[CANSLIM] Industry group movements.

From: "Gary A. Snyder" <gas175k@hotmail.com>
Subject: [CANSLIM] Industry group movements.
Date: Sun, 17 Feb 2002 08:29:38 -0500

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I am fascinated by industry group movement but can't figure out what move 
groups up and down. For example: EPIQ is for sure a fine investment and I 
have owned it but the last big move it made from about 13 to 25 the industry 
group moved from at least the lower B group to 30-32. If the industry group 
had not moved EPIQ would still be building a base. In the same group BARZ 
went from 35 to 55, ADVS 29 to 51, FIC 39 to 63, BSYS 44 to 63. Even thought 
these companies offer completely different software to the financial 
industry. A few months ago IBD used GNSS, a semi manufacture, as an example 
of a successful cup and handle but failed the mention that the industry 
group started up from a e rating and worked its way up to at least the mid b 
rating, against WON rule look in the top sixty groups.  Not just GNSS, all 
the semi manufacturing stocks were going up even if they were over bought by 
as much as 50%. You may think that you are picking good companies and you 
are but they are not going anywhere until the industrial group is going up. 
So what moves these industry groups? Some are easy to figure: defense 
stocks- government spending to increase dramatically per purposed budget. 
Safety and security- the terrorist effect. Any computer group a month ago- I 
don't have a clue. You don't want to know how poorly some of these security 
companies were rated when they started moving up and they are not 
fundamentally good companies but that doesn't matter if the market perceives 
future growth. Some of these security companies have very poor fundamentals 
but that does not stop them from going through the roof if the industry 
group is on the rise. The rating on some of these companies look great 
now(after the fact). Lower oil prices helped the success of 
transportation/trucking even in a bad economy but if the price of oil goes 
up for any of a number of reasons, number one being Iraq targeted as the 
next enemy on the war on terrorism transportation/trucking will go down so 
fast only bested by oil&gas/any company with proved oil reserves going up. 
You don't have to pick the best company in the group. Throw a dart at any 
company on the list for success. Home builders: low interest rates, 
increased new home sales, increased building permits but let the interest 
rates go up a little and home builders start correcting along with home 
mortgage businesses and banks living on refinancing income. In fact let an 
influential analysis say interest rates have bottomed and all these groups 
start down no proof needed.Good companies along with bad. I'm confused and 
bloodied but feel one key is tracking industry groups. I ask for comment 
and/or instruction. gas175k



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