From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #191 Reply-To: canslim Sender: owner-canslim-digest@lists.xmission.com Errors-To: owner-canslim-digest@lists.xmission.com Precedence: bulk X-No-Archive: yes canslim-digest Thursday, April 16 1998 Volume 02 : Number 191 In this issue: [CANSLIM] Re. 3/7/10 EMA Re: [CANSLIM] Results of Earnings/Momentum Screen Re: [CANSLIM] Results of Earnings/Momentum Screen Re: [CANSLIM] online firms -- Datek Re: [CANSLIM] TMBS earnings Re: [CANSLIM] Results of Earnings/Momentum Screen Re: [CANSLIM] Re. 3/7/10 EMA Re: [CANSLIM] Results of Earnings/Momentum Screen Re: [CANSLIM] TMBS earnings RE: [CANSLIM] Results of Earnings/Momentum Screen [CANSLIM] Tradinjg Re: [CANSLIM] Results of Earnings/Momentum Screen Re: [CANSLIM] Tradinjg Re: [CANSLIM] Results of Earnings/Momentum Screen Re: [CANSLIM] Results of Earnings/Momentum Screen RE: [CANSLIM] FFTI Breakout [CANSLIM] Netscape and Ameritrade Re: [CANSLIM] Tradinjg RE: [CANSLIM] Results of Earnings/Momentum Screen Re: [CANSLIM] TMBS earnings Re: [CANSLIM] Results of Earnings/Momentum Screen Re: [CANSLIM] Results of Earnings/Momentum Screen Re: [CANSLIM] MF sometimes inverted? Re: [CANSLIM] NYSE New Highs Re: [CANSLIM] Results of Earnings/Momentum Screen Re: [CANSLIM] Results of Earnings/Momentum Screen Re: [CANSLIM] Results of Earnings/Momentum Screen ---------------------------------------------------------------------- Date: Thu, 16 Apr 1998 14:18:34 EDT From: JANSI1AUG1 Subject: [CANSLIM] Re. 3/7/10 EMA Connie, I've wondered this before, but I mention the question today because your recent analysis of getting into the cup or handle BEFORE the breakout is interesting. Your decision to enter seems based on the penetration of the 3/7/10 EMA (whenever the stock is in the proper C&H chart formation). My question is what is "EMA"? Is that an Exponential Moving Average? And does that mean that you use 3 periodicities of them, viz., the 3,7,10? (Also, what penetration are you looking at: The daily through the 3, the 3 through the 7, the 7 through the 10, etc.? Which penetration-permutation seems significant to you?) jans - - ------------------------------ Date: Thu, 16 Apr 1998 14:20:12 -0400 From: Craig Griffin Subject: Re: [CANSLIM] Results of Earnings/Momentum Screen My main point was two fold: 1) lower priced stocks tend to be of lower quality in general, and 2) there is no reason for anyone to use lack of capital as a reason for buying lower priced stocks. You wrote: >Craig, check your math. In the first three examples of "spread" (which >is the difference between the bid and ask) you use only half the >spread in your calculation. But in later example you use the entire >spread, giving an incorrect comparison. Tom, check your math. Can't find any error in my math. But, maybe I overlooked it - so if you would, please point out the exact error and I will be happy to repost corrected figures. I quickly rechecked and all examples appear to use the entire spread. Which one is in error exactly? The point is, stocks with prices below $12 tend to be of lower quality and tend to have larger (percentage) spreads. There may be a lot of different reasons. It may be, as Robert points out, a result of volatility. I also tend to believe that the market maker's accessment of the risk, the average daily volume, and the institutional interest in the stock all contribute to the size of the spread. The other thing that, of course helps to determine it are the limit orders currently on the books. Finally, of course, the price itself is a factor simply because of a related factor: rarely do spreads drop below 1/16 of a point. And in fact most of the time they are 1/8 to 1/2. A 1/8 spread on a $10 stock is exactly the same percentage as a 5/8 spread on a $50 stock. Similarly, a 3/8 spread on a $10 stock is exactly the same as a 1 7/8 point spread on a $50 stock! Same exact percentages, but I know lots of people who will buy a $10 stock with a 3/8 spread without thinking twice and yet balk at a 1 point spread on a $50 stock. One's thinking as a Canslimer has to be based on percentages, not dollars. - - ------------------------------ Date: Fri, 17 Apr 1998 01:39:14 +0000 From: Peter Christiansen Subject: Re: [CANSLIM] Results of Earnings/Momentum Screen >The point is, stocks with prices below $12 tend to be of lower quality and >tend to have larger (percentage) spreads. >Finally, of course, the price itself is a factor simply because of a >related factor: rarely do spreads drop below 1/16 of a point. And in fact >most of the time they are 1/8 to 1/2. A 1/8 spread on a $10 stock is >exactly the same percentage as a 5/8 spread on a $50 stock. Similarly, a >3/8 spread on a $10 stock is exactly the same as a 1 7/8 point spread on a >$50 stock! Same exact percentages, but I know lots of people who will buy >a $10 stock with a 3/8 spread without thinking twice and yet balk at a 1 >point spread on a $50 stock. >One's thinking as a Canslimer has to be based on percentages, not dollars. Agree 100%. I fail to see the logic in Tom's argument. Peter Christiansen Chiang Mai - Thailand - - ------------------------------ Date: Thu, 16 Apr 1998 14:55:21 EDT From: DCSquires Subject: Re: [CANSLIM] online firms -- Datek In a message dated 98-04-16 14:35:54 EDT, you write: << Does anybody know much about Datek. I understand there trade commission is $9.99 regardless of size or type of trade. A friend of mine is opening an account there. >> I use Datek and have been quite happy with them. Order execution is everything to me and with only on exception all of my executions have been flawless. However, this is deep deep deep discounter with not much service. The only other drawback is I can't place stop orders on the NYSE, but they are working on it. DSquires - - ------------------------------ Date: Thu, 16 Apr 1998 15:05:33 EDT From: DCSquires Subject: Re: [CANSLIM] TMBS earnings Hi all, TMBS is ralling on comparatively less volume than its last advance. This is a sign to be carful. Also, many of the recent up days have come on average or less than average volume. DSquires - - ------------------------------ Date: Thu, 16 Apr 1998 14:39:55 -0400 From: Tom Worley Subject: Re: [CANSLIM] Results of Earnings/Momentum Screen Craig, I have already deleted your original post, but if you look at the amount within the parenthesis that is being divided in the first three examples, you will see that it is half of the stated spread, being divided by the average of the bid and ask. In the following example (SIRN) the amount being divided is the full spread. One factor with lower priced OTC stocks not mentioned is that they tend to have fewer market makers. Much as MMers are criticized and damned, they serve a very useful purpose, and that is creating liquidity. Even tho the new Order Display rules were fully implemented last fall, I still find a lot of investors, as well as most of the brokers that I used to work with, that are not taking advantage of this change. Over time, education and maturity will likely change this. I have traded a number of stocks under $20 by buying a sixteenth over the bid or selling just under the offer. You just have to be willing to take the chance you won't get executed, and expend the effort to watch the market until your order is done. As far as "quality" goes, price has nothing to do with it unless you factor things like liquidity and spread and nr of MMers into a "quality" evaluation. A company's "quality" can be found at any trading price, it depends on the company's structure, integrity, disclosure, awareness of the rules, products or services, etc, as well as how analysts and other market professional view the company. Tom W - -----Original Message----- From: Craig Griffin To: canslim@lists.xmission.com Date: Thursday, April 16, 1998 2:18 PM Subject: Re: [CANSLIM] Results of Earnings/Momentum Screen > My main point was two fold: > 1) lower priced stocks tend to be of lower quality in general, and > 2) there is no reason for anyone to use lack of capital as a reason >for buying lower priced stocks. > >You wrote: >>Craig, check your math. In the first three examples of "spread" (which >>is the difference between the bid and ask) you use only half the >>spread in your calculation. But in later example you use the entire >>spread, giving an incorrect comparison. > >Tom, check your math. Can't find any error in my math. But, maybe I >overlooked it - so if you would, please point out the exact error and I >will be happy to repost corrected figures. I quickly rechecked and all >examples appear to use the entire spread. Which one is in error exactly? > >The point is, stocks with prices below $12 tend to be of lower quality and >tend to have larger (percentage) spreads. > >There may be a lot of different reasons. It may be, as Robert points out, >a result of volatility. I also tend to believe that the market maker's >accessment of the risk, the average daily volume, and the institutional >interest in the stock all contribute to the size of the spread. The other >thing that, of course helps to determine it are the limit orders currently >on the books. > >Finally, of course, the price itself is a factor simply because of a >related factor: rarely do spreads drop below 1/16 of a point. And in fact >most of the time they are 1/8 to 1/2. A 1/8 spread on a $10 stock is >exactly the same percentage as a 5/8 spread on a $50 stock. Similarly, a >3/8 spread on a $10 stock is exactly the same as a 1 7/8 point spread on a >$50 stock! Same exact percentages, but I know lots of people who will buy >a $10 stock with a 3/8 spread without thinking twice and yet balk at a 1 >point spread on a $50 stock. > >One's thinking as a Canslimer has to be based on percentages, not dollars. > > > > >- > - - ------------------------------ Date: Thu, 16 Apr 1998 14:49:26 -0400 From: Connie Mack Rea Subject: Re: [CANSLIM] Re. 3/7/10 EMA Jans-- You're right on with the EMA. Must be careful not to refine out the significance the use of the 3/7/10 EMA. I.e., the first buy signal and, therefore, the most sensitive, is the passing of the 3-line through the 7. The next signal would be the passing of the 3-line through the 10. Finally, and the least sensitive, would be he passing of the 7-line through the 10. I have found that my strongly restrictive use of OBV/MF permits me to feel fairly safe by acting on the first buy given by the 3/710. The Canslimer might wish for the 3-line or the 7-line to pass through the 10-line before acting. Remember that the 3/7/10 EMA is pretty damn fast and can jerk you around. The Canslimer might find a 5/10/15 or 5/10/20 more amenable. The stock beta might give a hint about which buy signal to act on. The higher the beta, the faster the buy [and sell] signals will occur. Let me know if I've left something unanswered. Thanks for the mail. Connie Mack JANSI1AUG1 wrote: > Connie, > > I've wondered this before, but I mention the question today > because your > recent analysis of getting into the cup or handle BEFORE the breakout > is > interesting. Your decision to enter seems based on the penetration of > the > 3/7/10 EMA (whenever the stock is in the proper C&H chart formation). > > My question is what is "EMA"? Is that an Exponential Moving > Average? > And does that mean that you use 3 periodicities of them, viz., the > 3,7,10? > (Also, what penetration are you looking at: The daily through the 3, > the 3 > through the 7, the 7 through the 10, etc.? Which > penetration-permutation > seems significant to you?) > > jans > > - - - ------------------------------ Date: Thu, 16 Apr 1998 14:41:02 -0400 From: "James Adams" Subject: Re: [CANSLIM] Results of Earnings/Momentum Screen Replying to many who said a variety of things-- Craig is it verifiable that "lower priced stocks tend to be of lower quality in general" or is this one of those "old wives tales" Tom was mentioning in his post. I have heard that lower priced=lower quality, from different sources, but they disagreed on a price where the quality goes south, for example I've read that anything below $20 is suspect, while in other places I've read that $15-25 is a decent range with anything below 12 being out of the question. Also you write and Tim Fisher seems to agree "there is no reason for anyone to use lack of capital as a reason for buying lower priced stocks." In theory yes, however a $1.00 gain on a thousand shares of stock x which cost me $20 is more enriching than a $1.00 on 250 shares of stock y which cost $50. Since I don't invest in stock based 401K or IRA then my reason for investing as I do would be somewhat different than someone who is looking for long term stability of a such a portfolio(s). Tom you wrote "If you are going to focus on stocks under $20 (and I'll disagree with some of the comments already posted, I have made some nice money on these) then you must recognize that by and large these are stocks not closely followed by the investment community. " No kidding. My screen before I included this last criteria turned up 25 stocks rather than the 3 that I ended up with. I'm going to re-run the screen using the suggestions that you mention vis-a-vis EPS projections, etc. Again, I think the discussions today have illustrated the importance of this list. I do appreciate the stocks that are mentioned from time to time, but the theory and dialogue is priceless. I guess the adage "give a man a fish....teach him to fish....." is proven once again. Thanks, James Adams......................Maysville, KY USA http://www.cris.com/~jimadams/ Internet Pager 1343361@pager.mirabilis.com - - ------------------------------ Date: Thu, 16 Apr 1998 15:36:41 EDT From: Mulack Subject: Re: [CANSLIM] TMBS earnings At 2:30 Central I show the volume at 316,800 compared to yesterdays of 75,400. That comes to 3xvolume. If this is incorrect please let me know. Thanks Frank - - ------------------------------ Date: Thu, 16 Apr 1998 12:39:50 -0700 From: Mike Lucero Subject: RE: [CANSLIM] Results of Earnings/Momentum Screen You know what Wade Cook says (I haven't bought his book): Buy a stock that's split 2/1. When it goes back to the pre-split price, you'll have doubled your money! Plus, if you bought just before the split, you'll have twice as many shares! Mike On Thursday, April 16, 1998 11:41 AM, James Adams [SMTP:jimadams@may-uky.campus.mci.net] wrote: > Replying to many who said a variety of things-- > > > Also you write and Tim Fisher seems to agree "there is no reason for anyone > to use lack of capital as a reason for buying lower priced stocks." In > theory yes, however a $1.00 gain on a thousand shares of stock x which cost > me $20 is more enriching than a $1.00 on 250 shares of stock y which cost > $50. Since I don't invest in stock based 401K or IRA then my reason for > investing as I do would be somewhat different than someone who is looking > for long term stability of a such a portfolio(s). > > > Thanks, > James Adams......................Maysville, KY USA > http://www.cris.com/~jimadams/ > Internet Pager 1343361@pager.mirabilis.com > > > > - - ------------------------------ Date: Thu, 16 Apr 1998 14:48:08 -0500 (CDT) From: mckeener@ix.netcom.com Subject: [CANSLIM] Tradinjg Hi Connie, Tom and all, Once again, thanks for your very detailed and precise information on charting, Connie. But I can't get beyond your first sentence of clicking for another screen in the upper left corner. Is it because I have netscape communicator? I agree, Tom, netscape isn't the best, by far. Tom, have you checked E. Brown and Company - $5 a trade on the internet or by telebroker for a market order, but you have to open an account with at least $15,000. Their limit and stop orders are very reasonable too - $8 and $10??? Retired with some income should get you approved. Regards, Mary Keener McKeener@ix.netcom.com - - ------------------------------ Date: Thu, 16 Apr 1998 15:56:08 -0400 From: Robert Bomba <73223.2767@compuserve.com> Subject: Re: [CANSLIM] Results of Earnings/Momentum Screen >> Craig is it verifiable that "lower priced stocks tend to be of lower quality in general" or is this one of those "old wives tales" Tom was mentioning in his post << Hi James, Let me give you my 2 cents & that may be all it's worth (G). The biggest reason for the problems with lower priced stocks is the fact that the "Big Boys" can't buy them with out moving the market. IOW's a guy/gal buying Ten million dollars worth of a $100 stock won't have the same effect as it would if they bought 10,000,000 of a $10 stock. Which is why IMHO the large caps are out performing the small caps. A guy named Jim O'Shaunsey (sp) who wrote the book "What works on Wall Street" makes that point in the book. Bob - - ------------------------------ Date: Thu, 16 Apr 1998 16:08:28 -0400 From: Connie Mack Rea Subject: Re: [CANSLIM] Tradinjg Mary-- Unlike Tom, I prefer Netscape Communicator 4 over Internet 4. Let's see if I can get you set up. Enter: http://www.bigcharts.com In the upper box [Enter Symbol or Keyword], enter a stock symbol and click "Interactive Chart." Be sure to wait until BC brings up its own default stock [INTC in blue]. BC will then bring up your entered chart and all the options for charting will appear in the left frame. Notice that just below the price, etc. Zack's, Hooover, and EDGAR is available. Let me know if you're still not getting set up. Connie Mack mckeener@ix.netcom.com wrote: > Hi Connie, Tom and all, > > Once again, thanks for your very detailed and precise information on > charting, Connie. But I > can't get beyond your first sentence of clicking for another screen in > the upper left corner. Is > it because I have netscape communicator? > > I agree, Tom, netscape isn't the best, by far. Tom, have you checked > E. Brown and Company - $5 a > trade on the internet or by telebroker for a market order, but you > have to open an account with at > least $15,000. Their limit and stop orders are very reasonable too - > $8 and $10??? Retired with > some income should get you approved. > > Regards, > Mary Keener > McKeener@ix.netcom.com > > - - - ------------------------------ Date: Thu, 16 Apr 1998 16:10:14 -0400 From: Mark Schiffner Subject: Re: [CANSLIM] Results of Earnings/Momentum Screen > >HYSW spread = bid 42 1/2, ask 43 = 1/2 spread = 1.2% spread (.5 / 43). >AFCI spread = bid 40 15/16, ask 41 = 1/16 spread = 0.2% spread (.0625 / 41) >MDLK spread = bid 21 1/4, ask 22 = 3/4 spread = 3.4% (.75 / 22) > >SIRN spread = bid 6 3/4, ask 6 15/16 = 3/16 spread = 2.7% (.1875 / 6.9375) > >Not just awful, but lookout for stocks lie this: > bid 10, ask 10 3/4 (7.5%) > or bid 8, ask 8 1/2 (6.25%) > or bid 2, ask 2 1/4 (12.5%) YIKES!. > After Tom's comments I went back a looked, I believe he noticed that on HYSW, AFCI, MDLK and SIRN you divided by the ask instead of the bid to get the percentage: HYSW (43 - 42.5) / 42.5 = 1.176% (or 1.2% rounded - same value after rounding) AFCI (41 - 40.9375) / 40.9375 = .152% (or 0.2% rounded - again the same after rounding) MDLK (22 - 21.25) / 21.25 = 3.52% (or 3.5% rounded) SIRN (6.9375 - 6.75) / 6.75 = 2.77% (or 2.8% rounded) The other three are correct (10.75 - 10) / 10 = 7.5% (8.25 - 8) / 8 = 6.25% (2.25 - 2) / 2 = 12.5% Of course this does not change your point that the percentages can be much higher for the lower priced stocks, which someone mentioned may be because of lower volume rather than lower price - maybe ther is a coorelation between the two :-) But what do I know Mark Schiffner - - ------------------------------ Date: Thu, 16 Apr 1998 16:15:58 -0400 From: Craig Griffin Subject: Re: [CANSLIM] Results of Earnings/Momentum Screen James, At 02:41 PM 4/16/98 -0400, you wrote: >Also you write and Tim Fisher seems to agree "there is no reason for anyone >to use lack of capital as a reason for buying lower priced stocks." In >theory yes, however a $1.00 gain on a thousand shares of stock x which cost >me $20 is more enriching than a $1.00 on 250 shares of stock y which cost >$50. Since I don't invest in stock based 401K or IRA then my reason for >investing as I do would be somewhat different than someone who is looking >for long term stability of a such a portfolio(s). The point is that stocks don't go up and down in dollars, they go up by percent. This sounds stupid, so let me explain. What is the chance of a $1 going up by a dollar in the next 3 months? Odds are low - because that is a double - 100%. What is the chance of a $50 stock going up by $50 in 3 months? Same deal, low odds because it is a double. What are the odds that a $1 stock will go up 25 cents. Not too bad actually, many stocks have a trading range more than 25%. What about a $50 stock going up $12 1/2. Same deal - 25%. Here it is - bottom line. If you can pick, in advance, any stock that will go up 25% from where you bought it and do it 2 times out of 3 - you win. So we want stocks that go up 25% or more. Who cares about $1? Talking about $1 is meaningless. It is not logical to even talk about. (No offense intended to anyone - just being direct). So, we buy stocks with CANSLIM elements, breaking out of bases and aim for 25% gains. There are more CANSLIM type stocks in the $12 to $80 price range than there are in the $5 to $10 price range. You can just plain forget stocks below $5 a share IMO. Most are terrible, the rest are bad (ok once in a while one pops out of there - but it is literal needle in a haystack type search to find it). From $12 to $25 you tend to get the young bucks. Entrepeneurial companies that just might be on to something big or might not. Sometimes they go 2 or 3 months or 2 or 3 years before fizzling out or getting overtaken. Sometimes they pull an Everready rabbit and go for years and years. From $25 to $50 you tend to get the more of the middle teer - getting strong, young adult companies on the move. Up from there the more solid longer performing warhorses. Now I am not talking about all the stocks in the market. I am talking about the Canslim stocks in each category. Why are they priced that way? I don't know. It is just how it has been for years. Now take a $12 stock, like EPIQ. Nice little company. Might do well for years. Can't tell but watch earnings, price and volume and pick your entry point coming out of a base (if it does). Leader in their niche. If things don't work out - they will never come out of the base and you will not own it. Take a $45 stock like EAII. It is kind of like an EPIQ, grown up. Teenager no more. Maybe about to hit its stride. A bit of a surer step. Leader in their niche. Maybe about to b/o of a short base now (I already own it from the last breakout). Now take a market leader like Dell. This is no niche - it is a huge market they are winning in (like GM and Ford in the 50's). Computers are now as much a part of life as the automobile. American, forget that, think world markets. How about Microsoft 10 years ago. How about MSFT today - is this like IBM in 1965 or IBM in 1979? What's next? The INTERNET. Why are the YHOO's and AMZN's of the world flying so high. Because a lot of folks are betting on the next MSFT, and the one's that look like the clear winners - why if you bet right, it is like buying MSFT 2 years after the IPO. It seemed impossible that it could go higher. But it had just begun to go. But MSFT was never a $10 stock. Or if it was, would it have hurt you to wait for it to poke its head up above the crowd and buy it then? Do any of these sub-$12 stocks look like big winners? Nope, but YHOO just might be. Has been already. Is it over? Look at how many people said it was too high when it came out of it's last base. About 8 years ago on Prodigy, I was reading a thread on CSCO where a guy proved that it would have to continue to grow 35% a year for 10 years to make it's valuation reasonable and he KNEW that was impossible - so he was shorting it. Wonder how long that lasted. Pull up a 10 year chart on CSCO sometime. Never a $10 stock. Well I got way of the subject. Sorry. Just remember - anything with any legs to it has to pass $12 sometime and that's the time to catch it. Let the price be a first pass filter for you - - sure you will miss a few 30% runs - but you'll get your share in the higher priced merchandise. Same 30% - you just own fewer shares for the same dollar amount. But the odds of finding something worthwhile are higher. - - ------------------------------ Date: Thu, 16 Apr 1998 14:34:46 -0400 From: Craig Griffin Subject: RE: [CANSLIM] FFTI Breakout At 01:27 PM 4/16/98 -0400, you wrote: > >> Where would the buy point be? Yep, 6 would have been a nice price. But using CS principles you could have bought as it crossed the pivot at 9 3/8 on breakout volume on 03/26/98. There is no base since then and if you buy here you must use other technical factors than those specifically covered by Canslim. This is a nice exception for the rule of avoiding stocks under $12. Nothing in the market is an absolute. As I have said before, I occasionally buy stocks in this price range. But it is less than 10% of my buys. They really need to be the best of the best. If you look at the CS numbers (5 yr earnings, last 4 qtrs compared to prior 4 qtrs) and look at EPS rank 89 and RS on the breakout (presumably in the 80's. Look at N (new high in price). Look at S (shares outstnding = 6.5 million). Look at the other elements L, I - can't tell from DG. Need to know more about the company and its products and competition. - - ------------------------------ Date: Thu, 16 Apr 1998 13:33:43 -0700 From: "Joe J." Subject: [CANSLIM] Netscape and Ameritrade Well, Joe "don't know a thing" I hope you jumped into Netscape as it was up almost $6 to 25 9/16. Nice call. Tom was looking for an online broker. I use Ameritrade ($8 for market orders, $13 for stops & limits). I'm pretty satisfied with them. I had an account with Suretrade that I had to close - my orders kept getting rejected for no reason. They told me on the phone that they are having alot of problems and were not surprised I was closing my account. Joe J. - - ------------------------------ Date: Thu, 16 Apr 1998 16:19:36 -0400 From: Robert Bomba <73223.2767@compuserve.com> Subject: Re: [CANSLIM] Tradinjg >> Brown and Company - $5 a trade on the internet or by telebroker for a market order, but you have to open an account with at least $15,000. Their limit and stop orders are very reasonable too - $8 and $10??? << Hi Mary, I use them myself. Have for years & have never had a problem. $5.00 Market Orders & 10.00 Limit or Stop order. Bob - - ------------------------------ Date: Thu, 16 Apr 1998 13:37:31 -0700 From: Tim Fisher Subject: RE: [CANSLIM] Results of Earnings/Momentum Screen While splits and price have a perceived or "psychological" effect on a= stock's behavior (i.e. many people buy before or after splits, and buy cheaper= stocks because they can "afford" them), they have absolutely nothing to do with the fundamental things that drive stock prices up and down. So IMHO they should have nothing to do with the fundamental reasons why you would pick one stock over another. Concentrate on these reasons first, then use the other "psychological" indicators. I would never ever screen out a stock because it was over $20 in price! That would kill my performance! In my limited experience the best movers that I have held have been purchased for around $25-$100.=20 As for the logic of buying before (or after?) a split so that you double= your money and your shares, I'd like to know what this Wade guy is smoking. I use splits as a secondary or tertiary factor in deciding whether to buy a stock. If it's a strong Co, good CANSLIM characteristics, etc., I may buy one that has announced a split over one that hasn't, because of the psychological factors associated with splits. At 12:39 PM 4/16/98 , you wrote: >You know what Wade Cook says (I haven't bought his book): Buy a stock=20 >that's split 2/1. When it goes back to the pre-split price, you'll have=20 >doubled your money! Plus, if you bought just before the split, you'll have= =20 >twice as many shares! > >Mike > >On Thursday, April 16, 1998 11:41 AM, James Adams=20 >[SMTP:jimadams@may-uky.campus.mci.net] wrote: >> Replying to many who said a variety of things-- >> >> >> Also you write and Tim Fisher seems to agree "there is no reason for=20 >anyone >> to use lack of capital as a reason for buying lower priced stocks." In >> theory yes, however a $1.00 gain on a thousand shares of stock x which=20 >cost >> me $20 is more enriching than a $1.00 on 250 shares of stock y which cost >> $50. Since I don't invest in stock based 401K or IRA then my reason for >> investing as I do would be somewhat different than someone who is looking >> for long term stability of a such a portfolio(s). >> >> >> Thanks, >> James Adams......................Maysville, KY=A0 USA >> http://www.cris.com/~jimadams/ >> Internet Pager=A0 1343361@pager.mirabilis.com >> Tim Fisher / tfish@spiritone.com Ore-Rock-On and Pacific Fishery Biologists WWW Sites: http://www.spiritone.com/~tfish See naked fish and rocks! - - ------------------------------ Date: Thu, 16 Apr 1998 13:30:56 -0700 From: Tim Fisher Subject: Re: [CANSLIM] TMBS earnings At 12:36 PM 4/16/98 , you wrote: >At 2:30 Central I show the volume at 316,800 compared to yesterdays of 75,400. >That comes to 3xvolume. > >If this is incorrect please let me know. > >Thanks >Frank No, you cannot compare to yesterday's volume. You compare to Average Daily Volume, usually defined as average volume over the past X trading days. I believe Yahoo uses 30 days. Tim Fisher / tfish@spiritone.com Ore-Rock-On and Pacific Fishery Biologists WWW Sites: http://www.spiritone.com/~tfish See naked fish and rocks! - - ------------------------------ Date: Thu, 16 Apr 1998 16:42:01 -0400 From: Robert Bomba <73223.2767@compuserve.com> Subject: Re: [CANSLIM] Results of Earnings/Momentum Screen >> which someone mentioned may be because of lower volume rather than lower price - maybe ther is a coorelation between the two :-) << Not always. For a quick example look at ALCD. Higher price but low volume = large spread. Bid 49.00 ask 52.00 average vol. 16,409. How about POSO? Bid 5.375 ask 5.500 average vol. 111,227. Which would you buy? If you said POSO, I agree. I wish I did :-( The SP/MM need the volume to make their money or they make it up in higher spreads plain & simple IMHO of course. Bob - - ------------------------------ Date: Thu, 16 Apr 1998 16:50:28 -0400 From: Craig Griffin Subject: Re: [CANSLIM] Results of Earnings/Momentum Screen Mark, Thank you for the clarification. At 04:10 PM 4/16/98 -0400, you wrote: >after Tom's comments I went back a looked, I believe he noticed that on >HYSW, AFCI, MDLK and SIRN you divided by the ask instead of the bid >to get the percentage: A bit inconsistent - but same concept - here is Mark's correction - Old values: >>HYSW spread = bid 42 1/2, ask 43 = 1/2 spread = 1.2% spread (.5 / 43). >>AFCI spread = bid 40 15/16, ask 41 = 1/16 spread = 0.2% spread (.0625 / 41) >>MDLK spread = bid 21 1/4, ask 22 = 3/4 spread = 3.4% (.75 / 22) >>SIRN spread = bid 6 3/4, ask 6 15/16 = 3/16 spread = 2.7% (.1875 / 6.9375) New values: >HYSW (43 - 42.5) / 42.5 = 1.176% (or 1.2% rounded - same value after rounding) >AFCI (41 - 40.9375) / 40.9375 = .152% (or 0.2% rounded - again the same) >MDLK (22 - 21.25) / 21.25 = 3.52% (or 3.5% rounded) >SIRN (6.9375 - 6.75) / 6.75 = 2.77% (or 2.8% rounded) Thanks again, Mark. Best regards, Craig - - ------------------------------ Date: Thu, 16 Apr 1998 15:01:58 +0000 From: "Debby Howard" Subject: Re: [CANSLIM] MF sometimes inverted? I'm coming out of lurk mode with a question (intro later!) This is addressed to Connie Mack Rae in particular on the MF indicator, but to everyone, many thanks for your informative and helpful posts, this is a great list. Check out Aldila (ALDA) which is having a price breakout today. Pulling up a Bigcharts today's intraday chart with MF, at 10:00 there is a large price spike up towards $8 and continues up, and yet the moneyflow indicator spikes *down* and stays down for the rest of the day. Do you think this divergence has to do with the formula by which MF is calculated, or could it be a warning sign? This isn't the first time I've noticed MF going down when it looks like it should be going up. (I've mostly observed this on longer term charts, not intraday charts--but then I have much less experience with intraday charts.) Maybe in about 5% of the charts where it looks like money is flowing into the stock (i.e. price is going up and so is OBV), a rising OBV is tracked by an almost mirror-image dramatic trend to the negative in MF. When the indicator is off, it's off dramatically. This, and the fact that the trend is a mirror image, makes me think (1) there is an occasional problem in the formula; or (2) there is something "different" about the stock. Another example is PAMM, which did very well in 1997 but for most of the year showed negative moneyflow, which is just not true. There are others and I made a list. So when I see that, I just ignore the moneyflow indicator for that stock! If you like, I will dig out the other examples. But because of what I saw today with ALDA, I had to get on the list today and ask! This makes me wonder if the MF indicator can be off in other more subtle ways, or may account for the instances where you feel that an indicator is "lying." Have you noticed this with MF? I'm using a MF indicator very close to the one in Bigcharts. I use both actually. In QuotesPlus 1.1, the Chaikin Cumulative MoneyFlow formula tracks very closely if not exactly the MF in Bigcharts (and, this anomaly I'm talking about usually appears in both). Just yesterday, I was reading that when a stock is thinly-traded and has a huge bid-ask spread (PAMM is thinly traded and sometimes has a spread as large as 1.5!), this can throw off certain indicator formulas. Now, the Chaikin moneyflow formula uses the highs, lows, and close for the day. These prices may behave substantially differently for such a stock as PAMM because of the behavior of market makers, something which still eludes me . (Does this make sense?) I will now want to check on the other example stocks and see if they are like PAMM, or what else they might have in common. But, how would ALDA's spike up at 10:00 vs. negative MF be explained? Would love to hear any and all thoughts on this. Debby Howard - - ------------------------------ Date: Thu, 16 Apr 1998 20:08:51 -0400 From: "bamend" Subject: Re: [CANSLIM] NYSE New Highs Do you think the Dow 30 keeps going up could be due to the funds or futures that let you buy all three at one time? I've heard the S&P 500 might be getting caught in the same paradigm. - -----Original Message----- From: Tom Worley To: canslim@lists.xmission.com Date: Wednesday, April 15, 1998 5:17 AM Subject: Re: [CANSLIM] NYSE New Highs >Another example of why the Dow 30 shouldn't be used for issues that >matter, like circuit breakers (but then they are now designed as of >today to be unlikely to ever again be tripped, so guess it doesn't >matter after all). > >I prefer to use the Investors Daily 6000, S&P500 and NASDAQ Composite >for a good overall view of the market action. These three all show the >mkts consolidating for the past week, despite what the Dow 30 shows. >Worth noting that the RS line on NASDAQ has been flat compared to the >S&P500 since mid-Nov, and slightly below where it was prior to that. > >NYSE "new highs" doesn't need to hit a new record, in fact it's well >away from that, but it does appear to have begun to increase again. > >Tom W > >-----Original Message----- >From: Mike Lucero >To: 'canslim@lists.xmission.com' >Date: Wednesday, April 15, 1998 4:49 AM >Subject: [CANSLIM] NYSE New Highs > > >>Although the DOW hit a new high today, the NYSE composite didn't, and >the >>NYSE New Highs indicator didn't either, it's trend still seems down. >> >>Mike >> >>- >> > > >- - - ------------------------------ Date: Thu, 16 Apr 1998 20:19:55 -0400 From: "bamend" Subject: Re: [CANSLIM] Results of Earnings/Momentum Screen What program/service do you use for the screen? - -----Original Message----- From: James Adams To: Canslim Date: Thursday, April 16, 1998 10:12 AM Subject: [CANSLIM] Results of Earnings/Momentum Screen >I complied a screen which uses the most stringent CANSLIM criteria that I >could plug into the engine along with >1) Upgraded in previous month by major brokerage firms >2) Crossed 50 dma within last month >3) Relative Strength Increase in last month >4) Price <= $20.00 > >Results with latest IBD info: >Aeroflex Inc (ARX) 90/97/A Group C >Sirena Apparel (SIRN) 50/96/A Group A >Walsh International (WSHI) 64/90/A Group ?? > >In the scan I asked for 25% EPS QTR vs QTR, 25% projected for next YR and >avg >= 25% for next 5 years. Does the low EPS in IBD reflect a year long avg >and that is why the #s differ from my screen's good EPS #s? > >James Adams......................Maysville, KY USA >http://www.cris.com/~jimadams/ >Internet Pager 1343361@pager.mirabilis.com > > >- - - ------------------------------ Date: Thu, 16 Apr 1998 20:23:41 -0400 From: "Frank V. Wolynski" Subject: Re: [CANSLIM] Results of Earnings/Momentum Screen At 16:15 4/16/98 -0400, Craig Griffin wrote: ...sniped... > >About 8 years ago on Prodigy, I was reading a thread on CSCO where a guy >proved that it would have to continue to grow 35% a year for 10 years to >make it's valuation reasonable and he KNEW that was impossible - so he was >shorting it. Wonder how long that lasted. Pull up a 10 year chart on CSCO >sometime. Never a $10 stock. > >Well I got way of the subject. Sorry. > >Just remember - anything with any legs to it has to pass $12 sometime and >that's the time to catch it. Let the price be a first pass filter for you >- sure you will miss a few 30% runs - but you'll get your share in the >higher priced merchandise. Same 30% - you just own fewer shares for the >same dollar amount. But the odds of finding something worthwhile are >higher. > I was following IPO's in those days and tracking institutional accumulation. One of the shining stars in my database of IPO stocks was CSCO. I don't remember it ever being under $22/share. I do remember the earnings report that made me spew coffee across the room at my boss! Up 2200% over a prior quarter! CSCO jumped over $6 in one day. My boss said, "It's over, too late, too extended, wait for a retest, it'll come back, they always do!" By the way, the market was overvalued then too and "ripe for a fall". Well I guess..... Frank Wolynski ( Often wrong, plan accordingly.) - - ------------------------------ Date: Thu, 16 Apr 1998 21:34:33 -0400 From: "James Adams" Subject: Re: [CANSLIM] Results of Earnings/Momentum Screen From: bamend asked James Adams >What program/service do you use for the screen? I'm using the MS Investor subscription service, 30 day free trial. James Adams......................Maysville, KY USA http://www.cris.com/~jimadams/ Internet Pager 1343361@pager.mirabilis.com - - ------------------------------ End of canslim-digest V2 #191 ***************************** 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.