Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: AW: [CANSLIM] Lack of Buy Candidates
Date: Mon, 18 Feb 2002 09:34:54 -0600
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Fred,
An excellent point that you make about size of the portfolio. It's the =
very reason that institutional investors cannot follow CANSLIM =
principles themselves--they *are* the institution that sets the lead in =
price/volume action and it's the reason why David Ryan crashed and =
burned--his portfolio simply grew too large to trade the CANSLIM style.
And it sounds like we are in agreement that comparing your returns to =
others is not very meaningful---these issues of =
risk/reward/style/goals/etc are very personal--and it's one of the many =
reasons why I don't reveal returns or statistics on my portfolio. Your =
point about setting goals is also extremely important and I'm glad to =
hear someone bring it up on the list. I agree that the first step to =
successful investing is setting goals.
Thanks for your comments,
Katherine
----- Original Message -----=20
From: Fred Richards=20
To: canslim@lists.xmission.com=20
Sent: Monday, February 18, 2002 9:13 AM
Subject: RE: AW: [CANSLIM] Lack of Buy Candidates
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=20
-----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 -----=20
From: Tom Worley=20
To: canslim@lists.xmission.com=20
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 -----=20
From: Katherine Malm=20
To: canslim@lists.xmission.com=20
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.=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>Fred,</DIV>
<DIV> </DIV>
<DIV>An excellent point that you make about size of the portfolio. It's =
the very=20
reason that institutional investors cannot follow CANSLIM principles=20
themselves--they *are* the institution that sets the lead in =
price/volume action=20
and it's the reason why David Ryan crashed and burned--his portfolio =
simply grew=20
too large to trade the CANSLIM style.</DIV>
<DIV> </DIV>
<DIV>And it sounds like we are in agreement that comparing your returns =
to=20
others is not very meaningful---these issues of =
risk/reward/style/goals/etc are=20
very personal--and it's one of the many reasons why I don't reveal =
returns or=20
statistics on my portfolio. Your point about setting goals is also =
extremely=20
important and I'm glad to hear someone bring it up on the list. I agree =
that the=20
first step to successful investing is setting goals.</DIV>
<DIV> </DIV>
<DIV>Thanks for your comments,</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=3Dadrich@gte.net href=3D"mailto:adrich@gte.net">Fred =
Richards</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>=
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Monday, February 18, 2002 =
9:13=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><SPAN class=3D420070215-18022002><FONT face=3DArial =
color=3D#0000ff=20
size=3D2>Katherine,</FONT></SPAN></DIV>
<DIV><SPAN class=3D420070215-18022002><FONT face=3DArial =
color=3D#0000ff=20
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D420070215-18022002><FONT face=3DArial =
color=3D#0000ff size=3D2>Let=20
me throw another oar in the water. Percentage returns are =
totally=20
meaningless for the simple reason that the larger the portfolio, the =
more=20
difficult it is to make higher percentage returns. It is the =
mass and=20
inertia theory coming to bear.</FONT></SPAN></DIV>
<DIV><SPAN class=3D420070215-18022002><FONT face=3DArial =
color=3D#0000ff=20
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D420070215-18022002><FONT face=3DArial =
color=3D#0000ff size=3D2>If=20
you have a portfolio that has 10 stocks in it with an average position =
size of=20
say $10,000 - $20,000, it is easy to enter and exit your =
positions. =20
However, if you have a portfolio that is significantly larger, you =
have a=20
totally different ballgame to play. It might take you weeks, =
maybe=20
months, to purchase a position or to exit. During that time, the =
market is=20
fluctuating and depending upon the trend, it may be in your favor or=20
not. In the past, it has taken me as long as six months to build =
a=20
position in a company that had average volume of less than 125,000 =
shares per=20
day without disrupting the market. Of course, today, the fund =
managers=20
are not very adept at buying or selling without disrupting the=20
market and as a result, we see dumping on a grand scale. =20
Unfortunately, today's market conditions are a natural result of a =
short-term=20
mentality.</FONT></SPAN></DIV>
<DIV><SPAN class=3D420070215-18022002><FONT face=3DArial =
color=3D#0000ff=20
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=20
performance, is really important.</FONT></SPAN></DIV>
<DIV><SPAN class=3D420070215-18022002><FONT face=3DArial =
color=3D#0000ff=20
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=20
is 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=20
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=20
correct answer for the individual investor.</FONT></SPAN></DIV>
<DIV><SPAN class=3D420070215-18022002><FONT face=3DArial =
color=3D#0000ff=20
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D420070215-18022002><FONT face=3DArial =
color=3D#0000ff=20
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=20
Malm<BR><B>Sent:</B> Monday, February 18, 2002 8:25 AM<BR><B>To:</B> =
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,=20
it's your business what they are, how you calculate them, whether or =
not you=20
should have to prove them with statements, etc. It's also your =
business=20
whether you choose to share your returns with the group. I also =
*understand*=20
David's point of view, though I can't say I completely *agree* with =
it. Just=20
the same, I believe it is his business whether or not he chooses to =
speak=20
his mind.</DIV>
<DIV> </DIV>
<DIV>I hope what people will take away from all this is that one =
person's=20
gain on the list is not at the expense of another's. While =
technically this=20
is true in the marketplace, I think most of us would agree that we =
are tiny=20
cogs in the great wheel of the market and that competing against =
ourselves=20
over time is far more important than competing against each other. =
It seems=20
the purpose of the list is to help each other become *better* at =
what we do=20
and the thoughtful and enlightening posts by each and every person=20
contributes to this 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=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> Monday, February 18, =
2002 6:05=20
AM</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>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=20
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=20
there was no tax issue. My expenses for DGO and other net services =
was not=20
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=20
them home (US residents were not permitted to swap into shares of =
the=20
acquiring company, Allianz, a major insurer). Turned out to be a =
good=20
thing as Allianz shares got sliced in half by September 11 =
attacks. I did=20
not re-invest this money as I planned to use it for major =
renovations on=20
my house. Since that plan has now been postponed, I fully invested =
this=20
money on margin a few weeks ago. I did not consider it as =
"investable"=20
money during 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=20
it was easier to tell the truth and not waste energy trying to =
keep the=20
story "straight". My personal accounts were always open to =
my=20
clients to review if they wished. In 8 years, not a single one =
ever=20
requested this. I know of no other stock broker that ever made a =
similar=20
offer to his clients. Of course, they were paying me a commission, =
unlike=20
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=20
I do not post my stock picks, other than as a disclosure when they =
make=20
the 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=20
low priced. That I do both is a testament to my level of risk =
taking, as=20
well as understanding of these type investments. It is also why I =
put in 4=20
hours or so a day on the net, in addition to my 11-12 hour work=20
day.</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>Best regards to you and please keep up all =
the=20
quality 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=20
10:31 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. He is square and straightforward about what he does at =
all=20
times. He learned from WON early in his career and he has =
learned to=20
mold CANSLIM to his personal preferences. I can't say that I =
agree with=20
everything Tom does only in the sense that it is not "right for =
me." But=20
that is far different than judging whether or not it is =
successful=20
and/or "right for 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=20
my business and mine alone. There's absolutely no way to win =
when such=20
things are revealed. Either people believe that you are =
boasting, not=20
telling the truth, that your earnings are paltry by comparison =
to their=20
own, etc. etc. On the other hand, if someone reveals their =
returns, I=20
figure that's their business as well. I view this as a personal =
choice=20
and make no judgments either way. It's a tough market out there. =
In the=20
end, I find it's far more important at the end of the day to be =
able to=20
ask myself "did I do everything possible to earn the best =
returns=20
that I am able." To me, if I can answer "yes" to that question, =
then I=20
have had a successful day. I applaud Tom's returns, but I =
applaud his=20
willingness to admit that his returns in '99 would have been =
more=20
substantial if he'd focused on his portfolio with the same =
intensity=20
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=20
wrote during a discussion over this very issue:</DIV>
<P class=3DMsoNormal><STRONG>Returns…What Does That=20
Mean?<o:p></o:p></STRONG></P>
<P class=3DMsoNormal>I never make assumptions about the numbers =
people=20
give when they specify returns. Here are some examples as to =
why. For=20
all 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=20
style=3D"mso-tab-count: 1"> =
</SPAN>Person A makes=20
50% on *invested* monies. Lets say A invests $10K and earns 50%. =
Total=20
ending value =3D $15K. But what about the $90K that wasn't =
invested? Let's=20
say it made 5% in bonds and/or cash. That means it's now worth =
$94,500.=20
Total ending portfolio =3D $109,500. Total compounded returns =
for the year=20
=3D 0.095%. That's less than 1%. Certainly doesn't make the same =
statement=20
as "I made 50%."</P>
<P class=3DIndented>-<SPAN=20
style=3D"mso-tab-count: 1"> =
</SPAN>Person B makes=20
50% on *investable* monies. B invests $50K in bonds and/or cash. =
Say it=20
earns 5%. Ending value =3D $52,500. The remaining is invested =
and earns=20
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=20
ending value. This means that B turned $50K into $97.5K by the =
end of=20
the year through active investing. Total returns on *invested* =
monies =3D=20
95%. </P>
<P class=3DIndented>-<SPAN=20
style=3D"mso-tab-count: 1"> </SPAN>Part =
of=20
effective money management and risk control is to determine how =
much of=20
your investable dollars you are willing to risk. Your ability 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.=20
And certainly don't assume that all of their investable dollars =
earned=20
50%. 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=20
style=3D"mso-tab-count: 1"> =
</SPAN>Person A earns=20
50% on invested dollars. Maximum drawdown on total portfolio =
- -50%.=20
Person A also margined 100% of their account to generate these =
returns.=20
The average beta for the portfolio was 3 times the market =
average.</P>
<P class=3DIndented>-<SPAN=20
style=3D"mso-tab-count: 1"> =
</SPAN>Person B earns=20
50% on invested dollars. Maximum drawdown -10%. They did not =
margin and=20
the average beta of the portfolio was 1.5 times the market =
average. This=20
person by far earned the higher risk adjusted return.</P>
<P class=3DIndented>-<SPAN=20
style=3D"mso-tab-count: 1"> </SPAN>A =
good trader=20
is able to consistently generate returns with the least amount =
of=20
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=20
them 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=20
several weeks to several months. Until you sell the position =
(monetize=20
it), the gains are fairy dust. The bank might be willing to lend =
you=20
money against the value of your assets, but these dollars are =
not “real”=20
until they are in your pocket. If you have any doubts, go ask =
Barry=20
Ebbers of Worldcom 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=20
style=3D"mso-tab-count: 1"> =
</SPAN>Person A earned=20
200% one year and (-100%) the next. Average return is =
(200-100)/2 =3D 50%.=20
Sound impressive? They're flat broke.</P>
<P class=3DIndented>-<SPAN=20
style=3D"mso-tab-count: 1"> =
</SPAN>Person B earned=20
an average 50% compounded return over the last 5 years. That =
means that=20
if they started with $100K year one, they now have =
$100K*(1.50)^5 =3D=20
$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=20
2 weeks. They have annualized this as 12.5% * (10days/250days) =
=3D=20
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=20
style=3D"mso-tab-count: 1"> =
</SPAN>Person A has=20
10% of their money in an account that they manage personally. =
The=20
remaining 90% is with a money manger. They earned 50% on only =
10% of=20
their money.</P>
<P class=3DIndented>-<SPAN=20
style=3D"mso-tab-count: 1"> =
</SPAN>Person B takes=20
responsibility for 100% of their investable assets. They earned =
50% on=20
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 “a better =
system.”</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=20
investments like a business and evaluates all tools and =
expenditures as=20
to how they 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=20
of Buy Candidates</DIV>
<DIV><BR></DIV>
<DIV><FONT face=3DArial size=3D2>
<DIV>>>Your comments about EPIQ as a "big winner" in the =
portfolio 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>Katherine,</DIV>
<DIV> </DIV>
<DIV>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".=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=20
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=20
had great returns, you had XXXX an YYYY....you were just =
lucky."=20
Excuse me? I found XXXX and YYYY using the same methodical =
diligence=20
I apply to all my buys. The difference is, these guys never=20
triggered sell rules like all the others. Last Fall, I =
listened to a=20
presentation by Kevin Marder, a hedge fund manager and a=20
CANSLIM-style investor. He said the same thing that I've =
heard from=20
other successful investors. "At the end of each year I give =
my=20
accountant a list of my trades for tax purposes. On that =
list are a=20
bunch of trades with very small losses. Also on that list =
are some=20
really big gains that were responsible for most of my =
returns for=20
the year. This happens every year without exception."</DIV>
<DIV> </DIV>
<DIV>On the other hand, a comment such as "you were just =
lucky"=20
makes me smile and nod in agreement, because I define luck =
as "being=20
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=20
people 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]=20
Lack 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=20
the roaring bulls, just not making what I<BR>could. But =
that was=20
not the fault of my application of CANSLIM, it was =
a<BR>direct=20
consequence of total neglect of my portfolio due =
dedication and=20
hours<BR>spent on my day job. But even with total neglect, =
I still=20
managed about 12%<BR>or so without trading, so at least =
better=20
than a money market.<BR><BR>You are correct also that EPIQ =
was a=20
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=20
every stock I owned up for the year, and with minimal =
trading.=20
I<BR>only bought two new ones in 2001, the rest I had =
owned from=20
prior years. So<BR>far in 2002, I have added 6 new ones, =
and sold=20
one (merger announced). Altho<BR>three of the new ones are =
presently down, I am still up a little overall.<BR>And =
having=20
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"=20
<<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=20
NOT been a good indicator of average returns in=20
the<BR>group. Unless I'm mistaken, Tom was losing =
money or=20
breaking even back in<BR>the roaring bull, so maybe it was =
just=20
his turn!!<BR><BR>Tom does at least the following =
different from=20
my approach (just from<BR>memory):<BR><BR>1 - Microcaps =
only=20
(below the minimum recommended by WON) (S?)<BR>2 - Buys in =
the=20
base before the breakout (Needs to because of 1)<BR>3 - =
Doesn't=20
use Industry Group Strength as a leader/laggard indicator =
(I)<BR>4=20
- Buys in all markets (M)<BR><BR>>From my perspective, =
he=20
violates the normal rules for S, I, and M.<BR>However, Tom =
does=20
admit to this, and doesn't even generally post =
his<BR>selections=20
due to these variations.<BR><BR>Given the differences, I =
think it=20
should be expected that Tom's performance<BR>over a given =
year=20
will vary from many of us. (And there is that one=20
stock<BR>that has appreciated several times his original=20
investment that is<BR>impacting the results =
too!)<BR><BR>One other=20
note. >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 =
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=20
gives a<BR>lot of time and effort to the =
group.<BR><BR>FWIW, I=20
ended up 2001 with about a 13% loss and am down about 6% =
more=20
this<BR>year so far. Presently, I am only 25% =
invested with=20
one position. I am<BR>not really responding on =
the=20
group much, since I do not feel I have the<BR>experience =
to short,=20
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,=20
you wrote:<BR>>I think Tom bend only one rule --> =
stay out=20
of the 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=20
long side.<BR>>Just look on the builders or on the gold =
stocks=20
latley ...<BR>><BR>>BUT NEVER, NEVER buy stocks when =
the=20
market and the IG is down.<BR>>I have not seen one =
example=20
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=20
just setting up a bull market for its members no matter=20
what<BR>>the market is doing.<BR>><BR>>>=20
-----Urspr=FCngliche 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=20
CANSLIM rules, nonetheless my entire process =
is<BR>>heavily=20
based in CANSLIM. And I netted 76% for the full year, so =
yeah,=20
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>>>=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
$$<BR>>last year, and profitable so far this year =
(including my=20
fully=20
=
margined<BR>>account).<BR>>><BR>>> =20
>>fully invested year round, made lots of $$ 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=20
Message -----<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=20
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>>> =20
From:=20
=
Ian<BR>>> =20
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>>> =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=20
side. The rules for selling a big CANSLIM<BR>>winner =
make for=20
perfect short candidates. Although selling a=20
failed<BR>>breakout as it returns into its base is NOT=20
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=20
buying.<BR>> However, my short list is =
overflowing. The=20
only moderately attractive<BR>>stocks I see on the long =
side=20
are 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=
E></BLOCKQUOTE></BLOCKQUOTE></BODY></HTML>
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