into a loser so gradually that an investor doesn't even notice. And simple mathematical formulas, like selling when a stock drops by 10%, don't work very well for investors -- whatever their usefulness to traders. Take a look at Puma Technology (PUMA:Nasdaq - news - boards), a Jubak's Pick on Dec. 14, 1999. For the next two months, the stock behaved like a loser. By Dec. 28, it was down almost 20 a share, a loss of slightly more than 20%. Time to sell that sucker, no? No! That day marked the low for the stock. Branding Puma a loser and selling then would have meant maximizing your loss and missing the explosive rally that began on Feb. 14 and has since taken the stock up to 133, which is 46% above the Dec. 14 recommendation price. Or what about Qualcomm (QCOM:Nasdaq - news - boards)? Winner or loser? The stock was up 2,619% in 1999. "Winner! Let it ride." But the stock is down 17% since Jan. 3, 2000. "Loser! Sell and cut your losses." You can't have it both ways, of course, so Qualcomm can't be both a hold and a sell at the same time. Loser or winner? How do you decide? I'm going to divide the problem in half. In this column, I'm going to take up the question of how to decide a stock that you own is a loser and that it's time to dump. Using examples such as Puma, Qualcomm, America Online (AOL:NYSE - news - boards), Dell Computer (DELL:Nasdaq - news - boards), Vitesse Semiconductor (VTSS:Nasdaq - news - boards) and ARM Holdings (ARMHY:Nasdaq - news - boards), I'll see if I can develop a general framework for defining a "loser." And in my next column, I'll follow the same process with a different set of examples to see if I can come up with a useful definition of a "winner." 1. No Stock Goes Straight Up Forever Obvious, perhaps, but critical. Everything else builds on this fact. Again, take a look at Puma. The stock began an astronomical rise on Aug. 30, 1999, taking it to 71 3/4 on Dec. 28. As the stock climbed, the price got further and further above the 50-day moving average -- an indication that the stock's gains were accelerating as it climbed. Then, on Dec. 29, the stock went vertical. It climbed to 131 for a gain of 60, or almost 85% in just three trading sessions. This type of spike is almost never sustainable. Some investors always decide to take profits, figuring that much of the gain they projected is already in the stock. That initial profit-taking sends the stock price down and encourages other selling by investors who want to lock in their outsized gains. Typically, you'll see a strong surge in volume as the selling commences and a lot of investors head for the door at once. That profit-taking can go on for a while, as other investors see the stock failing to go up as they'd hoped. And it's quite normal for a stock to retrace almost all of that last spike. By the end of January, for example, Puma was down to 76 3/4, within striking range of the 71 3/4 price on Dec. 28. But as long as volume drops as this selling goes along, an investor usually has nothing to worry about. If fewer sellers appear as the price declines, it's a pretty good sign that the body of investors who hold this stock continues to believe in its future and still wants to keep the shares. At some point, indeed, the price starts moving sideways, marking time by moving up a few points, then down a few, but showing very little net change. In early February, Puma marked time in a range between 80 and 85. And a drop to just about 80 on Feb. 11 marked the turning point for the stock. The next day, on a significant increase in volume, Puma resumed the upward trend that the stock had established in 1999. This isn't an unusual pattern, although it is unusually clear in the case of Puma. ARM Holdings, for example, shows a similar explosion from the 50-day moving average at 48 on Oct. 1 to a high of 200 a share on Dec. 28. The stock then pulls back to the 50-day moving average, moves up to a new high of 242, and then pulls back to the moving average again. None of this action, however, violates the long-term upward trend of the stock. 2. Time Counts For a long-term investor, which I define as someone planning to hold a stock for five or more years, the December dips in Puma and ARM Holdings essentially are irrelevant. The best thing to do is hold right through them, as long as the stock doesn't violate its underlying upward trend. I think that's true as well for an investor with a holding period of a year to 18 months -- the holding period in Jubak's Picks. But what if I stretched out exactly the same price decline for Puma over three months, instead of five weeks? Or nine months, instead of five weeks? Then, I think the same percentage price decline would be much more significant. From Feb. 2, 1997 to Feb. 2, 1999, Dell's stock gained 1,207%. But since the stock hit 54 on Feb. 2, 1999, after a sharp spike that resembles those I've pointed out in the cases of Puma and ARM Holdings, Dell has been stuck in a trading range between 40 and 50. Total loss from that high to the Feb. 23 price of just a tad less than 40 is about 25%. That's not a huge drop in comparison to the 41% Puma fell in the month after Dec. 31. But the duration of the decline makes it much more significant. 3. Forget Lifetime Performance An investor who bought Dell in February 1997 would have been up 1,207% in February 1999. An investor who held from Feb. 2, 1997, through Feb. 23, 2000, would be showing a gain of 860%. I certainly would never sneer at an 860% return. But the life of the investment gain disguises the fact that this long-term winner has been a loser for more than a year now. This is exactly what I was afraid was happening to Vitesse Semiconductor in December and January. From Nov. 10, 1998, through Nov. 10, 1999, the stock gained 172%. But then it stalled. What had initially seemed to me to be a healthy rest started to look like a decisive break in the stock's upward trend. That's what led me to put Vitesse on my list of stocks to sell in my Feb. 4 column, Finding the Upside in an Up-and-Down Market. But on Feb. 9, the stock broke decisively above the 50 level. And it has since moved up to near 70 before settling into another range. Is Vitesse a winner or a loser? I don't think you can tell right now by looking at past price movements. And that brings me to my next observation. 4. A Loser With a Great Future Isn't a Loser Is Vitesse a loser that should be sold now? How about Dell? Well, it depends not on the stocks' past, but on their future. A stock with Dell's past is a sell if you think the future is full of the negative surprises on earnings and revenue that have hurt the company over the last year. It's a hold or a buy if you think the company's new products and initiatives are going to reignite growth. I admit that analysis is harder than just looking for patterns in a chart, but I don't think there's any other way to avoid selling a stock that you should have held just as business is about to pick up. If you don't own a stock, you've got the luxury of waiting to buy until the charts show signs of an upturn. But if you already own it, you're torn between holding and selling precisely because you don't see any pattern that might indicate an upturn. For example, the argument against selling Vitesse here -- and the one that has been made by the analysts who have slapped 12-month target prices of 100 on the stock -- is that the problems caused by inventory reductions at Lucent Technologies (LU:NYSE - news - boards) are over. The company has, in fact, scored key design wins in Lucent's new WaveStar optical networking system. In addition, these analysts point out, Vitesse has added Nortel Networks (NT:NYSE - news - boards) as a significant customer. Three recent design wins at Nortel should turn into significant revenue for Vitesse in the current quarter. And by the end of 2000, sales to Nortel could be responsible for 10% of Vitesse's revenue. Frankly, I'm skeptical about Lucent. But the design wins at Nortel, the top dog in optical networking at the moment, are significant. These fundamental factors about the future incline me to hold Vitesse rather than sell it -- at least until I see how these trends play out in the quarter. How about other potential sells, such as Dell, Qualcomm and America Online? Dell seems to face tough going for at least the next two quarters. Parts remain expensive because supplies are extremely tight, and that's likely to cut into margins at all the PC makers. I like Dell's prospects in the last half of the year, but not over the next six months. The stock is a sell rather than a hold here. (I'm selling it out of Jubak's Picks with publication of this column.) Qualcomm, by contrast, strikes me as a hold on its near-term future prospects. The company has been telling analysts recently that it expects to pick up market share in the CDMA wireless-phone chip business. Just as the growth rate in Korea, the traditional growth driver for CDMA phones, is slowing due to market saturation, growth in Japan and Latin America is picking up. The decline from near 180 at the end of December to a trading range of 130 to 140 in February should make it possible for positive news in these areas to move the stock up. (If you like the general stock market more than I do right now and you don't already own Qualcomm, it's a buy at current prices.) And America Online? The analyst community finally has started to get comfortable with the business of a combined America Online and Time Warner (TWX:NYSE - news - boards). Much of the stock's fall to a low below 50 a share was the result of silence from every Wall Street investment house. In this context, Merrill Lynch's recent report on the deal, which recommended both Time Warner and America Online, is a significant breakthrough. The other major brokerages won't lag far behind now. Merrill's 90 target price on America Online immediately moved the stock. I'd call this one a hold as well if you already own it. So much for the "Sell your losers" half of the adage. I've deliberately tackled the easier half first. Even though selling a stock that's under water can be a blow to the ego, I don't think it causes anywhere near the anxiety that holding onto a winner does. I'm not sure what that says about investors -- perhaps we all think disaster must follow hard on the heels of any good fortune. Next column: How to hold onto your winners. Tim Fisher Ore-Rock-On and Pacific Fishery Biologists WWW Sites Tim@OreRockOn.com WWW: http://OreRockOn.com See naked fish and rocks! - - ------------------------------ End of canslim-digest V2 #833 ***************************** 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.