Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: AW: [CANSLIM] Lack of Buy Candidates
Date: Sun, 17 Feb 2002 21:31:53 -0600
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Hi David,
Thanks for the kind words and I'd like to speak up in Tom's defense. He =
is square and straightforward about what he does at all times. He =
learned from WON early in his career and he has learned to mold CANSLIM =
to his personal preferences. I can't say that I agree with everything =
Tom does only in the sense that it is not "right for me." But that is =
far different than judging whether or not it is successful and/or "right =
for him."
With respect to telling returns, I think this is a *very* personal =
issue. I, for example, look upon returns and absolutely *anything* to do =
with what positions I am currently holding, what stocks I am looking at, =
what % winners vs. losers, etc. as extremely personal. I put it right up =
there with a question like "what's your salary" or "what's your net =
worth." I was recently hammered by several folks when I made a =
presentation in Dallas and would not reveal such things. I figure it's =
my business and mine alone. There's absolutely no way to win when such =
things are revealed. Either people believe that you are boasting, not =
telling the truth, that your earnings are paltry by comparison to their =
own, etc. etc. On the other hand, if someone reveals their returns, I =
figure that's their business as well. I view this as a personal choice =
and make no judgments either way. It's a tough market out there. In the =
end, I find it's far more important at the end of the day to be able to =
ask myself "did I do everything possible to earn the best returns that =
I am able." To me, if I can answer "yes" to that question, then I have =
had a successful day. I applaud Tom's returns, but I applaud his =
willingness to admit that his returns in '99 would have been more =
substantial if he'd focused on his portfolio with the same intensity =
that he did in '01. *That's* the message I take away from his statement.
- --Katherine
While we're on the subject of returns, here's something that I wrote =
during a discussion over this very issue:
Returns.What Does That Mean?
I never make assumptions about the numbers people give when they specify =
returns. Here are some examples as to why. For all examples I'll use a =
simple total portfolio number of $100K at the beginning of the year. All =
percentages and dollar amounts are used only for the purpose of =
demonstration.
(1) Invested vs. Investable monies:
- - Statement: I made 50% last year.=20
- - Person A makes 50% on *invested* monies. Lets say A invests $10K =
and earns 50%. Total ending value =3D $15K. But what about the $90K that =
wasn't invested? Let's say it made 5% in bonds and/or cash. That means =
it's now worth $94,500. Total ending portfolio =3D $109,500. Total =
compounded returns for the year =3D 0.095%. That's less than 1%. =
Certainly doesn't make the same statement as "I made 50%."
- - Person B makes 50% on *investable* monies. B invests $50K in bonds =
and/or cash. Say it earns 5%. Ending value =3D $52,500. The remaining is =
invested and earns enough so that the total portfolio earns 50%. That =
means the ending portfolio is $150,000. Invested monies accounted for =
$97,500 of this ending value. This means that B turned $50K into $97.5K =
by the end of the year through active investing. Total returns on =
*invested* monies =3D 95%.=20
- - Part of effective money management and risk control is to =
determine how much of your investable dollars you are willing to risk. =
Your ability to consistently earn a return on invested dollars will =
allow you to increase the percentage of investable dollars. Don't assume =
that every person who tells you they earned 50% is able to do this =
consistently. And certainly don't assume that all of their investable =
dollars earned 50%. Also keep in mind that there are actually people who =
would rather understate their returns than overstate them.
(2) Risk
- - Statement: I earned 50% with this system.
- - Person A earns 50% on invested dollars. Maximum drawdown on total =
portfolio -50%. Person A also margined 100% of their account to generate =
these returns. The average beta for the portfolio was 3 times the market =
average.
- - Person B earns 50% on invested dollars. Maximum drawdown -10%. =
They did not margin and the average beta of the portfolio was 1.5 times =
the market average. This person by far earned the higher risk adjusted =
return.
- - A good trader is able to consistently generate returns with the =
least amount of risk.
(3) Open positions at year's end
- Statement: I earned 50% last year.
- - Person A had 5 open positions on 12/31 that accounted for 15% =
of that gain. On January 15th of the following year, the market dive =
bombed and they were forced to sell at a loss.
- - Person B had 5 open positions on 12/31 that accounted for 15% =
of potential gains. Until these gains are monetized, they do not include =
them in the total for the year.
- - Intermediate term investors will often carry a position for =
several weeks to several months. Until you sell the position (monetize =
it), the gains are fairy dust. The bank might be willing to lend you =
money against the value of your assets, but these dollars are not "real" =
until they are in your pocket. If you have any doubts, go ask Barry =
Ebbers of Worldcom why he had to sell stock to satisfy the bank.
(4) Average vs Compounded returns
- - Statement: I earn 50% on average.
- - Person A earned 200% one year and (-100%) the next. Average return =
is (200-100)/2 =3D 50%. Sound impressive? They're flat broke.
- - Person B earned an average 50% compounded return over the last 5 =
years. That means that if they started with $100K year one, they now =
have $100K*(1.50)^5 =3D $759,375. (Even after 2 years, they have =
$225,000)
(5) Annualized vs Actual
- Statement: I earned 50% on that trade.
- - Person A made an investment during the year that earned 12.5% =
in 2 weeks. They have annualized this as 12.5% * (10days/250days) =3D =
50%.
- - Person B made an investment that returned 50% in two months. =
They have an annualized return on this investment of approximately 50% * =
(40days/250days) =3D 800%
(6) Personal Ownership v. Professional Management
- - Statement: I earned 50% last year.
- - Person A has 10% of their money in an account that they manage =
personally. The remaining 90% is with a money manger. They earned 50% on =
only 10% of their money.
- - Person B takes responsibility for 100% of their investable assets. =
They earned 50% on 100% of those investable assets.
(7) Gross vs. Net Returns
- - Statement: I earned 50% last year.
- - Person A made 50% *gross* returns on investable assets. Their =
ending portfolio was $150,000. This does not include the $2K they spent =
purchasing various trading systems nor commissions paid during the year =
to generate these returns. A treats their investments like a hobby and =
spends money freely to find "a better system."
- - Person B made 50% *net* returns on investable assets. They =
spent $2K in commissions; subscriptions to business and investing =
magazines, newspapers and tools; investing books; investing seminars and =
the associated costs to attend these seminars. B treats their =
investments like a business and evaluates all tools and expenditures as =
to how they generate a return on investment.
(8) Taxable vs Tax Deferred Account/Before vs After Tax
- - Statement: I earned 50% last year.
- - Person A earned 50% in their tax deferred IRA.
- - Person B earned 50% *after taxes* in their taxable account.
Conclusion: Numbers alone don't tell you a darned thing.
- --Katherine
----- Original Message -----=20
From: David Squires=20
To: canslim@lists.xmission.com=20
Sent: Sunday, February 17, 2002 8:45 PM
Subject: Re: AW: [CANSLIM] Lack of Buy Candidates
>>Your comments about EPIQ as a "big winner" in the portfolio remind =
me of comments I often hear from others when we have discussions about =
the big winners in our portfolios. On one hand, it really bugs me to =
hear people say "well, yeah, of course you had great returns, you had =
XXXX an YYYY....you were just lucky." Excuse me? I found XXXX and YYYY =
using the same methodical diligence I apply to all my buys. The =
difference is, these guys never triggered sell rules like all the =
others. Last Fall, I listened to a presentation by Kevin Marder, a hedge =
fund manager and a CANSLIM-style investor. He said the same thing that =
I've heard from other successful investors. "At the end of each year I =
give my accountant a list of my trades for tax purposes. On that list =
are a bunch of trades with very small losses. Also on that list are some =
really big gains that were responsible for most of my returns for the =
year. This happens every year without exception."<<
Katherine,
You are a true gem...my hat is off to you and eye open to everything =
you write...from my experience....you indeed "get it". However, I'm not =
so sure Tom should be cast in the light of Kevin Marder. What's the =
point of telling everyone what you netted last year??......it's a =
totally unverifiable assertion and only fodder for ones online ego. =
Spare me. It still amazes me the proclaimed master of the CANSLIM =
list,...."routinely violates CANSLIM rules" and everyone just sits =
there. I guess everyone's numb from a 2 year bear raid.
DSquires
----- Original Message -----=20
From: Katherine Malm=20
To: canslim@lists.xmission.com=20
Sent: Sunday, February 17, 2002 10:57 AM
Subject: Re: AW: [CANSLIM] Lack of Buy Candidates
Hi Tom,
Your comments about EPIQ as a "big winner" in the portfolio remind =
me of comments I often hear from others when we have discussions about =
the big winners in our portfolios. On one hand, it really bugs me to =
hear people say "well, yeah, of course you had great returns, you had =
XXXX an YYYY....you were just lucky." Excuse me? I found XXXX and YYYY =
using the same methodical diligence I apply to all my buys. The =
difference is, these guys never triggered sell rules like all the =
others. Last Fall, I listened to a presentation by Kevin Marder, a hedge =
fund manager and a CANSLIM-style investor. He said the same thing that =
I've heard from other successful investors. "At the end of each year I =
give my accountant a list of my trades for tax purposes. On that list =
are a bunch of trades with very small losses. Also on that list are some =
really big gains that were responsible for most of my returns for the =
year. This happens every year without exception."
On the other hand, a comment such as "you were just lucky" makes me =
smile and nod in agreement, because I define luck as "being prepared =
when the opportunity arises and being willing to seize it." Yes, big =
winners are about luck in that sense. Finally, one of my favorite quotes =
and one that always stays in view at my desk:
"Opportunities are usually disguised as hard work, so most people =
don't recognize them." --Anne Landers
Here's to "big winners" and your continued "good luck"!
Cheers,
Katherine
----- Original Message -----=20
From: Tom Worley=20
To: canslim@lists.xmission.com=20
Sent: Saturday, February 16, 2002 3:34 PM
Subject: Re: AW: [CANSLIM] Lack of Buy Candidates
Your memory is pretty good, altho I consider buying small caps as =
much
closer to classic CANSLIM rules for "S" than IBD or WON currently =
pushes.
I wasn't losing money during the roaring bulls, just not making =
what I
could. But that was not the fault of my application of CANSLIM, it =
was a
direct consequence of total neglect of my portfolio due dedication =
and hours
spent on my day job. But even with total neglect, I still managed =
about 12%
or so without trading, so at least better than a money market.
You are correct also that EPIQ was a major contributor to my =
profits in
2001, and I expect it to continue contributing in 2002. But I =
finished the
year with every stock I owned up for the year, and with minimal =
trading. I
only bought two new ones in 2001, the rest I had owned from prior =
years. So
far in 2002, I have added 6 new ones, and sold one (merger =
announced). Altho
three of the new ones are presently down, I am still up a little =
overall.
And having fun.
Tom Worley
stkguru@netside.net
AIM: TexWorley
----- Original Message -----
From: "esetser" <esetser@covad.net>
To: <canslim@lists.xmission.com>
Sent: Saturday, February 16, 2002 11:01 AM
Subject: Re: AW: [CANSLIM] Lack of Buy Candidates
Be careful here, Tom has his own special breed of CANSLIM, and it =
seems
that his returns have NOT been a good indicator of average returns =
in the
group. Unless I'm mistaken, Tom was losing money or breaking even =
back in
the roaring bull, so maybe it was just his turn!!
Tom does at least the following different from my approach (just =
from
memory):
1 - Microcaps only (below the minimum recommended by WON) (S?)
2 - Buys in the base before the breakout (Needs to because of 1)
3 - Doesn't use Industry Group Strength as a leader/laggard =
indicator (I)
4 - Buys in all markets (M)
>From my perspective, he violates the normal rules for S, I, and =
M.
However, Tom does admit to this, and doesn't even generally post =
his
selections due to these variations.
Given the differences, I think it should be expected that Tom's =
performance
over a given year will vary from many of us. (And there is that =
one stock
that has appreciated several times his original investment that is
impacting the results too!)
One other note. From my perspective, Tom's value to the group is =
his
willingness to take the time to review most anyone's suggestions =
and
selections and give great detail in his responses. His general =
approach
may not follow CANSLIM exactly, but his postings to the group do =
following
WON quite closely. He is our master educator on the technique, =
and gives a
lot of time and effort to the group.
FWIW, I ended up 2001 with about a 13% loss and am down about 6% =
more this
year so far. Presently, I am only 25% invested with one position. =
I am
not really responding on the group much, since I do not feel I =
have the
experience to short, and I am waiting for "M" to clear up before =
new
purchases.
At 11:36 AM 2/16/02 +0100, you wrote:
>I think Tom bend only one rule --> stay out of the market if =
there is a
>downtrend in the overall market.
>
>But as I said, if you choose small caps and or IGs that are going =
up, no
>problem making money on the long side.
>Just look on the builders or on the gold stocks latley ...
>
>BUT NEVER, NEVER buy stocks when the market and the IG is down.
>I have not seen one example where a member of the group does not =
break down
>then (besides its a small cap) as well.
>
>Some IGs are just setting up a bull market for its members no =
matter what
>the market is doing.
>
>> -----Urspr=FCngliche Nachricht-----
>> Von: Tom Worley [SMTP:stkguru@netside.net]
>> Gesendet am: Saturday, February 16, 2002 6:19 AM
>> An: canslim@lists.xmission.com
>> Betreff: Re: [CANSLIM] Lack of Buy Candidates
>>
>> While I routinely violate CANSLIM rules, nonetheless my entire =
process is
>heavily based in CANSLIM. And I netted 76% for the full year, so =
yeah, I
>made a net profit.
>>
>> Tom Worley
>> stkguru@netside.net
>> AIM: TexWorley
>> ----- Original Message -----
>> From: David Squires
>> To: canslim@lists.xmission.com
>> Sent: Saturday, February 16, 2002 12:11 AM
>> Subject: Re: [CANSLIM] Lack of Buy Candidates
>>
>>
>> haven't shorted in years, fully invested year round, made =
lots of $$
>last year, and profitable so far this year (including my fully =
margined
>account).
>>
>> >>fully invested year round, made lots of $$ last year<<
>>
>> You were fully invested last year long and made a net profit? =
You
>better call George Soros! BTW, is this even remotely CANSLIM.
>>
>> DSquires
>> ----- Original Message -----
>> From: Tom Worley
>> To: canslim@lists.xmission.com
>> Sent: Friday, February 15, 2002 10:47 PM
>> Subject: Re: [CANSLIM] Lack of Buy Candidates
>>
>>
>> haven't shorted in years, fully invested year round, made =
lots of $$
>last year, and profitable so far this year (including my fully =
margined
>account).
>>
>> Tom Worley
>> stkguru@netside.net
>> AIM: TexWorley
>> ----- Original Message -----
>> From: Dan Forant
>> To: canslim@lists.xmission.com
>> Sent: Friday, February 15, 2002 8:03 PM
>> Subject: Re: [CANSLIM] Lack of Buy Candidates
>>
>>
>> Of course it's absurd. If anyone's been in the market for =
the past
>year and hasn't shorted and made $$, they are either very lucky =
or far
>better than the average investor. There was no shortage of stocks =
to short
>in TC2000 and candlesticks.
>>
>> L8ter
>> DanF
>> ----- Original Message -----
>> From: Ian
>> To: canslim@lists.xmission.com
>> Sent: Friday, February 15, 2002 11:13 AM
>> Subject: Re: [CANSLIM] Lack of Buy Candidates
>>
>>
>> I find it almost absurd that WON discourages shorting. =
Almost all
>of WON's ideas appear to have originated with Jesse Livermore, =
who made the
>bulk of his money on the short side. The rules for selling a big =
CANSLIM
>winner make for perfect short candidates. Although selling a =
failed
>breakout as it returns into its base is NOT typically a good =
short
>candidate. JMHO.
>>
>> Ian
>>
>>
>>
>> ----- Original Message -----
>> From: Rob Miller
>> To: canslim@lists.xmission.com
>> Sent: Friday, February 15, 2002 6:40 AM
>> Subject: [CANSLIM] Lack of Buy Candidates
>>
>>
>> Even if we have a FTD from here, I see few stocks =
worth buying.
> However, my short list is overflowing. The only moderately =
attractive
>stocks I see on the long side are those already in an uptrend =
that are
>riding their lower channel.
>>
>> Is shorting considered off limits for this list? I =
know that
>WON discourages it, but he also claimed to make good money from =
shorts in
>HTMMIS. As I understand it, he discourages it as a medium for =
the masses,
>nor necessarily for everyone.
>>
>> Rob
>> << Datei: ATT00014.htm >>
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<DIV>Hi David,</DIV>
<DIV> </DIV>
<DIV>Thanks for the kind words and I'd like to speak up in Tom's =
defense. He is=20
square and straightforward about what he does at all times. He learned =
from WON=20
early in his career and he has learned to mold CANSLIM to his personal=20
preferences. I can't say that I agree with everything Tom does only in =
the sense=20
that it is not "right for me." But that is far different than judging =
whether or=20
not it is successful and/or "right for him."</DIV>
<DIV> </DIV>
<DIV>With respect to telling returns, I think this is a *very* personal =
issue.=20
I, for example, look upon returns and absolutely *anything* to do with =
what=20
positions I am currently holding, what stocks I am looking at, what % =
winners=20
vs. losers, etc. as extremely personal. I put it right up there with a =
question=20
like "what's your salary" or "what's your net worth." I was recently =
hammered by=20
several folks when I made a presentation in Dallas and would not reveal =
such=20
things. I figure it's my business and mine alone. There's absolutely no =
way to=20
win when such things are revealed. Either people believe that you are =
boasting,=20
not telling the truth, that your earnings are paltry by comparison to =
their own,=20
etc. etc. On the other hand, if someone reveals their returns, I figure =
that's=20
their business as well. I view this as a personal choice and make no =
judgments=20
either way. It's a tough market out there. In the end, I find it's far =
more=20
important at the end of the day to be able to ask myself "did I do =
everything possible to earn the best returns that I am able." To me, if =
I can=20
answer "yes" to that question, then I have had a successful day. I =
applaud Tom's=20
returns, but I applaud his willingness to admit that his returns in '99 =
would=20
have been more substantial if he'd focused on his portfolio with the =
same=20
intensity that he did in '01. *That's* the message I take away from his=20
statement.</DIV>
<DIV> </DIV>
<DIV>--Katherine</DIV>
<DIV> </DIV>
<DIV>While we're on the subject of returns, here's something that I =
wrote during=20
a discussion over this very issue:</DIV>
<P class=3DMsoNormal><STRONG>Returns…What Does That =
Mean?<?xml:namespace prefix =3D=20
o ns =3D "urn:schemas-microsoft-com:office:office" =
/><o:p></o:p></STRONG></P>
<P class=3DMsoNormal>I never make assumptions about the numbers people =
give when=20
they specify returns. Here are some examples as to why. For all examples =
I'll=20
use a simple total portfolio number of $100K at the beginning of the =
year. All=20
percentages and dollar amounts are used only for the purpose of=20
demonstration.</P>
<P class=3DMsoNormal>(1) Invested vs. Investable monies:</P>
<P class=3DIndented>-<SPAN=20
style=3D"mso-tab-count: =
1"> =20
</SPAN>Statement: I made 50% last year. </P>
<P class=3DIndented>-<SPAN style=3D"mso-tab-count: =
1"> =20
</SPAN>Person A makes 50% on *invested* monies. Lets say A invests $10K =
and=20
earns 50%. Total ending value =3D $15K. But what about the $90K that =
wasn't=20
invested? Let's say it made 5% in bonds and/or cash. That means it's now =
worth=20
$94,500. Total ending portfolio =3D $109,500. Total compounded returns =
for the=20
year =3D 0.095%. That's less than 1%. Certainly doesn't make the same =
statement as=20
"I made 50%."</P>
<P class=3DIndented>-<SPAN style=3D"mso-tab-count: =
1"> =20
</SPAN>Person B makes 50% on *investable* monies. B invests $50K in =
bonds and/or=20
cash. Say it earns 5%. Ending value =3D $52,500. The remaining is =
invested and=20
earns enough so that the total portfolio earns 50%. That means the =
ending=20
portfolio is $150,000. Invested monies accounted for $97,500 of this =
ending=20
value. This means that B turned $50K into $97.5K by the end of the year =
through=20
active investing. Total returns on *invested* monies =3D 95%. </P>
<P class=3DIndented>-<SPAN style=3D"mso-tab-count: =
1"> =20
</SPAN>Part of effective money management and risk control is to =
determine how=20
much of your investable dollars you are willing to risk. Your ability to =
consistently earn a return on invested dollars will allow you to =
increase=20
the percentage of investable dollars. Don't assume that every person who =
tells=20
you they earned 50% is able to do this consistently. And certainly don't =
assume=20
that all of their investable dollars earned 50%. Also keep in mind that =
there=20
are actually people who would rather understate their returns than =
overstate=20
them.</P>
<P class=3DMsoNormal>(2) Risk</P>
<P class=3DIndented>-<SPAN=20
style=3D"mso-tab-count: =
1"> =20
</SPAN>Statement: I earned 50% with this system.</P>
<P class=3DIndented>-<SPAN style=3D"mso-tab-count: =
1"> =20
</SPAN>Person A earns 50% on invested dollars. Maximum drawdown on total =
portfolio -50%. Person A also margined 100% of their account to generate =
these=20
returns. The average beta for the portfolio was 3 times the market =
average.</P>
<P class=3DIndented>-<SPAN style=3D"mso-tab-count: =
1"> =20
</SPAN>Person B earns 50% on invested dollars. Maximum drawdown -10%. =
They did=20
not margin and the average beta of the portfolio was 1.5 times the =
market=20
average. This person by far earned the higher risk adjusted return.</P>
<P class=3DIndented>-<SPAN style=3D"mso-tab-count: =
1"> =20
</SPAN>A good trader is able to consistently generate returns with the =
least=20
amount of risk.</P>
<P class=3DMsoNormal>(3) Open positions at year's end</P>
<P class=3DMsoNormal> -<SPAN=20
style=3D"FONT: 7pt 'Times New =
Roman'"> =20
</SPAN>Statement: I earned 50% last year.</P>
<P class=3DIndented=20
style=3D"MARGIN-LEFT: 39pt; mso-list: l2 level1 lfo3; tab-stops: list =
39.0pt">-<SPAN=20
style=3D"FONT: 7pt 'Times New =
Roman'"> =20
</SPAN>Person A had 5 open positions on 12/31 that accounted for 15% of =
that=20
gain. On January 15<SUP>th</SUP> of the following year, the market dive =
bombed=20
and they were forced to sell at a loss.</P>
<P class=3DIndented=20
style=3D"MARGIN-LEFT: 39pt; mso-list: l2 level1 lfo3; tab-stops: list =
39.0pt">-<SPAN=20
style=3D"FONT: 7pt 'Times New =
Roman'"> =20
</SPAN>Person B had 5 open positions on 12/31 that accounted for 15% of=20
potential gains. Until these gains are monetized, they do not include =
them in=20
the total for the year.</P>
<P class=3DIndented=20
style=3D"MARGIN-LEFT: 39pt; mso-list: l2 level1 lfo3; tab-stops: list =
39.0pt">-<SPAN=20
style=3D"FONT: 7pt 'Times New =
Roman'"> =20
</SPAN>Intermediate term investors will often carry a position for =
several weeks=20
to several months. Until you sell the position (monetize it), the gains =
are=20
fairy dust. The bank might be willing to lend you money against the =
value of=20
your assets, but these dollars are not “real” until they are =
in your pocket. If=20
you have any doubts, go ask Barry Ebbers of Worldcom why he had to sell =
stock to=20
satisfy the bank.</P>
<P class=3DMsoNormal>(4) Average vs Compounded returns</P>
<P class=3DMsoNormal>-<SPAN=20
style=3D"mso-tab-count: =
1"> =20
</SPAN>Statement: I earn 50% on average.</P>
<P class=3DIndented>-<SPAN style=3D"mso-tab-count: =
1"> =20
</SPAN>Person A earned 200% one year and (-100%) the next. Average =
return is=20
(200-100)/2 =3D 50%. Sound impressive? They're flat broke.</P>
<P class=3DIndented>-<SPAN style=3D"mso-tab-count: =
1"> =20
</SPAN>Person B earned an average 50% compounded return over the last 5 =
years.=20
That means that if they started with $100K year one, they now have=20
$100K*(1.50)^5 =3D $759,375. (Even after 2 years, they have =
$225,000)</P>
<P class=3DMsoNormal>(5) Annualized vs Actual</P>
<P class=3DMsoNormal> -<SPAN=20
style=3D"FONT: 7pt 'Times New =
Roman'"> =20
</SPAN>Statement: I earned 50% on that trade.</P>
<P class=3DIndented style=3D"mso-list: l1 level1 lfo2; tab-stops: list =
.5in">-<SPAN=20
style=3D"FONT: 7pt 'Times New =
Roman'"> =20
</SPAN>Person A made an investment during the year that earned 12.5% in =
2 weeks.=20
They have annualized this as 12.5% * (10days/250days) =3D 50%.</P>
<P class=3DIndented style=3D"mso-list: l1 level1 lfo2; tab-stops: list =
.5in">-<SPAN=20
style=3D"FONT: 7pt 'Times New =
Roman'"> =20
</SPAN>Person B made an investment that returned 50% in two months. They =
have an=20
annualized return on this investment of approximately 50% * =
(40days/250days) =3D=20
800%</P>
<P class=3DMsoNormal>(6) Personal Ownership v. Professional =
Management</P>
<P class=3DMsoNormal>-<SPAN=20
style=3D"mso-tab-count: =
1"> =20
</SPAN>Statement: I earned 50% last year.</P>
<P class=3DIndented>-<SPAN style=3D"mso-tab-count: =
1"> =20
</SPAN>Person A has 10% of their money in an account that they manage=20
personally. The remaining 90% is with a money manger. They earned 50% on =
only=20
10% of their money.</P>
<P class=3DIndented>-<SPAN style=3D"mso-tab-count: =
1"> =20
</SPAN>Person B takes responsibility for 100% of their investable =
assets. They=20
earned 50% on 100% of those investable assets.</P>
<P class=3DMsoNormal>(7) Gross vs. Net Returns</P>
<P class=3DMsoNormal>-<SPAN=20
style=3D"FONT: 7pt 'Times New =
Roman'"> =20
</SPAN>Statement: I earned 50% last year.</P>
<P class=3DIndented style=3D"mso-list: l0 level1 lfo1; tab-stops: list =
.5in">-<SPAN=20
style=3D"FONT: 7pt 'Times New =
Roman'"> =20
</SPAN>Person A made 50% *<B>gross*</B> returns on investable assets. =
Their=20
ending portfolio was $150,000. This does not include the $2K they spent=20
purchasing various trading systems nor commissions paid during the year =
to=20
generate these returns. A treats their investments like a hobby and =
spends money=20
freely to find “a better system.”</P>
<P class=3DIndented style=3D"mso-list: l0 level1 lfo1; tab-stops: list =
.5in">-<SPAN=20
style=3D"FONT: 7pt 'Times New =
Roman'"> =20
</SPAN>Person B made 50% *<B>net*</B> returns on investable assets. They =
spent=20
$2K in commissions; subscriptions to business and investing magazines,=20
newspapers and tools; investing books; investing seminars and the =
associated=20
costs to attend these seminars. B treats their investments like a =
business and=20
evaluates all tools and expenditures as to how they generate a return on =
investment.</P>
<P class=3DMsoNormal>(8) Taxable vs Tax Deferred Account/Before vs After =
Tax</P>
<P class=3DMsoNormal>-<SPAN=20
style=3D"FONT: 7pt 'Times New =
Roman'"> =20
</SPAN>Statement: I earned 50% last year.</P>
<P class=3DIndented style=3D"mso-list: l0 level1 lfo1; tab-stops: list =
.5in">-<SPAN=20
style=3D"FONT: 7pt 'Times New =
Roman'"> =20
</SPAN>Person A earned 50% in their tax deferred IRA.</P>
<DIV><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New Roman'; =
mso-fareast-font-family: 'Times New Roman'; mso-ansi-language: EN-US; =
mso-fareast-language: EN-US; mso-bidi-language: =
AR-SA">- =20
Person B earned 50% *<B>after taxes</B>* in their taxable =
account.</SPAN></DIV>
<DIV><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New Roman'; =
mso-fareast-font-family: 'Times New Roman'; mso-ansi-language: EN-US; =
mso-fareast-language: EN-US; mso-bidi-language: =
AR-SA"></SPAN> </DIV>
<DIV><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New Roman'; =
mso-fareast-font-family: 'Times New Roman'; mso-ansi-language: EN-US; =
mso-fareast-language: EN-US; mso-bidi-language: AR-SA">Conclusion:=20
Numbers alone don't tell you a darned thing.</SPAN></DIV>
<DIV><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New Roman'; =
mso-fareast-font-family: 'Times New Roman'; mso-ansi-language: EN-US; =
mso-fareast-language: EN-US; mso-bidi-language: =
AR-SA"></SPAN> </DIV>
<DIV><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New Roman'; =
mso-fareast-font-family: 'Times New Roman'; mso-ansi-language: EN-US; =
mso-fareast-language: EN-US; mso-bidi-language: =
AR-SA">--Katherine</SPAN></DIV>
<DIV> </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=3Ddcsquires1@cox.net href=3D"mailto:dcsquires1@cox.net">David =
Squires</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@lists.xmission.com</A>=
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Sunday, February 17, 2002 =
8:45=20
PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: AW: [CANSLIM] Lack =
of Buy=20
Candidates</DIV>
<DIV><BR></DIV>
<DIV><FONT face=3DArial size=3D2>
<DIV>>>Your comments about EPIQ as a "big winner" in the =
portfolio=20
remind me of comments I often hear from others when we have =
discussions about=20
the big winners in our portfolios. On one hand, it really bugs me =
to hear=20
people say "well, yeah, of course you had great returns, you had XXXX =
an=20
YYYY....you were just lucky." Excuse me? I found XXXX and YYYY using =
the same=20
methodical diligence I apply to all my buys. The difference is, these =
guys=20
never triggered sell rules like all the others. Last Fall, I listened =
to a=20
presentation by Kevin Marder, a hedge fund manager and a CANSLIM-style =
investor. He said the same thing that I've heard from other successful =
investors. "At the end of each year I give my accountant a list of my =
trades=20
for tax purposes. On that list are a bunch of trades with very small =
losses.=20
Also on that list are some really big gains that were responsible for =
most of=20
my returns for the year. This happens every year without=20
exception."<<</DIV>
<DIV> </DIV>
<DIV>Katherine,</DIV>
<DIV> </DIV>
<DIV>You are a true gem...my hat is off to you and eye open to =
everything you=20
write...from my experience....you indeed "get it". However, I'm not so =
sure=20
Tom should be cast in the light of Kevin Marder. What's the point of =
telling=20
everyone what you netted last year??......it's a totally unverifiable=20
assertion and only fodder for ones online ego. Spare me. It still =
amazes me=20
the proclaimed master of the CANSLIM list,...."routinely violates =
CANSLIM=20
rules" and everyone just sits there. I guess everyone's numb from a 2 =
year=20
bear raid.</DIV>
<DIV> </DIV>
<DIV>DSquires</DIV>
<DIV> </DIV></FONT></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=3Dkmalm@earthlink.net =
href=3D"mailto:kmalm@earthlink.net">Katherine=20
Malm</A> </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@lists.xmission.com</A>=
=20
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Sunday, February 17, =
2002 10:57=20
AM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: AW: [CANSLIM] =
Lack of Buy=20
Candidates</DIV>
<DIV><BR></DIV>
<DIV>Hi Tom,</DIV>
<DIV> </DIV>
<DIV>Your comments about EPIQ as a "big winner" in the portfolio =
remind me=20
of comments I often hear from others when we have discussions about =
the big=20
winners in our portfolios. On one hand, it really bugs me to =
hear=20
people say "well, yeah, of course you had great returns, you had =
XXXX an=20
YYYY....you were just lucky." Excuse me? I found XXXX and YYYY using =
the=20
same methodical diligence I apply to all my buys. The difference is, =
these=20
guys never triggered sell rules like all the others. Last Fall, I =
listened=20
to a presentation by Kevin Marder, a hedge fund manager and a =
CANSLIM-style=20
investor. He said the same thing that I've heard from other =
successful=20
investors. "At the end of each year I give my accountant a list of =
my trades=20
for tax purposes. On that list are a bunch of trades with very small =
losses.=20
Also on that list are some really big gains that were responsible =
for most=20
of my returns for the year. This happens every year without=20
exception."</DIV>
<DIV> </DIV>
<DIV>On the other hand, a comment such as "you were just lucky" =
makes me=20
smile and nod in agreement, because I define luck as "being prepared =
when=20
the opportunity arises and being willing to seize it." Yes, big =
winners are=20
about luck in that sense. Finally, one of my favorite quotes and one =
that=20
always stays in view at my desk:</DIV>
<DIV> </DIV>
<DIV>"Opportunities are usually disguised as hard work, so most =
people don't=20
recognize them." --Anne Landers</DIV>
<DIV> </DIV>
<DIV>Here's to "big winners" and your continued "good luck"!</DIV>
<DIV> </DIV>
<DIV>Cheers,</DIV>
<DIV>Katherine</DIV>
<BLOCKQUOTE=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=20
Worley</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A=20
title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
=20
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Saturday, February =
16, 2002=20
3:34 PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: AW: [CANSLIM] =
Lack of=20
Buy Candidates</DIV>
<DIV><BR></DIV>Your memory is pretty good, altho I consider buying =
small=20
caps as much<BR>closer to classic CANSLIM rules for "S" than IBD =
or WON=20
currently pushes.<BR><BR>I wasn't losing money during the roaring =
bulls,=20
just not making what I<BR>could. But that was not the fault of my=20
application of CANSLIM, it was a<BR>direct consequence of total =
neglect of=20
my portfolio due dedication and hours<BR>spent on my day job. But =
even=20
with total neglect, I still managed about 12%<BR>or so without =
trading, so=20
at least better than a money market.<BR><BR>You are correct also =
that EPIQ=20
was a major contributor to my profits in<BR>2001, and I expect it =
to=20
continue contributing in 2002. But I finished the<BR>year with =
every stock=20
I owned up for the year, and with minimal trading. I<BR>only =
bought two=20
new ones in 2001, the rest I had owned from prior years. So<BR>far =
in=20
2002, I have added 6 new ones, and sold one (merger announced).=20
Altho<BR>three of the new ones are presently down, I am still up a =
little=20
overall.<BR>And having fun.<BR><BR>Tom Worley<BR><A=20
=
href=3D"mailto:stkguru@netside.net">stkguru@netside.net</A><BR>AIM:=20
TexWorley<BR>----- Original Message -----<BR>From: "esetser" =
<<A=20
href=3D"mailto:esetser@covad.net">esetser@covad.net</A>><BR>To: =
<<A=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
><BR>Sent:=20
Saturday, February 16, 2002 11:01 AM<BR>Subject: Re: AW: [CANSLIM] =
Lack of=20
Buy Candidates<BR><BR><BR>Be careful here, Tom has his own special =
breed=20
of CANSLIM, and it seems<BR>that his returns have NOT been a good=20
indicator of average returns in the<BR>group. Unless I'm =
mistaken,=20
Tom was losing money or breaking even back in<BR>the roaring bull, =
so=20
maybe it was just his turn!!<BR><BR>Tom does at least the =
following=20
different from my approach (just from<BR>memory):<BR><BR>1 - =
Microcaps=20
only (below the minimum recommended by WON) (S?)<BR>2 - Buys in =
the base=20
before the breakout (Needs to because of 1)<BR>3 - Doesn't use =
Industry=20
Group Strength as a leader/laggard indicator (I)<BR>4 - Buys in =
all=20
markets (M)<BR><BR>>From my perspective, he violates the normal =
rules=20
for S, I, and M.<BR>However, Tom does admit to this, and doesn't =
even=20
generally post his<BR>selections due to these =
variations.<BR><BR>Given the=20
differences, I think it should be expected that Tom's =
performance<BR>over=20
a given year will vary from many of us. (And there is that =
one=20
stock<BR>that has appreciated several times his original =
investment that=20
is<BR>impacting the results too!)<BR><BR>One other note. =
From my=20
perspective, Tom's value to the group is his<BR>willingness to =
take the=20
time to review most anyone's suggestions and<BR>selections and =
give great=20
detail in his responses. His general approach<BR>may not =
follow=20
CANSLIM exactly, but his postings to the group do following<BR>WON =
quite=20
closely. He is our master educator on the technique, and =
gives=20
a<BR>lot of time and effort to the group.<BR><BR>FWIW, I ended up =
2001=20
with about a 13% loss and am down about 6% more this<BR>year so =
far. =20
Presently, I am only 25% invested with one position. I =
am<BR>not really responding on the group much, since I do not feel =
I have=20
the<BR>experience to short, and I am waiting for "M" to clear up =
before=20
new<BR>purchases.<BR><BR><BR><BR><BR>At 11:36 AM 2/16/02 +0100, =
you=20
wrote:<BR>>I think Tom bend only one rule --> stay out of =
the market=20
if there is a<BR>>downtrend in the overall =
market.<BR>><BR>>But=20
as I said, if you choose small caps and or IGs that are going up,=20
no<BR>>problem making money on the long side.<BR>>Just look =
on the=20
builders or on the gold stocks latley ...<BR>><BR>>BUT =
NEVER, NEVER=20
buy stocks when the market and the IG is down.<BR>>I have not =
seen one=20
example where a member of the group does not break =
down<BR>>then=20
(besides its a small cap) as well.<BR>><BR>>Some IGs are =
just=20
setting up a bull market for its members no matter what<BR>>the =
market=20
is doing.<BR>><BR>>> -----Urspr=FCngliche=20
Nachricht-----<BR>>> Von: Tom Worley=20
[SMTP:stkguru@netside.net]<BR>>> Gesendet am: Saturday, =
February 16,=20
2002 6:19 AM<BR>>> An: <A=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
<BR>>>=20
Betreff: Re: [CANSLIM] Lack of Buy =
Candidates<BR>>><BR>>>=20
While I routinely violate CANSLIM rules, nonetheless my entire =
process=20
is<BR>>heavily based in CANSLIM. And I netted 76% for the full =
year, so=20
yeah, I<BR>>made a net profit.<BR>>><BR>>> Tom=20
Worley<BR>>> <A=20
=
href=3D"mailto:stkguru@netside.net">stkguru@netside.net</A><BR>>> =
AIM:=20
TexWorley<BR>>> ----- Original Message=20
-----<BR>>> From: David =
Squires<BR>>> =20
To: <A=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
<BR>>> =20
Sent: Saturday, February 16, 2002 12:11 AM<BR>>> =
Subject: Re: [CANSLIM] Lack of Buy=20
Candidates<BR>>><BR>>><BR>>> haven't =
shorted=20
in years, fully invested year round, made lots of $$<BR>>last =
year, and=20
profitable so far this year (including my fully=20
margined<BR>>account).<BR>>><BR>>> =20
>>fully invested year round, made lots of $$ last=20
year<<<BR>>><BR>>> You were fully =
invested=20
last year long and made a net profit? You<BR>>better call =
George Soros!=20
BTW, is this even remotely =
CANSLIM.<BR>>><BR>>> =20
DSquires<BR>>> ----- Original =
Message=20
-----<BR>>> From: Tom=20
Worley<BR>>> To: <A=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
<BR>>> =20
Sent: Friday, February 15, 2002 10:47=20
PM<BR>>> Subject: Re: [CANSLIM] Lack =
of Buy=20
=
Candidates<BR>>><BR>>><BR>>> =20
haven't shorted in years, fully invested year round, made lots of=20
$$<BR>>last year, and profitable so far this year (including my =
fully=20
=
margined<BR>>account).<BR>>><BR>>> =
=20
Tom Worley<BR>>> <A=20
=
href=3D"mailto:stkguru@netside.net">stkguru@netside.net</A><BR>>>&n=
bsp; =20
AIM: TexWorley<BR>>> =
- -----=20
Original Message =
- -----<BR>>> =20
From: Dan Forant<BR>>> =
To: <A=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
<BR>>> =20
Sent: Friday, February 15, 2002 8:03=20
PM<BR>>> Subject: Re: =
[CANSLIM]=20
Lack of Buy=20
=
Candidates<BR>>><BR>>><BR>>> &nb=
sp; =20
Of course it's absurd. If anyone's been in the market for the=20
past<BR>>year and hasn't shorted and made $$, they are either =
very=20
lucky or far<BR>>better than the average investor. There was no =
shortage of stocks to short<BR>>in TC2000 and=20
=
candlesticks.<BR>>><BR>>> =
=20
L8ter<BR>>> =20
DanF<BR>>> =
- -----=20
Original Message=20
-----<BR>>> =
From:=20
Ian<BR>>> =
To: <A=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
<BR>>> =20
Sent: Friday, February 15, 2002 11:13=20
AM<BR>>> =
Subject:=20
Re: [CANSLIM] Lack of Buy=20
=
Candidates<BR>>><BR>>><BR>>> &nb=
sp; =20
I find it almost absurd that WON discourages shorting. Almost=20
all<BR>>of WON's ideas appear to have originated with Jesse =
Livermore,=20
who made the<BR>>bulk of his money on the short side. The rules =
for=20
selling a big CANSLIM<BR>>winner make for perfect short =
candidates.=20
Although selling a failed<BR>>breakout as it returns into its =
base is=20
NOT typically a good short<BR>>candidate.=20
=
JMHO.<BR>>><BR>>> &n=
bsp;=20
=
Ian<BR>>><BR>>><BR>>><BR>>> &nbs=
p; =20
----- Original Message=20
=
- -----<BR>>> &n=
bsp;=20
From: Rob=20
=
Miller<BR>>> &=
nbsp;=20
To: <A=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
<BR>>> =
Sent: Friday, February 15, 2002 6:40=20
=
AM<BR>>>  =
;=20
Subject: [CANSLIM] Lack of Buy=20
=
Candidates<BR>>><BR>>><BR>>> &nb=
sp; =20
Even if we have a FTD from here, I see few stocks worth =
buying.<BR>>=20
However, my short list is overflowing. The only moderately=20
attractive<BR>>stocks I see on the long side are those already =
in an=20
uptrend that are<BR>>riding their lower=20
=
channel.<BR>>><BR>>>  =
; =20
Is shorting considered off limits for this list? I know=20
that<BR>>WON discourages it, but he also claimed to make good =
money=20
from shorts in<BR>>HTMMIS. As I understand it, he =
discourages it=20
as a medium for the masses,<BR>>nor necessarily for=20
=
everyone.<BR>>><BR>>> &nbs=
p; =20
Rob<BR>>> << Datei: ATT00014.htm=20
>><BR><BR><BR><BR><BR>-<BR>-To subscribe/unsubscribe, email =
"<A=20
=
href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>-In=
=20
the email body, write "subscribe canslim" or<BR>-"unsubscribe=20
canslim". Do not use quotes in your=20
email.<BR></BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE></BODY></HTML>
- ------=_NextPart_000_0053_01C1B7FA.84C69B80--
- -
- -To subscribe/unsubscribe, email "majordomo@xmission.com"
- -In the email body, write "subscribe canslim" or
- -"unsubscribe canslim". Do not use quotes in your email.
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