Go to Jeff Salisbury LWGate Home Page.From: "John Adair" <xjadair@brightok.net>
Subject: RE: [CANSLIM] Point of View: Why bother with fundamentals?
Date: Tue, 18 Dec 2001 19:35:37 -0600
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Hi Katherine
I read with interest your procedure The last paragraph seems indicate yo=
u
do use fundamentals and sector rotation for your screening. Then you use
total technical analysis from that point including exits. Correct?
If that=92s correct then would you begin to identify some of the patterns=
in
the stocks you evaluate. I have purchased Bulkowski and trying to make se=
nse
out of it. The patterns never seem to match his diagrams.
John A
- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Katherine Malm
Sent: Monday, December 17, 2001 9:53 PM
To: canslim@lists.xmission.com
Subject: Re: [CANSLIM] Point of View: Why bother with fundamentals?
- ----- Original Message -----
From: Katherine Malm <mailto:kmalm@earthlink.net>
To: canslim@lists.xmission.com <mailto:canslim@lists.xmission.com>
Sent: Sunday, December 16, 2001 10:12 AM
Subject: [CANSLIM] Point of View: Why bother with fundamentals?
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 t=
his
time period are strictly based on price movement and can be maximized bas=
ed
on technical indicators and price/volume action alone.
Thoughts pro/con?
Hi all,
I was going to let this question go on for the rest of the week without
posting a response myself, but I figure if I don't do it tonight, it'll e=
nd
up as an "Ask Bill" on Investors.com or an "Investor's Corner" in
Wednesday's IBD and spoil all the fun.
Before I give you my own response, I thought I'd give some background on =
the
question. I view this as a "Zen question." The value is in the asking, no=
t
in the answer. And as many of you have each responded differently, you ca=
n
see that there is no "right answer" to this. There is only an answer that=
is
"right for you." An exceptionally bright friend of mine that I have known
for 30 years sent me an email this evening expressing disbelief that *I*
would ask such a question. He was also kind enough to answer it. Another
friend of mine who practices CANSLIM and is not a member of the list
expressed the same disbelief. The truth is, I have struggled with this
question again and again during the many years that I have practiced this
chosen investing style. I have especially struggled with it the last year=
as
I have flipped stocks over and over again. Why the heck would I go to so
much trouble doing fundamental research and choosing the "best" stocks in
rising industries only to sell them in a few weeks? Why go to all that
trouble when I see lousy stocks bounce off the bottom in September? How i=
s
it that a short term trader can make profits by flipping stocks day after
day based only on supply and demand? How is it that people who knew nothi=
ng
about economics, markets, market history, fundamentals, technicals, finan=
ce,
balance sheets, income statements, return on equity, or cash flow could b=
uy
a stock in late 1999 and make 500% in a minute and a half? Okay, maybe 7
minutes. I'm sorry, but that bugs me.
This question is about an important underlying assumption of CANSLIM: Buy=
a
stock with excellent fundamentals in a rising industry when it breaks out=
of
a solid basing formation on at least 150% of average daily volume. Yet, W=
ON
has never given us a scientific study to show that this is "statistically
significant" or that investing based on this style in uptrending markets =
has
outperformed other styles including those based on pure fundamentals or p=
ure
technicals. He has only given us anecdotal evidence. He shows us example
after example of "winning stocks." He has developed a database used by
institutions and individuals alike so that they can invest more easily ba=
sed
on these assumptions. We have no evidence that his research was complete =
or
that it was sound. But we do know that it has been successful for him. We
can see that his examples are real. We know from our own experience and f=
rom
that shared by our friends that "it works." In some ways, it's choosing a
style "on faith."
Here's my analogy for CANSLIM:
I had a beautiful silver bracelet. I paid $10 for it just as the style wa=
s
beginning to become popular. My goal was to sell it and make a profit. As
long as it was sitting in my closet, however, it was just a bracelet. Whe=
n I
thought is was becoming even more popular, I put it out at a garage sale =
and
marked it $20, nobody bought it. I marked it down to $15. Still nobody
bought it, and in fact only one person during the entire two days even ga=
ve
it a second glance. It's still a bracelet and there's no money in my pock=
et.
I put it up for sale on EBAY and suddenly many people who like silver
bracelets were looking at it. It sold for $100 because enough interested
buyers were bidding for it at the same time. Was it "worth" $100? Not
intrinsically. But it was "worth" what someone was willing to pay for it =
at
the time. I met my goal: I made money. Shortly after this, I noticed many
similar bracelets on EBAY selling for $25.
The point is, a company can have the potential to be a great company, but=
if
there is no demand for the stock, the price will not go up. Or, sometimes=
,
the price of a stock of a seeming worthless company will go up. Until it
doesn't. Every once in a while you will watch a very good company become =
a
great company and the stock will go up, and up, and up, and up. Until it
doesn't. All you need to know is market history to know that this is true.
You don't need exhaustive statistical studies. You can find example after
example. But can you find a good company that is underowned or undiscover=
ed
and has the potential to become a great company? Can you determine when
demand is beginning to overwhelm supply so that you can buy it at a good
price? Can you tell if there is continued demand for it that drives up th=
e
price? Can you determine when is becoming overowned and sell it for as mu=
ch
as possible? Can you make money on it? I believe you can. Fundamentals te=
ll
the story of a good company. Due diligence tells the story of potential.
Technicals tell the story of supply and demand. CANSLIM has all of these =
in
its toolbag. How you chose to use them is your choice.
Here is my answer to this question. As you can see, it is different than
everyone else's.
Narrowing down the universe of candidates based on excellent fundamentals
and company/industry potential allows me to ride price movement with a
bonus. If the market is healthy and this stock is not yet "discovered" an=
d
the company fulfills its potential, I may be able to ride it much longer
than the intermediate term. This stock could easily become the next DELL,
MSFT, INTC, CSCO, or HD. Fundamentals, well considered, put the odds for
selecting a "big winner" in my favor.
Thank you Kent, Gene, Perry, esetser, Norman, jans, Warren, Dan, Tom,
Patrick, Larry, Andreas, Dennis, TA and others who have answered but whos=
e
response I did not see.
Happy Holidays and a Prosperous New Year to all,
Katherine
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<body bgcolor=3Dwhite lang=3DEN-US link=3Dblue vlink=3Dblue =
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<p class=3DMsoNormal><span class=3DEmailStyle18><font size=3D2 =
color=3Dnavy face=3DArial><span
style=3D'font-size:10.0pt;mso-bidi-font-size:12.0pt;font-family:Arial'><s=
pan
style=3D"mso-spacerun: yes"> </span>Hi =
Katherine<o:p></o:p></span></font></span></p>
<p class=3DMsoNormal><span class=3DEmailStyle18><font size=3D2 =
color=3Dnavy face=3DArial><span
style=3D'font-size:10.0pt;mso-bidi-font-size:12.0pt;font-family:Arial'>I =
read
with interest your procedure The last paragraph seems <span
style=3D"mso-spacerun: yes"> </span>indicate you do use =
fundamentals and
sector rotation for your screening. Then you<span style=3D"mso-spacerun:
yes"> </span>use total technical analysis from that point =
including
exits. Correct?<o:p></o:p></span></font></span></p>
<p class=3DMsoNormal><span class=3DEmailStyle18><font size=3D2 =
color=3Dnavy face=3DArial><span
style=3D'font-size:10.0pt;mso-bidi-font-size:12.0pt;font-family:Arial'>If=
that’s correct
then would you begin to identify some of the patterns in the stocks you
evaluate. I have purchased Bulkowski and trying to make sense out of it. =
The
patterns never seem to match his =
diagrams.<o:p></o:p></span></font></span></p>
<p class=3DMsoNormal><span class=3DEmailStyle18><font size=3D2 =
color=3Dnavy face=3DArial><span
style=3D'font-size:10.0pt;mso-bidi-font-size:12.0pt;font-family:Arial'>Jo=
hn A<o:p></o:p></span></font></span></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dblack
face=3DTahoma><span =
style=3D'font-size:10.0pt;font-family:Tahoma;color:black'>-----Original
Message-----<br>
<b><span style=3D'font-weight:bold'>From:</span></b>
owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com]<b><span
style=3D'font-weight:bold'>On Behalf Of </span></b>Katherine Malm<br>
<b><span style=3D'font-weight:bold'>Sent:</span></b> Monday, December =
17, 2001
9:53 PM<br>
<b><span style=3D'font-weight:bold'>To:</span></b> =
canslim@lists.xmission.com<br>
<b><span style=3D'font-weight:bold'>Subject:</span></b> Re: [CANSLIM] =
Point of
View: Why bother with fundamentals?</span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'><![if =
!supportEmptyParas]> <![endif]><o:p></o:p></span></font></p>
<div style=3D'border:none;border-left:solid black 1.5pt;padding:0in 0in =
0in 4.0pt'>
<p class=3DMsoNormal =
style=3D'mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
margin-left:39.75pt;border:none;mso-border-left-alt:solid black 1.5pt;
padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><font size=3D2 =
color=3Dblack
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:black'>-----
Original Message ----- </span></font><font size=3D2 color=3Dblack =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;color:black;mso-color-alt:win=
dowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal =
style=3D'mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
margin-left:39.75pt;background:#E4E4E4;border:none;mso-border-left-alt:so=
lid black 1.5pt;
padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><b><font size=3D2 =
color=3Dblack
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:black;
font-weight:bold'>
<div style=3D'font-color:black'>From:</span></font></b><font size=3D2 =
color=3Dblack
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:black'> <a
href=3D"mailto:kmalm@earthlink.net" =
title=3D"kmalm@earthlink.net">Katherine Malm</a>
</span></font></div>
<font size=3D2 color=3Dblack face=3DArial><span =
style=3D'font-size:10.0pt;font-family:
Arial;color:black;mso-color-alt:windowtext'><o:p></o:p></span></font></p>=
<p class=3DMsoNormal =
style=3D'mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
margin-left:39.75pt;border:none;mso-border-left-alt:solid black 1.5pt;
padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><b><font size=3D2 =
color=3Dblack
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:black;
font-weight:bold'>To:</span></font></b><font size=3D2 color=3Dblack =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;color:black'> <a
href=3D"mailto:canslim@lists.xmission.com" =
title=3D"canslim@lists.xmission.com">canslim@lists.xmission.com</a>
</span></font><font size=3D2 color=3Dblack face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial;color:black;mso-color-alt:windowtext'><o:p></o:p></span=
></font></p>
<p class=3DMsoNormal =
style=3D'mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
margin-left:39.75pt;border:none;mso-border-left-alt:solid black 1.5pt;
padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><b><font size=3D2 =
color=3Dblack
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:black;
font-weight:bold'>Sent:</span></font></b><font size=3D2 color=3Dblack =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;color:black'> Sunday, =
December 16,
2001 10:12 AM</span></font><font size=3D2 color=3Dblack =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;color:black;mso-color-alt:win=
dowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal =
style=3D'mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
margin-left:39.75pt;border:none;mso-border-left-alt:solid black 1.5pt;
padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><b><font size=3D2 =
color=3Dblack
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:black;
font-weight:bold'>Subject:</span></font></b><font size=3D2 color=3Dblack
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:black'>
[CANSLIM] Point of View: Why bother with =
fundamentals?</span></font><font
size=3D2 color=3Dblack face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;
color:black;mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal =
style=3D'mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
margin-left:39.75pt;border:none;mso-border-left-alt:solid black 1.5pt;
padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><font size=3D2 =
color=3Dblack
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:black'><![if =
!supportEmptyParas]> <![endif]></span></font><font
size=3D2 color=3Dblack face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;
color:black;mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal =
style=3D'mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
margin-left:39.75pt;border:none;mso-border-left-alt:solid black 1.5pt;
padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><font size=3D2 =
color=3Dblack
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:black'>Proposed:</span>=
</font><font
size=3D2 color=3Dblack face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;
color:black;mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal =
style=3D'mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
margin-left:39.75pt;border:none;mso-border-left-alt:solid black 1.5pt;
padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><font size=3D2 =
color=3Dblack
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:black'> </span></f=
ont><font
size=3D2 color=3Dblack face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;
color:black;mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal =
style=3D'mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
margin-left:39.75pt;border:none;mso-border-left-alt:solid black 1.5pt;
padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><font size=3D2 =
color=3Dblack
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:black'>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.</span></font><font size=3D2
color=3Dblack face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;
color:black;mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal =
style=3D'mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
margin-left:39.75pt;border:none;mso-border-left-alt:solid black 1.5pt;
padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><font size=3D2 =
color=3Dblack
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:black'> </span></f=
ont><font
size=3D2 color=3Dblack face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;
color:black;mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal =
style=3D'mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
margin-left:39.75pt;border:none;mso-border-left-alt:solid black 1.5pt;
padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><font size=3D2 =
color=3Dblack
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:black'>Thoughts
pro/con?</span></font><font size=3D2 color=3Dblack face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;color:black;mso-color-alt:win=
dowtext'><o:p></o:p></span></font></p>
</div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
color=3Dblack
face=3D"Times New Roman"><span =
style=3D'font-size:12.0pt;color:black'> </span></font><font
color=3Dblack><span =
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></font><=
/p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dblack
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:black'>Hi =
all,</span></font><font
color=3Dblack><span =
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></font><=
/p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
color=3Dblack
face=3D"Times New Roman"><span =
style=3D'font-size:12.0pt;color:black'> </span></font><font
color=3Dblack><span =
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></font><=
/p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dblack
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:black'>I was
going to let this question go on for the rest of the week without =
posting a
response myself, but I figure if I don't do it tonight, it'll end up as =
an
"Ask Bill" on Investors.com or an "Investor's
Corner" in Wednesday's IBD and spoil all the =
fun.</span></font><font
color=3Dblack><span =
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></font><=
/p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
color=3Dblack
face=3D"Times New Roman"><span =
style=3D'font-size:12.0pt;color:black'> </span></font><font
color=3Dblack><span =
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></font><=
/p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dblack
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:black'>Before
I give you my own response, I thought I'd give some background on the =
question.
I view this as a "Zen question." The value is in the asking, =
not in
the answer. And as many of you have each responded differently, you can =
see
that there is no "right answer" to this. There is only an =
answer that
is "right for you." An exceptionally bright friend of mine =
that I
have known for 30 years sent me an email this evening expressing =
disbelief that
*I* would ask such a question. He was also kind enough to answer it. =
Another
friend of mine who practices CANSLIM and is not a member of the list =
expressed
the same disbelief. The truth is, I have struggled with this question =
again and
again during the many years that I have practiced this chosen investing =
style.
I have especially struggled with it the last year as I have flipped =
stocks over
and over again. Why the heck would I go to so much trouble doing =
fundamental
research and choosing the "best" stocks in rising industries =
only to
sell them in a few weeks? Why go to all that trouble when I see lousy =
stocks
bounce off the bottom in September? How is it that a short =
term
trader can make profits by flipping stocks day after day based only =
on
supply and demand? How is it that people who knew nothing about =
economics,
markets, market history, fundamentals, technicals, finance, balance =
sheets,
income statements, return on equity, or cash flow could buy a stock in =
late
1999 and make 500% in a minute and a half? Okay, maybe 7 minutes. I'm =
sorry,
but that bugs me.</span></font><font color=3Dblack><span =
style=3D'color:black;
mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
color=3Dblack
face=3D"Times New Roman"><span =
style=3D'font-size:12.0pt;color:black'> </span></font><font
color=3Dblack><span =
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></font><=
/p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dblack
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:black'>This
question is about an important underlying assumption of CANSLIM: Buy a =
stock
with excellent fundamentals in a rising industry when it breaks out of a =
solid
basing formation on at least 150% of average daily volume. Yet, WON has =
never
given us a scientific study to show that this is "statistically
significant" or that investing based on this style in uptrending =
markets
has outperformed other styles including those based on pure fundamentals =
or
pure technicals. He has only given us anecdotal evidence. He shows us =
example
after example of "winning stocks." He has developed a database =
used
by institutions and individuals alike so that they can invest more =
easily based
on these assumptions. We have no evidence that his research was complete =
or
that it was sound. But we do know that it has been successful for him. =
We can
see that his examples are real. We know from our own experience and from =
that
shared by our friends that "it works." In some ways, it's =
choosing a
style "on faith."</span></font><font color=3Dblack><span
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></font><=
/p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
color=3Dblack
face=3D"Times New Roman"><span =
style=3D'font-size:12.0pt;color:black'> </span></font><font
color=3Dblack><span =
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></font><=
/p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dblack
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:black'>Here's
my analogy for CANSLIM: </span></font><font color=3Dblack><span =
style=3D'color:
black;mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dblack
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:black'>I had a
beautiful silver bracelet. I paid $10 for it just as the style was =
beginning to
become popular. My goal was to sell it and make a profit. As =
long as
it was sitting in my closet, however, it was just a bracelet. When =
I
thought is was becoming even more popular, I put it out at a garage sale =
and
marked it $20, nobody bought it. I marked it down to $15. Still nobody =
bought
it, and in fact only one person during the entire two days =
even gave
it a second glance. It's still a bracelet and there's no money in my =
pocket. I
put it up for sale on EBAY and suddenly many people who like silver =
bracelets
were looking at it. It sold for $100 because enough interested buyers =
were
bidding for it at the same time. Was it "worth" $100? Not
intrinsically. But it was "worth" what someone was willing to =
pay for
it at the time. I met my goal: I made money. Shortly after this, I =
noticed many
similar bracelets on EBAY selling for $25</span></font><font =
color=3Dblack><span
style=3D'color:black'>.</span></font><font color=3Dblack><span =
style=3D'color:black;
mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
color=3Dblack
face=3D"Times New Roman"><span =
style=3D'font-size:12.0pt;color:black'> </span></font><font
color=3Dblack><span =
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></font><=
/p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dblack
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:black'>The
point is, a company can have the potential to be a great company, but if =
there
is no demand for the stock, the price will not go up. Or, sometimes, the =
price
of a stock of a seeming worthless company will go up. Until it doesn't. =
Every
once in a while you will watch a very good company become a great =
company and
the stock will go up, and up, and up, and up. Until it doesn't. All you =
need to
know is market history to know that this is true. You don't need =
exhaustive
statistical studies. You can find example after example. But can you =
find a
good company that is underowned or undiscovered and has the =
potential
to become a great company? Can you determine when demand is beginning to
overwhelm supply so that you can buy it at a good price? Can you tell if =
there
is continued demand for it that drives up the price? Can you determine =
when is
becoming overowned and sell it for as much as possible? Can you make =
money on
it? I believe you can. Fundamentals tell the story of a good company. =
Due
diligence tells the story of potential. Technicals tell the story of =
supply and
demand. CANSLIM has <em><i>all</i></em> of these in its toolbag. How you =
chose
to use them is your choice.</span></font><font color=3Dblack><span
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></font><=
/p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
color=3Dblack
face=3D"Times New Roman"><span =
style=3D'font-size:12.0pt;color:black'> </span></font><font
color=3Dblack><span =
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></font><=
/p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dblack
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:black'>Here is
my answer to this question. As you can see, it is different than =
everyone
else's.</span></font><font color=3Dblack><span =
style=3D'color:black;mso-color-alt:
windowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
color=3Dblack
face=3D"Times New Roman"><span =
style=3D'font-size:12.0pt;color:black'> </span></font><font
color=3Dblack><span =
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></font><=
/p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dblack
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:black'>Narrowing
down the universe of candidates based on excellent fundamentals and
company/industry potential allows me to ride price movement with a =
bonus. If
the market is healthy and this stock is not yet "discovered" =
and the
company fulfills its potential, I may be able to ride it much longer =
than the
intermediate term. This stock could easily become the next DELL, MSFT, =
INTC,
CSCO, or HD. Fundamentals, well considered, put the odds for =
selecting a
"big winner" in my favor.</span></font><font size=3D2 =
color=3Dblack
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:black;
mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
color=3Dblack
face=3D"Times New Roman"><span =
style=3D'font-size:12.0pt;color:black'> </span></font><font
color=3Dblack><span =
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></font><=
/p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
color=3Dblack
face=3D"Times New Roman"><span =
style=3D'font-size:12.0pt;color:black'> </span></font><font
color=3Dblack><span =
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></font><=
/p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dblack
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:black'>Thank
you Kent, Gene, Perry, esetser, Norman, jans, Warren, Dan, Tom, Patrick, =
Larry,
Andreas, Dennis, TA and others who have answered but whose response I =
did not
see.</span></font><font color=3Dblack><span =
style=3D'color:black;mso-color-alt:
windowtext'><o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
color=3Dblack
face=3D"Times New Roman"><span =
style=3D'font-size:12.0pt;color:black'> </span></font><font
color=3Dblack><span =
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></font><=
/p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dblack
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:black'>Happy
Holidays and a Prosperous New Year to all,</span></font><font =
color=3Dblack><span
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></font><=
/p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dblack
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:black'>Katherine</span>=
</font><font
color=3Dblack><span =
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></font><=
/p>
<div style=3D'border:none;border-left:solid black 1.5pt;padding:0in 0in =
0in 4.0pt'>
<p class=3DMsoNormal =
style=3D'mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
margin-left:43.5pt;border:none;mso-border-left-alt:solid black 1.5pt;
padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><font size=3D3 =
color=3Dblack
face=3D"Times New Roman"><span =
style=3D'font-size:12.0pt;color:black'> </span></font><font
color=3Dblack><span =
style=3D'color:black;mso-color-alt:windowtext'><o:p></o:p></span></font><=
/p>
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</div>
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