Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: [CANSLIM] Worley's Weekend Weeview
Date: Sat, 22 Dec 2001 12:02:59 -0600
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This is a multi-part message in MIME format. - ------=_NextPart_000_0054_01C18AE0.997D07E0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Hello Tom, At last, I am compelled to comment on your excellent WWW...=20 The normal figure bandied about on spending related to new home = purchases is 6 to 1. If I spend $100K on a new home, these dollars will = recirculate 6 times into the economy. (Wonder how many times your = pentium purchase recirculates?!) So, seeing a marked downturn in the = home figures would really worry the economists. Greenspan, in = particular, focuses on this and was quite worried when long term rates = remained sticky, despite the lowering of short term rates. I still see = the strength in recent home sales reflecting the "hurry up and get it = done before the rates go up again syndrome." In Austin, for example, the = homebuilders have been in aggressive selling mode for quite some time. = Every day, the deal is sweetened. $10,000 in extras! First two years = financing at 4%! Cash at close to cover your moving expenses! Free maid = for life! (Well, I made that one up.) Bigger homebuilders make most of = their money not on the home, but on the financing. If they are having to = lower mortgage rates to lure the customer, their margins are going to be = squeezed going forward. That means in the coming year, the homebuilders = will have more difficult Q over Q or Y over Y comparisons. Also, my own = family owns a construction business, so I have seen these cycles first = hand. You are right that the consumer seems willing to take on the = additional debt and I think that, along with other economic indicators, = says that the economy is far from plunging into the depths. But these = things don't necessarily translate into good equity investments. Happy Holidays, Katherine ----- Original Message -----=20 From: Tom Worley=20 To: CANSLIM=20 Sent: Saturday, December 22, 2001 10:49 AM Subject: [CANSLIM] Worley's Weekend Weeview HOUSING STARTS, PERMITS Both up sharply for November, ahead of expectations. Starts were up = 8.2%, permits 5.3%. In terms of fueling consumer spending, the purchase = of a new home is one of the greatest factors, so strength here = translates into increases sales of everything from building materials to = furniture, appliances, carpet, curtains, etc. It also shows a = willingness to commit to long term debt even in the face of high = unemployment.=20 - -------------------------------------------------------------------------= - ----- ON ECONOMICS Lately this topic seems to be one of contradictions more than = consistency. The final GDP figure for the Third Quarter finishes up at a = decline of 1.3% (worst in ten years), down more than expected even after = the interim revision. This is a big number to overcome, and in my mind = makes it virtually certain that the Fourth Quarter will report a = negative number, confirming recession even by traditional standards. At = the same time, the 11 aggressive Fed rate cuts this year seem only to = have kept the economy from total collapse, rather than beginning a = recovery. Yet there are signs of recovery, or at least bottoming, in = many indicators. Does this mean we still need a Congressional mandated = "economic stimulus" package, or will this just end up being more pork = barrel wastage of taxpayers money? (personally I think the latter, I = don't trust Congress with my money). Auto sales in October, with zero = percent loans, have already proven to have cannibalized November sales, = and likely well into next year. Yet other big purchases, such as homes, = remain surprisingly strong. I do note here that historically people get = greedy when mortgage rates are falling, and tend to wait to commit until = they see rates turning up as they have, then rush to lock in the sales = contract or loan. But then there is the Michigan Consumer Sentiment = index, gaining ground to 88.8 from the preliminary 85.8, and up strongly = from the 83.9 for the end of November. And it did that even as = November's consumer spending dropped 0.7% (slightly better than expected = and reflecting the drop in car sales) and personal income fell 0.1%, = considerably worse than expectations of a 0.2% gain. And layoffs = continue, and unemployment is high and expected to go even higher (to 6% = or even 6.5%, fortunately it's a lagging indicator of the economy). = October personal income was also revised lower by 0.1%. Still, the = "experts" are predicting economic recovery by the middle of 2002, and = even indicating positive growth during the first half.=20 - -------------------------------------------------------------------------= - ----- WORLEY'S WATCHLIST WANNABES As usual, Bx means a flat line "B"ase of "x" weeks duration, IMO. I = will mention if I see other basing formations such as a c&h, double = bottom, LLUR, etc. Remember that I am only looking at the past six = months of the chart, and not doing any other due diligence than to = ensure (unless otherwise mentioned) that the stocks mentioned have both = an RS and an EPS of 80 or better, and are close (within 10%) of their 12 = month high. AAON - nice cup&handle, handle now 4 weeks long, drooped down, now = drifting up on light end of year volume ACS - LLUR ASFI - B2, RS under 80, in my VR fund AGM - B5 AGY - price weakness on volume may be altering the newly started LLUR = pattern ALLY - same comment, same group, but the high volume is not there AMMD - began to b/o from a saucer on volume Friday BVF - LLUR CAKE - B2+ CECO - B2+ CPO - nice b/o Friday to the pivot on nearly 3X ADV, earnings forecast = for new year +31% CVBF - breaking the pivot on a B9 on Friday with heavy volume DFXI - B3 on a weak double bottom? DLX - LLUR despite weak earnings FRED - LLUR, high PE trailing, but earnings forecast at +22% IDPH - B6, strong earnings forecast ISLE - B3, strong earnings forecast, in my VR Fund JNC - LLUR LOW - B3 MHO - B2+, earnings forecast to decline next year, home builder MIMS - really ragged LLUR but with powerful earnings forecast, low = priced ($15) NDN - B3 NFI - CAT LLUR NMTC - B2+ PBY - B2+ PETM - RAT LLUR POSS - LLUR RYAAY - B6 RYAN - LLUR, earnings weak SASR - up 50% in six months on a steady, consistent LLUR, but b/o = Friday on volume violates the pattern STJ - B4 Happy Hunting, God bless America, and its military people Merry Christmas to all, have a safe and happy celebration, Tom Worley stkguru@netside.net AIM: TexWorley - ------=_NextPart_000_0054_01C18AE0.997D07E0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable <!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> <HTML><HEAD> <META http-equiv=3DContent-Type content=3D"text/html; = charset=3Diso-8859-1"> <META content=3D"MSHTML 5.50.4611.1300" name=3DGENERATOR> <STYLE></STYLE> </HEAD> <BODY bgColor=3D#ffffff> <DIV>Hello Tom,</DIV> <DIV> </DIV> <DIV>At last, I am compelled to comment on your excellent WWW... </DIV> <DIV> </DIV> <DIV>The normal figure bandied about on spending related to new home = purchases=20 is 6 to 1. If I spend $100K on a new home, these dollars will = recirculate 6=20 times into the economy. (Wonder how many times your pentium purchase=20 recirculates?!) So, seeing a marked downturn in the home figures would = really=20 worry the economists. Greenspan, in particular, focuses on this and was = quite=20 worried when long term rates remained sticky, despite the lowering of = short term=20 rates. I still see the strength in recent home sales reflecting the = "hurry up=20 and get it done before the rates go up again syndrome." In Austin, for = example,=20 the homebuilders have been in aggressive selling mode for quite some = time. Every=20 day, the deal is sweetened. $10,000 in extras! First two years financing = at 4%!=20 Cash at close to cover your moving expenses! Free maid for life! (Well, = I made=20 that one up.) Bigger homebuilders make most of their money not on the = home, but=20 on the financing. If they are having to lower mortgage rates to lure the = customer, their margins are going to be squeezed going forward. = That means=20 in the coming year, the homebuilders will have more difficult Q over Q = or Y over=20 Y comparisons. Also, my own family owns a construction business, so I = have seen=20 these cycles first hand. You are right that the consumer seems willing = to take=20 on the additional debt and I think that, along with other economic = indicators,=20 says that the economy is far from plunging into the depths. But these = things=20 don't necessarily translate into good equity investments.</DIV> <DIV> </DIV> <DIV>Happy Holidays,</DIV> <DIV>Katherine</DIV> <BLOCKQUOTE dir=3Dltr=20 style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; = BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px"> <DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV> <DIV=20 style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: = black"><B>From:</B>=20 <A title=3Dstkguru@netside.net href=3D"mailto:stkguru@netside.net">Tom = Worley</A>=20 </DIV> <DIV style=3D"FONT: 10pt arial"><B>To:</B> <A = title=3Dcanslim@lists.xmission.com=20 href=3D"mailto:canslim@lists.xmission.com">CANSLIM</A> </DIV> <DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Saturday, December 22, = 2001 10:49=20 AM</DIV> <DIV style=3D"FONT: 10pt arial"><B>Subject:</B> [CANSLIM] Worley's = Weekend=20 Weeview</DIV> <DIV><BR></DIV> <DIV><FONT size=3D2><STRONG>HOUSING STARTS, = PERMITS</STRONG></FONT></DIV> <DIV><FONT size=3D2>Both up sharply for November, ahead of = expectations. Starts=20 were up 8.2%, permits 5.3%. In terms of fueling consumer spending, the = purchase of a new home is one of the greatest factors, so strength = here=20 translates into increases sales of everything from building materials = to=20 furniture, appliances, carpet, curtains, etc. It also shows a = willingness to=20 commit to long term debt even in the face of high unemployment.=20 <HR> </FONT></DIV> <DIV><FONT size=3D2><STRONG>ON ECONOMICS</STRONG></FONT></DIV> <DIV><FONT size=3D2>Lately this topic seems to be one of = contradictions more=20 than consistency. The final GDP figure for the Third Quarter finishes = up at a=20 decline of 1.3% (worst in ten years), down more than expected even = after the=20 interim revision. This is a big number to overcome, and in my mind = makes it=20 virtually certain that the Fourth Quarter will report a negative = number,=20 confirming recession even by traditional standards. At the same time, = the 11=20 aggressive Fed rate cuts this year seem only to have kept the economy = from=20 total collapse, rather than beginning a recovery. Yet there are signs = of=20 recovery, or at least bottoming, in many indicators. Does this mean we = still=20 need a Congressional mandated "economic stimulus" package, or will = this just=20 end up being more pork barrel wastage of taxpayers money? (personally = I think=20 the latter, I don't trust Congress with my money). Auto sales in = October, with=20 zero percent loans, have already proven to have cannibalized November = sales,=20 and likely well into next year. Yet other big purchases, such as = homes, remain=20 surprisingly strong. I do note here that historically people get = greedy when=20 mortgage rates are falling, and tend to wait to commit until they see = rates=20 turning up as they have, then rush to lock in the sales contract or = loan. But=20 then there is the Michigan Consumer Sentiment index, gaining ground to = 88.8=20 from the preliminary 85.8, and up strongly from the 83.9 for the end = of=20 November. And it did that even as November's consumer spending dropped = 0.7%=20 (slightly better than expected and reflecting the drop in car sales)=20 and personal income fell 0.1%, considerably worse than = expectations of a=20 0.2% gain. And layoffs continue, and unemployment is high and expected = to go=20 even higher (to 6% or even 6.5%, fortunately it's a lagging indicator = of the=20 economy). October personal income was also revised lower by 0.1%. = Still, the=20 "experts" are predicting economic recovery by the middle of 2002, and = even=20 indicating positive growth during the first half.=20 <HR> </FONT></DIV> <DIV><FONT size=3D2><STRONG>WORLEY'S WATCHLIST = WANNABES</STRONG></FONT></DIV> <DIV><FONT size=3D2>As usual, Bx means a flat line "B"ase of "x" weeks = duration,=20 IMO. I will mention if I see other basing formations such as a = c&h, double=20 bottom, LLUR, etc. Remember that I am only looking at the past six = months of=20 the chart, and not doing any other due diligence than to ensure = (unless=20 otherwise mentioned) that the stocks mentioned have both an RS and an = EPS of=20 80 or better, and are close (within 10%) of their 12 month = high.</FONT></DIV> <DIV> </DIV> <DIV><FONT size=3D2>AAON - nice cup&handle, handle now 4 weeks = long, drooped=20 down, now drifting up on light end of year volume</FONT></DIV> <DIV><FONT size=3D2>ACS - LLUR</FONT></DIV> <DIV><FONT size=3D2>ASFI - B2, RS under 80, in my VR fund</FONT></DIV> <DIV><FONT size=3D2>AGM - B5</FONT></DIV> <DIV><FONT size=3D2>AGY - price weakness on volume may be altering the = newly=20 started LLUR pattern</FONT></DIV> <DIV><FONT size=3D2>ALLY - same comment, same group, but the high = volume is not=20 there</FONT></DIV> <DIV><FONT size=3D2>AMMD - began to b/o from a saucer on volume=20 Friday</FONT></DIV> <DIV><FONT size=3D2>BVF - LLUR</FONT></DIV> <DIV><FONT size=3D2>CAKE - B2+</FONT></DIV> <DIV><FONT size=3D2>CECO - B2+</FONT></DIV> <DIV><FONT size=3D2>CPO - nice b/o Friday to the pivot on nearly 3X = ADV,=20 earnings forecast for new year +31%</FONT></DIV> <DIV><FONT size=3D2>CVBF - breaking the pivot on a B9 on Friday with = heavy=20 volume</FONT></DIV> <DIV><FONT size=3D2>DFXI - B3 on a weak double bottom?</FONT></DIV> <DIV><FONT size=3D2>DLX - LLUR despite weak earnings</FONT></DIV> <DIV><FONT size=3D2>FRED - LLUR, high PE trailing, but earnings = forecast at=20 +22%</FONT></DIV> <DIV><FONT size=3D2>IDPH - B6, strong earnings forecast</FONT></DIV> <DIV><FONT size=3D2>ISLE - B3, strong earnings forecast, in my VR=20 Fund</FONT></DIV> <DIV><FONT size=3D2>JNC - LLUR</FONT></DIV> <DIV><FONT size=3D2>LOW - B3</FONT></DIV> <DIV><FONT size=3D2>MHO - B2+, earnings forecast to decline next year, = home=20 builder</FONT></DIV> <DIV><FONT size=3D2>MIMS - really ragged LLUR but with powerful = earnings=20 forecast, low priced ($15)</FONT></DIV> <DIV><FONT size=3D2>NDN - B3</FONT></DIV> <DIV><FONT size=3D2>NFI - CAT LLUR</FONT></DIV> <DIV><FONT size=3D2>NMTC - B2+</FONT></DIV> <DIV><FONT size=3D2>PBY - B2+</FONT></DIV> <DIV><FONT size=3D2>PETM - RAT LLUR</FONT></DIV> <DIV><FONT size=3D2>POSS - LLUR</FONT></DIV> <DIV><FONT size=3D2>RYAAY - B6</FONT></DIV> <DIV><FONT size=3D2>RYAN - LLUR, earnings weak</FONT></DIV> <DIV><FONT size=3D2>SASR - up 50% in six months on a steady, = consistent LLUR,=20 but b/o Friday on volume violates the pattern</FONT></DIV> <DIV><FONT size=3D2>STJ - B4</FONT></DIV> <DIV> </DIV> <DIV><FONT size=3D2>Happy Hunting,</FONT></DIV> <DIV> </DIV> <DIV><FONT size=3D2>God bless America, and its military = people</FONT></DIV> <DIV> </DIV> <DIV><FONT size=3D2>Merry Christmas to all, have a safe and happy=20 celebration,</FONT></DIV> <DIV> </DIV> <DIV><FONT size=3D2>Tom Worley<BR><A=20 href=3D"mailto:stkguru@netside.net">stkguru@netside.net</A><BR>AIM:=20 TexWorley<BR></FONT></DIV></BLOCKQUOTE></BODY></HTML> - ------=_NextPart_000_0054_01C18AE0.997D07E0-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". 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