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

From: "Patrick Wahl" <pjwahl@attbi.com>
Subject: Re: [CANSLIM] Point of View: Why bother with fundamentals?
Date: Sun, 16 Dec 2001 19:09:36 -0700

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If you are talking about ignoring even such fundamental fundamentals as earnings 
and sales growth, then I think the answer is that using such additional information 
can give you an idea of how far a breakout my go.  A breakout of a stock growing at 
15% probably will not go as far as one on a stock growing at 55%. I think Ian 
Woodward has a term called "gas in the tank", which is based on valuation, which 
needs some fundamental input to figure.

A deep understanding of fundamentals, in the form of knowing all about an industry, 
knowing the various competitors, knowing what the potential growth is for an 
industry and for the leading company in that industry can let you hang in for longer 
than the few months you mention.  If you could have doped out the PC market in 
1990 say, you might have gotten into Intel, Microsoft, Dell, and held for a while.  I 
have learned I can't do this to a great enough degree of certainty to hold companies 
though market or sector downturns, so I don't try anymore, but if you can figure this 
stuff out, this is where the big gains can come from.  

On 16 Dec 2001 at 10:12, Katherine Malm wrote:

> Proposed:
> 
> 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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