Re: [CANSLIM] Devil's Advocate: Why bother with fundamentals?

From: Spencer48@aol.com
Subject: Re: [CANSLIM] Devil's Advocate: Why bother with fundamentals?
Date: Wed, 19 Dec 2001 11:09:40 EST

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Katherine:

     The answer to your question is included in your question, viz. "...A 
typical CANSLIM/Intermediate term move..." is made up of CANSLIM 
stocks-otherwise it would not be a CANSLIM move.  CANSLIM stocks are composed 
of stocks with outstanding fundamentals AND outstanding technical chart 
patterns.

     My previous answer said that we have only so many resources to invest in 
the stocks that appear about to take off.  I imagine that relying only on 
technical indicators (with price/volume movements, ie. stock patterns) would 
have 1) given as many false signals as CANSLIM and 2) done as badly as using 
the CANSLIM techniques (with its dependence on outstanding fundamentals).

     However, it would be interesting to see some empirical evidence on this: 
 Do you believe reliance on merely technical indicators and chart patterns 
would have done better than CANSLIM?  Or would you believe that it is the 
market rather than the CANSLIM technique that allows for so many failure (and 
some unexpected successes, whether using CANSLIM or not)?

jans

     

In a message dated 12/18/2001 8:32:53 PM Eastern Standard Time, 
kmalm@earthlink.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. >>

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