Go to Jeff Salisbury LWGate Home Page.From: Spencer48@aol.com
Subject: Re: [CANSLIM] Lack of Buy Candidates
Date: Sat, 16 Feb 2002 23:49:14 EST
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Katherine:
Apropos of your E-mail, then, are you stating that the Market's
direction isn't as important as WON says it is. He says that about 70% of
stocks will fall, no matter how great their earnings are, during a bear
market. That's why he advises not to go long during a bear.
I've been taking this advice. Anecdotally, based on my experience in
the market, his advice regarding the Market's direction and when and when not
to buy stocks always seemed valid. However, as I understand it, you are
saying that strong stocks (stocks with high and accelerating earnings) in
strong industries will do well-even during a bear. And how do you define a
"strong industry"? The top 40% of IBD's 197?
I wonder if WON has ever done a statistical study on the 70% failure
rate of strong stocks WHEN the strong stock is in a strong industry? It
would be very interesting to see if the 70% falls, and by how much it falls.
It would be even more eye-opening if he were able to statistically correlate
the strength of the industry (during a bear) with the likelihood that the
stock would rise or fall.
jans
In a message dated 2/16/2002 10:57:52 AM Eastern Standard Time,
kmalm@earthlink.net writes:
<< I don't buy the CANSLIM party line that you should "stay out" of the
market if there aren't 1000's of stocks to choose from. I look for good
stocks with rising relative strength, strategic advantage and good technical
strength that are members of rising and strong industry groups. I sell stocks
that break down technically or that are members of a group that is beginning
to break down. I short stocks/groups in industries that are breaking down to
take advantage of the prevailing winds. I let the market tell me which kinds
of stocks are doing well. Whether it's value/growth, small/mid/large cap,
industry group, I'm agnostic (except that I *do* stay away from super
microcaps). What works, works and I have a methodology that looks for what's
working.
The "market" is nothing more than a market of stocks. Too many people focus
on what's *not* working and miss the many great opportunities that are out
there. One of my mentors always says "when the market speaks, have big ears."
I say, "when a stock and an industry speaks, have big ears." As I see it, too
many folks are still focused on what *was* working during the last Great Bull
market. This is the history of markets... >>
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