Re: [CANSLIM] Rick-Canslim no workee?

From: musicant@autobahn.org (Dan Musicant)
Subject: Re: [CANSLIM] Rick-Canslim no workee?
Date: Sun, 06 Apr 1997 17:15:47 GMT

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On Sat, 5 Apr 1997 14:09:18 -0600, you wrote:

:No, canslim does not lend itself to contests, I agree.  But you invest =
to
:make money, don't you? =20
Yes.
:All I am saying is that there might be, just might
:be other methods that work better than canslim.=20
Granted. I'm sure there are. We are trying to do the impossible --
there *is* no way to accurately predict the action of the markets. We
are only trying to get a let up on it, one way or another. It has been
noted that no two practitioners of CANSLIM do it the same way, BTW.

:(Sorry for the blasphemy canslimmers) =20
I don't follow the methods religiously. Indeed, O'Neil himself (if you
read him carefully) indicates that he doesn't either.

:What other way than to test one method against another to
:find out which one works best time after time? =20
Well, you see, that's easier said than done. To adequately implement
the principles of CANSLIM, you have to understand it. It's not just
something you implement after a 20 minute review of criteria, though
your method may be.=20

:If you have a problem with
:timing, you tell me when you want to pick your 5 stocks and I'll be =
ready
:on the same day to select ones using my methods. =20
This too violates the principles of CANSLIM. There is no day when it
suddenly becomes the right time to establish 5 positions.

:Since O'Neil recommends
:holding on to a stock for at least 8 weeks unless the stop-loss is =
reached,
This is not an accurate assessment. He would only recommend possibly
holding on for 8 weeks if a stock continued to meet CANSLIM criteria.
I believe there is a complex of factors to consider in determining how
long to hold on. The "M" in CANSLIM is always 60% of the picture, and
in today's market,"8 week" pictures are like wearing glasses you
picked up on the street...not a good idea.

:we can at least compare the performance for that period of time without =
too
:many hassles I presume.
Like I said, you are presuming an awful lot there.

:If you need to sell, OK, I'll sell one of mine too
:and when you buy, I'll buy another one.  I'll even keep track of the =
stocks
:and report on them weekly so you won't have to do any work. =20
:Dan, all I'm trying to do is find what is true and what is hype. =20
That's fine. You are not the first person who wondered if there wasn't
some "hype" in CANSLIM, me included. It is fundamental that you have
to make up your own mind.=20

:I have not come down one way or the other as far as canslim is =
concerned.  In
:fact, I'm open to adhering to it faithfully forever if it indeed works.
There are people who have become millionaires using CANSLIM methods.
=20
:Now, either it works (pure canslim) most of the time and works better =
than
:any other method most of the time or it doesn't! Finding this out does =
not
:take a rocket scientist. =20
Well, once again, it is not that simple. You don't just apply 6 handy
dandy rules and start dialing your broker.

:One can and should test and compare any method
:that presumably works to ensure maximum profits.  To be so inflexible as=
 to
:not even consider that one's method may be flawed is simply, well, =
stupid.
Like a friend of mine once said, "Don't be afraid to make a mistake.
Everything you do may be a mistake." Anything you do may be flawed,
and probably is. So what?
=20
:Dan, if I told you that I have been doing a study on volume using IBD =
and
:told you that I had a contest with myself using this method of selecting
:against the canslim method and for a few years now canslim was getting
:beat, wouldn't you be interested in knowing how I performed the test?  =
Or
:would you simply ignore the "contest"?

Not everything lends itself to contests. O'Neil's book indicates that
some of his proteges won important contests using his methods in
recent years. Those contests were in a bull market over a period of a
year. David Ryan is one of those people.
:
:Respectfully,
:
:Rick

I think that one of your main points, Rick, is that people have to
come to their own conclusions and not subjugate themselves to a method
or mindless rules. Those who make the most significant contributions
to this newsletter (and the world in general) would be the first to
agree with you.=20

Dan
:----------
:> From: Dan Musicant <musicant@autobahn.org>
:> To: canslim@mail.xmission.com
:> Subject: Re: [CANSLIM] Rick-Canslim no workee?
:> Date: Saturday, April 05, 1997 1:02 PM
:>=20
:> CANSLIM is a method of stock investment. It does not lend itself to
:> contests such a Rick suggests. I am far from an expert, but from what
:> I have read it seems to me that this contest (such as it is proposed)
:> violates the spirit and substance of O'Neil's methods. One does not
:> use CANSLIM to select 10 stocks and see how they compare to an index
:> over a given period. Rick is showing a lack of understanding of what
:> CANSLIM is by virtue of his proposal.=20
:>=20
:> Firstly, CANSLIM specifies the utmost care in determining the entry
:> point for a position. Timing is negated in the proposal.
:>=20
:> Secondly, CANSLIM is also at least equally predicated on proper timing
:> for selling a stock.
:>=20
:> Back to square one.
:>=20
:> Dan

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