Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: [CANSLIM] Our Very Own Tom Worley Makes the Big TIme!!
Date: Thu, 10 Jan 2002 18:50:14 -0600
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Once again, CONGRATULATIONS!!! --Katherine
The Smart Investor
=20
Thursday, January 10, 2001
View IBD Investor Profile archive.=20
Bringing Market Direction Into The Mix
BY CLAIRE MENCKE
INVESTOR'S BUSINESS DAILY
Even folks who think they've paid their dues in investing can learn a =
lot from CAN SLIM, Tom Worley says.
Worley, a bank operations manager, might have thought he'd seen it all. =
He started investing when he was 10.
"My uncle worked for Florida Steel," he said. "It was publicly traded =
then, but it still wasn't profitable. He gave my siblings and I one =
share each for Christmas."
For Worley, it was the gift that kept on giving.
"Back then, there wasn't much junk mail," he said. "So a 10-year-old =
like me treasured any mail received. When the quarterly report or annual =
statement with proxy arrived, I devoured it."
The share also got him into analyzing stocks.
"I made my first financial forecast about a year later when I told my =
uncle the company would be profitable in six months," said Worley. "That =
was about a year ahead of what the company accountants were expecting. I =
was right and they were wrong."
Worley, now 53, took from that much of the approach to stocks that he =
still uses.
"It's probably one reason I became so based in fundamentals," he said. =
"I have tried everything pretty much, from value investing and bottom =
fishing to momentum. I'm basically a fundamentalist at heart."
- -------------------------------------------------------------------------=
- -------
Image: A Marathon Run
- -------------------------------------------------------------------------=
- -------
Fundamentals were what drew him to Epiq Systems (EPIQ). Worley first =
bought shares of the financial software firm in early 1999, and still =
owns a position in it.
Three years ago, Epiq had been public for just about two years and =
already had shown year-over-year acceleration in sales, cash flow and =
earnings growth.=20
But the fundamental approach wasn't without its issues, says Worley. He =
had done a stint as a retail broker for a firm that underwrote small-cap =
companies' shares. That introduced him to the inner workings of many =
companies. But there were drawbacks, he says.
"My most frequent pre-CAN SLIM mistake was convincing myself that I =
understood a company better than the market," said Worley. "Then I'd =
hold it when everyone else was selling."
CAN SLIM lends a helpful counterbalance. "What it does for me is provide =
an objective way of measuring a company's true fundamentals against all =
other stocks in its group, as well as all stocks," Worley said. "It also =
provides a healthy balance of momentum considerations against my own =
too-strong fundamentals weighing."
Reason To Succeed
Worley says he aims to buy stocks of companies "that have a reason to be =
highly successful over the long term." Still, CAN SLIM has great value =
because "it improved my sense of timing on when to get in and get out," =
Worley said.
Small stocks still are his favorites, he says. "But size by itself isn't =
a determining factor," Worley said. "My very first screen is the daily =
list of stocks that hit a new high that day."
These stocks are "the starting point for finding stocks with no overhead =
within 12 months," he said. "Then I examine their earnings, sales, ROE, =
group strength, relative strength and EPS ratings, chart formation, =
accumulation/distribution ranks and timeliness."
He wants companies to be profitable for at least two quarters.
Quarter-to-quarter "sequential earnings and sales are more important to =
me than year-to-year percentage increases," he said. "If last year was a =
very weak year, it's easy to generate easy percentage comparisons this =
year, and hard to do the same next year if they are not still growing =
sequentially."=20
Worley says Epiq is probably his single best stock success. The company =
makes software for bankruptcy trustees.
"I found this one as I find most for my watch list, by using the daily =
list of stocks making new highs, and checking for their CAN SLIM =
characteristics," he said.
His first purchase of the stock netted a 70% return in almost exactly =
seven weeks, he says.
Worley says he tries to buy stocks that can double in price or better =
over a year to 18 months. With Epiq, "I saw that potential, but the 70% =
in seven weeks was too extreme," he said. He sold that position. But =
later, when the stock backed down from where he had sold it, he bought =
it again. His second and third purchases netted him 20% and 30% gains.
By then, Worley said he "realized the potential of a company doing so =
well when the economy was still strong. If (the bankruptcy software =
vendor) could do that well then, they would only flourish when the =
economy weakened" - as it did.
He bought the stock a fourth time in April 2000 at about 6.75, adjusted =
for splits. Ten months later, he sold half of it with a profit of around =
120%. Three months after that, he sold another quarter of the position =
for a 366% profit.
Personal Rule
"I have a personal rule that I must sell at least half a position upon =
the first sign of (stock price) weakness whenever I'm up over 100%," =
Worley said. "Given the opportunity, I want to take my investing capital =
off the table and play with someone else's money."
But Worley first uses the 20% gain rule to force himself to re-examine =
why he's in a stock.
When a stock is up 20%, "it's a reason to carefully examine the chart =
and be able to articulate why I was not selling it," he said.=20
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<DIV>
<H2 class=3Dtxthead><FONT color=3D#0000ff>Once again, <FONT=20
size=3D7>CONGRATULATIONS!!!</FONT></FONT> <FONT =
size=3D2>--Katherine</FONT></H2>
<H2 class=3Dtxthead>The Smart Investor</H2><FONT size=3D2> <FONT =
size=3D2>
<P class=3Dtxtsub>Thursday, January 10, 2001</P></FONT><FONT size=3D2><A =
href=3D"http://www.investors.com/editorial/testimony01.asp?v=3D1/10">View=
IBD=20
Investor Profile archive.</A></FONT>=20
<H3><FONT size=3D3>Bringing Market Direction Into The =
Mix</FONT></H3><!--- DO NOT DELETE THIS LINK --->
<P class=3Dbyline>BY CLAIRE MENCKE</P>
<P class=3Dibd>INVESTOR'S BUSINESS DAILY</P>
<P>Even folks who think they've paid their dues in investing can learn a =
lot=20
from CAN SLIM, Tom Worley says.</P>
<P>Worley, a bank operations manager, might have thought he'd seen it =
all. He=20
started investing when he was 10.</P>
<P>"My uncle worked for Florida Steel," he said. "It was publicly traded =
then,=20
but it still wasn't profitable. He gave my siblings and I one share each =
for=20
Christmas."</P>
<P>For Worley, it was the gift that kept on giving.</P>
<P>"Back then, there wasn't much junk mail," he said. "So a 10-year-old =
like me=20
treasured any mail received. When the quarterly report or annual =
statement with=20
proxy arrived, I devoured it."</P>
<P>The share also got him into analyzing stocks.</P>
<P>"I made my first financial forecast about a year later when I told my =
uncle=20
the company would be profitable in six months," said Worley. "That was =
about a=20
year ahead of what the company accountants were expecting. I was right =
and they=20
were wrong."</P>
<P>Worley, now 53, took from that much of the approach to stocks that he =
still=20
uses.</P>
<P>"It's probably one reason I became so based in fundamentals," he =
said. "I=20
have tried everything pretty much, from value investing and bottom =
fishing to=20
momentum. I'm basically a fundamentalist at heart."</P>
<HR>
<P class=3Drightboxlink><A=20
href=3D"http://www.investors.com/images/editimg/Edu0110.gif"><IMG =
height=3D15=20
src=3D"http://www.investors.com/images/editimg/chart.gif" width=3D15=20
border=3D0> Image: <U>A Marathon Run</U></A></P>
<HR>
<P>Fundamentals were what drew him to Epiq Systems (<A=20
href=3D"javascript:popup=3Dwindow.open('http://www.investors.com/smartsel=
ect/SmartSelect.asp?x=3DG3S4M5V6','SmartSelectPop','width=3D610,height=3D=
420,directories=3Dno,status=3Dno,location=3Dno,toolbar=3Dno,scrollbars=3D=
no,resizable=3Dyes,menubar=3Dno,copyhistory=3Dno,alwaysRaised=3D0,depende=
nt=3Dno');popup.focus();">EPIQ</A>).=20
Worley first bought shares of the financial software firm in early 1999, =
and=20
still owns a position in it.</P>
<P>Three years ago, Epiq had been public for just about two years and =
already=20
had shown year-over-year acceleration in sales, cash flow and earnings =
growth.=20
</P>
<P>But the fundamental approach wasn't without its issues, says Worley. =
He had=20
done a stint as a retail broker for a firm that underwrote small-cap =
companies'=20
shares. That introduced him to the inner workings of many companies. But =
there=20
were drawbacks, he says.</P>
<P>"My most frequent pre-CAN SLIM mistake was convincing myself that I=20
understood a company better than the market," said Worley. "Then I'd =
hold it=20
when everyone else was selling."</P>
<P>CAN SLIM lends a helpful counterbalance. "What it does for me is =
provide an=20
objective way of measuring a company's true fundamentals against all =
other=20
stocks in its group, as well as all stocks," Worley said. "It also =
provides a=20
healthy balance of momentum considerations against my own too-strong=20
fundamentals weighing."</P>
<P><B>Reason To Succeed</B></P>
<P>Worley says he aims to buy stocks of companies "that have a reason to =
be=20
highly successful over the long term." Still, CAN SLIM has great value =
because=20
"it improved my sense of timing on when to get in and get out," Worley =
said.</P>
<P>Small stocks still are his favorites, he says. "But size by itself =
isn't a=20
determining factor," Worley said. "My very first screen is the daily =
list of=20
stocks that hit a new high that day."</P>
<P>These stocks are "the starting point for finding stocks with no =
overhead=20
within 12 months," he said. "Then I examine their earnings, sales, ROE, =
group=20
strength, relative strength and EPS ratings, chart formation,=20
accumulation/distribution ranks and timeliness."</P>
<P>He wants companies to be profitable for at least two quarters.</P>
<P>Quarter-to-quarter "sequential earnings and sales are more important =
to me=20
than year-to-year percentage increases," he said. "If last year was a =
very weak=20
year, it's easy to generate easy percentage comparisons this year, and =
hard to=20
do the same next year if they are not still growing sequentially." </P>
<P>Worley says Epiq is probably his single best stock success. The =
company makes=20
software for bankruptcy trustees.</P>
<P>"I found this one as I find most for my watch list, by using the =
daily list=20
of stocks making new highs, and checking for their CAN SLIM =
characteristics," he=20
said.</P>
<P>His first purchase of the stock netted a 70% return in almost exactly =
seven=20
weeks, he says.</P>
<P>Worley says he tries to buy stocks that can double in price or better =
over a=20
year to 18 months. With Epiq, "I saw that potential, but the 70% in =
seven weeks=20
was too extreme," he said. He sold that position. But later, when the =
stock=20
backed down from where he had sold it, he bought it again. His second =
and third=20
purchases netted him 20% and 30% gains.</P>
<P>By then, Worley said he "realized the potential of a company doing so =
well=20
when the economy was still strong. If (the bankruptcy software vendor) =
could do=20
that well then, they would only flourish when the economy weakened" =
— as it=20
did.</P>
<P>He bought the stock a fourth time in April 2000 at about 6.75, =
adjusted for=20
splits. Ten months later, he sold half of it with a profit of around =
120%. Three=20
months after that, he sold another quarter of the position for a 366%=20
profit.</P>
<P><B>Personal Rule</B></P>
<P>"I have a personal rule that I must sell at least half a position =
upon the=20
first sign of (stock price) weakness whenever I'm up over 100%," Worley =
said.=20
"Given the opportunity, I want to take my investing capital off the =
table and=20
play with someone else's money."</P>
<P>But Worley first uses the 20% gain rule to force himself to =
re-examine why=20
he's in a stock.</P>
<P>When a stock is up 20%, "it's a reason to carefully examine the chart =
and be=20
able to articulate why I was not selling it," he said.=20
</P></FONT></DIV></BODY></HTML>
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Next Article (by Date): RE: [CANSLIM] tom worley-the smart investor "DiFabio, Nancy"
Previous Article (by Date): RE: [CANSLIM] ASIA? "Dave"
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