Go to Jeff Salisbury LWGate Home Page.From: "Fred Richards" <adrich@gte.net>
Subject: RE: AW: [CANSLIM] Lack of Buy Candidates
Date: Mon, 18 Feb 2002 09:13:41 -0600
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Katherine,
Let me throw another oar in the water. Percentage returns are totally
meaningless for the simple reason that the larger the portfolio, the more
difficult it is to make higher percentage returns. It is the mass and
inertia theory coming to bear.
If you have a portfolio that has 10 stocks in it with an average position
size of say $10,000 - $20,000, it is easy to enter and exit your positions.
However, if you have a portfolio that is significantly larger, you have a
totally different ballgame to play. It might take you weeks, maybe months,
to purchase a position or to exit. During that time, the market is
fluctuating and depending upon the trend, it may be in your favor or not.
In the past, it has taken me as long as six months to build a position in a
company that had average volume of less than 125,000 shares per day without
disrupting the market. Of course, today, the fund managers are not very
adept at buying or selling without disrupting the market and as a result, we
see dumping on a grand scale. Unfortunately, today's market conditions are
a natural result of a short-term mentality.
I think that the only real measure is whether depending upon your assessment
of the risk/reward criteria an investor is comfortable with, did that
investor meet, exceed or not exceed, the goals the investor set for their
own performance. Nothing else . . . e.g., comparison to another's
performance, is really important.
For example, some people don't short and go to cash when they believe the
market is going down. Preservation of capital is more important than a
possible gain. Others are willing to take totally different risks.
In this discussion, I doubt if there is any correct answer for all. Just a
correct answer for the individual investor.
FFR
-----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Katherine Malm
Sent: Monday, February 18, 2002 8:25 AM
To: canslim@lists.xmission.com
Subject: Re: AW: [CANSLIM] Lack of Buy Candidates
Hi Tom,
Well...this is exactly the reason that I believe posting returns is so
dangerous. You should never feel the need to defend the numbers you post,
it's your business what they are, how you calculate them, whether or not you
should have to prove them with statements, etc. It's also your business
whether you choose to share your returns with the group. I also *understand*
David's point of view, though I can't say I completely *agree* with it. Just
the same, I believe it is his business whether or not he chooses to speak
his mind.
I hope what people will take away from all this is that one person's gain
on the list is not at the expense of another's. While technically this is
true in the marketplace, I think most of us would agree that we are tiny
cogs in the great wheel of the market and that competing against ourselves
over time is far more important than competing against each other. It seems
the purpose of the list is to help each other become *better* at what we do
and the thoughtful and enlightening posts by each and every person
contributes to this goal.
Katherine
----- Original Message -----
From: Tom Worley
To: canslim@lists.xmission.com
Sent: Monday, February 18, 2002 6:05 AM
Subject: Re: AW: [CANSLIM] Lack of Buy Candidates
Thanks for the defense, Katherine,
My claim of 76% return last year is a simple calculation of the net gain
of the total portfolio divided by the value of the portfolio at the start of
the year. If David chooses to suggest I am lying, I am willing to post my
year end statement showing the net gain for the year (with the acct # and SS
# concealed). I will, of course, also graciously accept his public apology.
My only "self controlled" account was my IRA, so there was no tax issue.
My expenses for DGO and other net services was not considered in the
calculation.
I was forced to liquidate my shares in my Employee Option Plan in late
summer, and converted the Euros to US $ and brought them home (US residents
were not permitted to swap into shares of the acquiring company, Allianz, a
major insurer). Turned out to be a good thing as Allianz shares got sliced
in half by September 11 attacks. I did not re-invest this money as I planned
to use it for major renovations on my house. Since that plan has now been
postponed, I fully invested this money on margin a few weeks ago. I did not
consider it as "investable" money during 2001.
I worked as an active broker, without a single customer complaint, for
eight years handling well over 200 clients. The entire relationship, usually
conducted over the phone without ever having met the client, was totally
based on trust. I learned over 4 decades ago it was easier to tell the truth
and not waste energy trying to keep the story "straight". My personal
accounts were always open to my clients to review if they wished. In 8
years, not a single one ever requested this. I know of no other stock broker
that ever made a similar offer to his clients. Of course, they were paying
me a commission, unlike David.
Because I have worked with WON's staff and products and CANSLIM for so
many years, I understand the rules pretty well, and recognize when I am
consciously violating them. It is for this reason that I do not post my
stock picks, other than as a disclosure when they make the WWW list. What I
do in my personal investing works for me, and I am comfortable with the
risks I take. But I have repeatedly said that most investors should stay
away from both small/micro cap stocks, as well as low priced. That I do both
is a testament to my level of risk taking, as well as understanding of these
type investments. It is also why I put in 4 hours or so a day on the net, in
addition to my 11-12 hour work day.
Best regards to you and please keep up all the quality posts you
generously give us,
Tom Worley
stkguru@netside.net
AIM: TexWorley
----- Original Message -----
From: Katherine Malm
To: canslim@lists.xmission.com
Sent: Sunday, February 17, 2002 10:31 PM
Subject: Re: AW: [CANSLIM] Lack of Buy Candidates
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.
- Person A makes 50% on *invested* monies. Lets say A invests $10K
and earns 50%. Total ending value = $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 = $109,500. Total compounded
returns for the year = 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 = $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 = 95%.
- 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 = 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 = $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) =
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) = 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 -----
From: David Squires
To: canslim@lists.xmission.com
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 -----
From: Katherine Malm
To: canslim@lists.xmission.com
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 -----
From: Tom Worley
To: canslim@lists.xmission.com
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.
>
>> -----Ursprüngliche 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><SPAN class=3D420070215-18022002><FONT face=3DArial color=3D#0000ff =
size=3D2>Katherine,</FONT></SPAN></DIV>
<DIV><SPAN class=3D420070215-18022002><FONT face=3DArial color=3D#0000ff =
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D420070215-18022002><FONT face=3DArial color=3D#0000ff =
size=3D2>Let me=20
throw another oar in the water. Percentage returns are totally =
meaningless=20
for the simple reason that the larger the portfolio, the more difficult =
it is to=20
make higher percentage returns. It is the mass and inertia theory =
coming=20
to bear.</FONT></SPAN></DIV>
<DIV><SPAN class=3D420070215-18022002><FONT face=3DArial color=3D#0000ff =
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D420070215-18022002><FONT face=3DArial color=3D#0000ff =
size=3D2>If you=20
have a portfolio that has 10 stocks in it with an average position size =
of say=20
$10,000 - $20,000, it is easy to enter and exit your positions. =
However,=20
if you have a portfolio that is significantly larger, you have a totally =
different ballgame to play. It might take you weeks, maybe months, =
to=20
purchase a position or to exit. During that time, the market is =
fluctuating and=20
depending upon the trend, it may be in your favor or not. In the =
past, it=20
has taken me as long as six months to build a position in a company that =
had=20
average volume of less than 125,000 shares per day without disrupting =
the=20
market. Of course, today, the fund managers are not very adept at =
buying=20
or selling without disrupting the market and as a result, we =
see=20
dumping on a grand scale. Unfortunately, today's market conditions =
are a=20
natural result of a short-term mentality.</FONT></SPAN></DIV>
<DIV><SPAN class=3D420070215-18022002><FONT face=3DArial color=3D#0000ff =
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D420070215-18022002><FONT face=3DArial color=3D#0000ff =
size=3D2>I=20
think that the only real measure is whether depending upon your =
assessment of=20
the risk/reward criteria an investor is comfortable with, did that =
investor=20
meet, exceed or not exceed, the goals the investor set for their own=20
performance. Nothing else . . . e.g., comparison to another's =
performance,=20
is really important.</FONT></SPAN></DIV>
<DIV><SPAN class=3D420070215-18022002><FONT face=3DArial color=3D#0000ff =
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D420070215-18022002><FONT face=3DArial color=3D#0000ff =
size=3D2>For=20
example, some people don't short and go to cash when they believe the =
market is=20
going down. Preservation of capital is more important than a possible=20
gain. Others are willing to take totally different=20
risks.</FONT></SPAN></DIV>
<DIV><SPAN class=3D420070215-18022002><FONT face=3DArial color=3D#0000ff =
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D420070215-18022002><FONT face=3DArial color=3D#0000ff =
size=3D2>In=20
this discussion, I doubt if there is any correct answer for all. Just a =
correct=20
answer for the individual investor.</FONT></SPAN></DIV>
<DIV><SPAN class=3D420070215-18022002><FONT face=3DArial color=3D#0000ff =
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D420070215-18022002><FONT face=3DArial color=3D#0000ff =
size=3D2>FFR</FONT> </SPAN></DIV>
<BLOCKQUOTE dir=3Dltr style=3D"MARGIN-RIGHT: 0px">
<DIV class=3DOutlookMessageHeader dir=3Dltr align=3Dleft><FONT =
face=3DTahoma=20
size=3D2>-----Original Message-----<BR><B>From:</B>=20
owner-canslim@lists.xmission.com=20
[mailto:owner-canslim@lists.xmission.com]<B>On Behalf Of </B>Katherine =
Malm<BR><B>Sent:</B> Monday, February 18, 2002 8:25 AM<BR><B>To:</B>=20
canslim@lists.xmission.com<BR><B>Subject:</B> Re: AW: [CANSLIM] Lack =
of Buy=20
Candidates<BR><BR></FONT></DIV>
<DIV>Hi Tom,</DIV>
<DIV> </DIV>
<DIV>Well...this is exactly the reason that I believe posting returns =
is so=20
dangerous. You should never feel the need to defend the numbers you =
post, it's=20
your business what they are, how you calculate them, whether or not =
you should=20
have to prove them with statements, etc. It's also your business =
whether you=20
choose to share your returns with the group. I also *understand* =
David's point=20
of view, though I can't say I completely *agree* with it. Just the =
same, I=20
believe it is his business whether or not he chooses to speak his =
mind.</DIV>
<DIV> </DIV>
<DIV>I hope what people will take away from all this is that one =
person's gain=20
on the list is not at the expense of another's. While technically this =
is true=20
in the marketplace, I think most of us would agree that we are tiny =
cogs in=20
the great wheel of the market and that competing against ourselves =
over time=20
is far more important than competing against each other. It seems the =
purpose=20
of the list is to help each other become *better* at what we do and =
the=20
thoughtful and enlightening posts by each and every person contributes =
to this=20
goal.</DIV>
<DIV> </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=20
Worley</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> Monday, February 18, =
2002 6:05=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><FONT face=3DArial>Thanks for the defense, =
Katherine,</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>My claim of 76% return last year is a simple =
calculation of the net gain of the total portfolio divided by the =
value of=20
the portfolio at the start of the year. If David chooses to suggest =
I am=20
lying, I am willing to post my year end statement showing the net =
gain for=20
the year (with the acct # and SS # concealed). I will, of course, =
also=20
graciously accept his public apology.</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>My only "self controlled" account was my =
IRA, so there=20
was no tax issue. My expenses for DGO and other net services was not =
considered in the calculation.</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>I was forced to liquidate my shares in my =
Employee=20
Option Plan in late summer, and converted the Euros to US $ and =
brought them=20
home (US residents were not permitted to swap into shares of the =
acquiring=20
company, Allianz, a major insurer). Turned out to be a good thing as =
Allianz=20
shares got sliced in half by September 11 attacks. I did not =
re-invest this=20
money as I planned to use it for major renovations on my house. =
Since that=20
plan has now been postponed, I fully invested this money on margin a =
few=20
weeks ago. I did not consider it as "investable" money during=20
2001.</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>I worked as an active broker, without a =
single=20
customer complaint, for eight years handling well over 200 clients. =
The=20
entire relationship, usually conducted over the phone without ever =
having=20
met the client, was totally based on trust. I learned over 4 decades =
ago it=20
was easier to tell the truth and not waste energy trying to keep the =
story=20
"straight". My personal accounts were always open to my =
clients to=20
review if they wished. In 8 years, not a single one ever requested =
this. I=20
know of no other stock broker that ever made a similar offer to his =
clients.=20
Of course, they were paying me a commission, unlike =
David.</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>Because I have worked with WON's staff and =
products=20
and CANSLIM for so many years, I understand the rules pretty well, =
and=20
recognize when I am consciously violating them. It is for this =
reason that I=20
do not post my stock picks, other than as a disclosure when they =
make the=20
WWW list. What I do in my personal investing works for me, and I am=20
comfortable with the risks I take. But I have repeatedly said that =
most=20
investors should stay away from both small/micro cap stocks, as well =
as low=20
priced. That I do both is a testament to my level of risk taking, as =
well as=20
understanding of these type investments. It is also why I put in 4 =
hours or=20
so a day on the net, in addition to my 11-12 hour work =
day.</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>Best regards to you and please keep up all =
the quality=20
posts you generously give us,</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV>Tom Worley<BR><A=20
href=3D"mailto:stkguru@netside.net">stkguru@netside.net</A><BR>AIM:=20
TexWorley</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=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> Sunday, February 17, =
2002 10:31=20
PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: AW: [CANSLIM] =
Lack of=20
Buy Candidates</DIV>
<DIV><BR></DIV>
<DIV>Hi David,</DIV>
<DIV> </DIV>
<DIV>Thanks for the kind words and I'd like to speak up in Tom's =
defense.=20
He is square and straightforward about what he does at all times. =
He=20
learned from WON early in his career and he has learned to mold =
CANSLIM to=20
his personal preferences. I can't say that I agree with everything =
Tom=20
does only in the sense that it is not "right for me." But that is =
far=20
different than judging whether or not it is successful and/or =
"right for=20
him."</DIV>
<DIV> </DIV>
<DIV>With respect to telling returns, I think this is a *very* =
personal=20
issue. I, for example, look upon returns and absolutely *anything* =
to do=20
with what positions I am currently holding, what stocks I am =
looking at,=20
what % winners vs. losers, etc. as extremely personal. I put it =
right up=20
there with a question like "what's your salary" or "what's your =
net=20
worth." I was recently hammered by several folks when I made a=20
presentation in Dallas and would not reveal such things. I figure =
it's my=20
business and mine alone. There's absolutely no way to win when =
such things=20
are revealed. Either people believe that you are boasting, not =
telling the=20
truth, that your earnings are paltry by comparison to their own, =
etc. etc.=20
On the other hand, if someone reveals their returns, I figure =
that's their=20
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=20
more important at the end of the day to be able to ask =
myself "did I=20
do everything possible to earn the best returns that I am able." =
To me, if=20
I can answer "yes" to that question, then I have had a successful =
day. I=20
applaud Tom's returns, but I applaud his willingness to admit that =
his=20
returns in '99 would have been more substantial if he'd focused on =
his=20
portfolio with the same intensity that he did in '01. *That's* the =
message=20
I take away from his statement.</DIV>
<DIV> </DIV>
<DIV>--Katherine</DIV>
<DIV> </DIV>
<DIV>While we're on the subject of returns, here's something that =
I wrote=20
during a discussion over this very issue:</DIV>
<P class=3DMsoNormal><STRONG>Returns=85What Does That=20
Mean?<o:p></o:p></STRONG></P>
<P class=3DMsoNormal>I never make assumptions about the numbers =
people give=20
when they specify returns. Here are some examples as to why. For =
all=20
examples I'll use a simple total portfolio number of $100K at the=20
beginning of the year. All percentages and dollar amounts are used =
only=20
for the purpose of 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=20
and earns 50%. Total ending value =3D $15K. But what about the =
$90K that=20
wasn't invested? Let's say it made 5% in bonds and/or cash. That =
means=20
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=20
doesn't make the same statement as "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=20
and/or cash. Say it earns 5%. Ending value =3D $52,500. The =
remaining is=20
invested and earns enough so that the total portfolio earns 50%. =
That=20
means the ending portfolio is $150,000. Invested monies accounted =
for=20
$97,500 of this ending value. This means that B turned $50K into =
$97.5K by=20
the end of the year through active investing. Total returns on =
*invested*=20
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=20
how much of your investable dollars you are willing to risk. Your =
ability=20
to consistently earn a return on invested dollars will allow =
you to=20
increase the percentage of investable dollars. Don't assume that =
every=20
person who tells you they earned 50% is able to do this =
consistently. And=20
certainly don't assume that all of their investable dollars earned =
50%.=20
Also keep in mind that there are actually people who would rather=20
understate their returns than overstate 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=20
portfolio -50%. Person A also margined 100% of their account to =
generate=20
these returns. The average beta for the portfolio was 3 times the =
market=20
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=20
did not margin and the average beta of the portfolio was 1.5 times =
the=20
market 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=20
least 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=20
that gain. On January 15<SUP>th</SUP> of the following year, the =
market=20
dive bombed 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=20
in 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=20
weeks to several months. Until you sell the position (monetize =
it), the=20
gains are fairy dust. The bank might be willing to lend you money =
against=20
the value of your assets, but these dollars are not =93real=94 =
until they are=20
in your pocket. If you have any doubts, go ask Barry Ebbers of =
Worldcom=20
why he had to sell stock to 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=20
is (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=20
years. 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=20
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=20
weeks. They have annualized this as 12.5% * (10days/250days) =3D =
50%.</P>
<P class=3DIndented=20
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=20
have an annualized return on this investment of approximately 50% =
*=20
(40days/250days) =3D 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=20
only 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.=20
They 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=20
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.=20
Their ending portfolio was $150,000. This does not include the $2K =
they=20
spent purchasing various trading systems nor commissions paid =
during the=20
year to generate these returns. A treats their investments like a =
hobby=20
and spends money freely to find =93a better system.=94</P>
<P class=3DIndented=20
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=20
spent $2K in commissions; subscriptions to business and investing=20
magazines, newspapers and tools; investing books; investing =
seminars and=20
the associated costs to attend these seminars. B treats their =
investments=20
like a business and evaluates all tools and expenditures as to how =
they=20
generate a return on investment.</P>
<P class=3DMsoNormal>(8) Taxable vs Tax Deferred Account/Before vs =
After=20
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=20
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=20
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=20
Squires</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> Sunday, February =
17, 2002=20
8:45 PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: AW: =
[CANSLIM] Lack of=20
Buy 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=20
about the big winners in our portfolios. On one hand, it=20
really bugs me to hear people say "well, yeah, of course =
you had=20
great returns, you had XXXX an YYYY....you were just lucky." =
Excuse me?=20
I found XXXX and YYYY using the same methodical diligence I =
apply to all=20
my buys. The difference is, these guys never triggered sell =
rules like=20
all the others. Last Fall, I listened to a presentation by Kevin =
Marder,=20
a hedge fund manager and a CANSLIM-style investor. He said the =
same=20
thing that I've heard from other successful investors. "At the =
end of=20
each year I give my accountant a list of my trades for tax =
purposes. On=20
that list are a bunch of trades with very small losses. Also on =
that=20
list are some really big gains that were responsible for most of =
my=20
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=20
everything you write...from my experience....you indeed "get =
it".=20
However, I'm not so sure Tom should be cast in the light of =
Kevin=20
Marder. What's the point of telling everyone what you netted =
last=20
year??......it's a totally unverifiable assertion and only =
fodder for=20
ones online ego. Spare me. It still amazes me the proclaimed =
master of=20
the CANSLIM list,...."routinely violates CANSLIM rules" and =
everyone=20
just sits there. I guess everyone's numb from a 2 year 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=20
href=3D"mailto:kmalm@earthlink.net">Katherine Malm</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> Sunday, February =
17, 2002=20
10:57 AM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: AW: =
[CANSLIM] Lack=20
of Buy Candidates</DIV>
<DIV><BR></DIV>
<DIV>Hi Tom,</DIV>
<DIV> </DIV>
<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=20
discussions about the big winners in our portfolios. On one =
hand, it=20
really bugs me to hear people say "well, yeah, of course =
you had=20
great returns, you had XXXX an YYYY....you were just lucky." =
Excuse=20
me? I found XXXX and YYYY using the same methodical diligence =
I apply=20
to all my buys. The difference is, these guys never triggered =
sell=20
rules like all the others. Last Fall, I listened to a =
presentation by=20
Kevin Marder, a hedge fund manager and a CANSLIM-style =
investor. He=20
said the same thing that I've heard from other successful =
investors.=20
"At the end of each year I give my accountant a list of my =
trades for=20
tax purposes. On that list are a bunch of trades with very =
small=20
losses. Also on that list are some really big gains that were=20
responsible for most of my returns for the year. This happens =
every=20
year without exception."</DIV>
<DIV> </DIV>
<DIV>On the other hand, a comment such as "you were just =
lucky" makes=20
me smile and nod in agreement, because I define luck as "being =
prepared when the opportunity arises and being willing to =
seize it."=20
Yes, big winners are about luck in that sense. Finally, one of =
my=20
favorite quotes and one that always stays in view at my =
desk:</DIV>
<DIV> </DIV>
<DIV>"Opportunities are usually disguised as hard work, so =
most people=20
don't 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,=20
2002 3:34 PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: AW: =
[CANSLIM] Lack=20
of Buy Candidates</DIV>
<DIV><BR></DIV>Your memory is pretty good, altho I consider =
buying=20
small caps as much<BR>closer to classic CANSLIM rules for =
"S" than=20
IBD or WON currently pushes.<BR><BR>I wasn't losing money =
during the=20
roaring bulls, just not making what I<BR>could. But that was =
not the=20
fault of my application of CANSLIM, it was a<BR>direct =
consequence=20
of total neglect of my portfolio due dedication and =
hours<BR>spent=20
on my day job. But even with total neglect, I still managed =
about=20
12%<BR>or so without trading, so at least better than a =
money=20
market.<BR><BR>You are correct also that EPIQ was a major=20
contributor to my profits in<BR>2001, and I expect it to =
continue=20
contributing in 2002. But I finished the<BR>year with every =
stock I=20
owned up for the year, and with minimal trading. I<BR>only =
bought=20
two new ones in 2001, the rest I had owned from prior years. =
So<BR>far in 2002, I have added 6 new ones, and sold one =
(merger=20
announced). Altho<BR>three of the new ones are presently =
down, I am=20
still up a little overall.<BR>And having fun.<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 -----<BR>From: "esetser" =
<<A=20
=
href=3D"mailto:esetser@covad.net">esetser@covad.net</A>><BR>To:=20
<<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]=20
Lack of Buy Candidates<BR><BR><BR>Be careful here, Tom has =
his own=20
special breed of CANSLIM, and it seems<BR>that his returns =
have NOT=20
been a good indicator of average returns in =
the<BR>group. =20
Unless I'm mistaken, Tom was losing money or breaking even =
back=20
in<BR>the roaring bull, so maybe it was just his =
turn!!<BR><BR>Tom=20
does at least the following different from my approach (just =
from<BR>memory):<BR><BR>1 - Microcaps only (below the =
minimum=20
recommended by WON) (S?)<BR>2 - Buys in the base before the =
breakout=20
(Needs to because of 1)<BR>3 - Doesn't use Industry Group =
Strength=20
as a leader/laggard indicator (I)<BR>4 - Buys in all markets =
(M)<BR><BR>>From my perspective, he violates the normal =
rules for=20
S, I, and M.<BR>However, Tom does admit to this, and doesn't =
even=20
generally post his<BR>selections due to these=20
variations.<BR><BR>Given the differences, I think it should =
be=20
expected that Tom's performance<BR>over a given year will =
vary from=20
many of us. (And there is that one stock<BR>that has=20
appreciated several times his original investment that=20
is<BR>impacting the results too!)<BR><BR>One other =
note. =20
>From my perspective, Tom's value to the group is=20
his<BR>willingness to take the time to review most anyone's=20
suggestions and<BR>selections and give great detail in his=20
responses. His general approach<BR>may not follow =
CANSLIM=20
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=20
2001 with about a 13% loss and am down about 6% more =
this<BR>year so=20
far. Presently, I am only 25% invested with one=20
position. I am<BR>not really responding on the =
group=20
much, since I do not feel I have the<BR>experience to short, =
and I=20
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=20
market if there is a<BR>>downtrend in the overall=20
market.<BR>><BR>>But as I said, if you choose small =
caps and=20
or IGs that are going up, no<BR>>problem making money on =
the long=20
side.<BR>>Just look on the builders or on the gold stocks =
latley=20
...<BR>><BR>>BUT NEVER, NEVER buy stocks when the =
market and=20
the IG is down.<BR>>I have not seen one example where a =
member of=20
the group does not break down<BR>>then (besides its a =
small cap)=20
as well.<BR>><BR>>Some IGs are just setting up a bull =
market=20
for its members no matter what<BR>>the market is=20
doing.<BR>><BR>>> -----Urspr=FCngliche=20
Nachricht-----<BR>>> Von: Tom Worley=20
[SMTP:stkguru@netside.net]<BR>>> Gesendet am: =
Saturday,=20
February 16, 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=20
Candidates<BR>>><BR>>> While I routinely violate =
CANSLIM=20
rules, nonetheless my entire process is<BR>>heavily based =
in=20
CANSLIM. And I netted 76% for the full year, so yeah, =
I<BR>>made=20
a net profit.<BR>>><BR>>> Tom Worley<BR>>> =
<A=20
=
href=3D"mailto:stkguru@netside.net">stkguru@netside.net</A><BR>>>=20
AIM: TexWorley<BR>>> ----- Original =
Message=20
-----<BR>>> From: David=20
Squires<BR>>> 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>>> =20
Subject: Re: [CANSLIM] Lack of Buy=20
Candidates<BR>>><BR>>><BR>>> =
haven't=20
shorted in years, fully invested year round, made lots of=20
$$<BR>>last year, and profitable so far this year =
(including my=20
fully =
margined<BR>>account).<BR>>><BR>>> =20
>>fully invested year round, made lots of $$ last=20
year<<<BR>>><BR>>> You were =
fully=20
invested last year long and made a net profit? =
You<BR>>better=20
call George Soros! BTW, is this even remotely=20
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=20
of Buy=20
=
Candidates<BR>>><BR>>><BR>>> =20
haven't shorted in years, fully invested year round, made =
lots of=20
$$<BR>>last year, and profitable so far this year =
(including my=20
fully=20
=
margined<BR>>account).<BR>>><BR>>> =
=20
Tom Worley<BR>>> <A=20
=
href=3D"mailto:stkguru@netside.net">stkguru@netside.net</A><BR>>>&n=
bsp; =20
AIM: =
TexWorley<BR>>> -----=20
Original Message=20
-----<BR>>> From: =
Dan=20
Forant<BR>>> To: =
<A=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
<BR>>> =20
Sent: Friday, February 15, 2002 8:03=20
PM<BR>>> Subject: =
Re:=20
[CANSLIM] Lack of Buy=20
=
Candidates<BR>>><BR>>><BR>>> &nb=
sp; =20
Of course it's absurd. If anyone's been in the market for =
the=20
past<BR>>year and hasn't shorted and made $$, they are =
either=20
very lucky or far<BR>>better than the average investor. =
There was=20
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>>> =20
From:=20
=
Ian<BR>>> To:=20
<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>>> =20
Subject: 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=20
Livermore, who made the<BR>>bulk of his money on the =
short side.=20
The rules for selling a big CANSLIM<BR>>winner make for =
perfect=20
short candidates. Although selling a failed<BR>>breakout =
as it=20
returns into its base is NOT typically a good=20
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=20
buying.<BR>> However, my short list is overflowing. =
The=20
only moderately attractive<BR>>stocks I see on the long =
side are=20
those already in an 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=20
money from shorts in<BR>>HTMMIS. As I understand =
it, he=20
discourages it as a medium for the masses,<BR>>nor =
necessarily=20
for=20
=
everyone.<BR>>><BR>>> &nbs=
p; =20
Rob<BR>>> << Datei: ATT00014.htm=20
>><BR><BR><BR><BR><BR>-<BR>-To subscribe/unsubscribe, =
email=20
"<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></BLOCKQUOTE></BLOCKQUOT=
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