Re: [CANSLIM] Point of View: Why bother with fundamentals?

From: Spencer48@aol.com
Subject: Re: [CANSLIM] Point of View: Why bother with fundamentals?
Date: Sun, 16 Dec 2001 16:28:43 EST

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Katherine:

     Interesting question.  I've asked myself that also.  Here's my answer:  

     We've only a limited amount of resources; stock picking (not to mention 
all econcomics) is the allocation of scarce resources.  One wants to 
apportion one's money so that probabilities are with the stocks you choose.  
So, one chooses the stocks with the greatest earnings in each quarter, and 
those with a high SMR (because you want companies that have good margins, 
sales, and ROE percent.  Out of that constellation, you pick your rising star 
based on technical analysis and charts.

     I partially agree with your last sentence: In the short term returns are 
based on price movements-but the price movements are most likely based on 
good fundamentals.  Not only that, technical indicators and price/volume 
action are reflections of what has happened in the market, not necessarily 
what will happen.  However, tech indications and price/volume will more 
LIKELY predict what will happen if fundamentals are high (ie. Canslimish).

jans


In a message dated 12/16/2001 4:15:29 PM Eastern Standard Time, 
genr@swbell.net writes:

<<  If a typical CANSLIM/Intermediate term move in a stock lasts only a few 
weeks, and in good markets, only a few months, why bother selecting portfolio 
candidates using any sort of fundamental analysis? Returns in this time 
period are strictly based on price movement and can be maximized based on 
technical indicators and price/volume action alone.
 
   Thoughts pro/con?
 
   Katherine
  >>

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