Re: [CANSLIM] BRLI

From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] BRLI
Date: Tue, 26 Mar 2002 23:53:37 -0500

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Tom has made some very nice money in small and micro cap stocks, and almost
always low priced and thinly traded as well. I have been quite clear that I
like / enjoy taking risks (something of an "in your face" kind of
investing). I have also lost a lot of money doing this, and clearly
recognize that I break a heck of a lot of rules on CANSLIM in the process. I
also must accept far greater risk to my capital, allow stocks to drop far
more than the recommended 8%, even 15%, even over 50% on some occasions when
I got really mouthy and argumentative with the market.

Tom Worley
stkguru@bellsouth.net
AIM: TexWorley
- ----- Original Message -----
From: "Bill Triffet" <btriffet@earthlink.net>
To: <canslim@lists.xmission.com>
Sent: Tuesday, March 26, 2002 8:00 PM
Subject: Re: [CANSLIM] BRLI


Ian,



> Actually, if you just go through the letters in CANSLIM, there is nothing
in
> them about price or volume :)

That's why I included the recommendation about HTMMIS as it does cover price
and volume - a lot. I actualy should have mentioned the 24 Lessons book. The
old
WON book is really dated now.

> Because the low price stocks tend to trade at much lower valuations, they
> are MUCH more resistant to getting dragged down with 'M", so I can
> underweight it - but you have to be very careful about only buying strong
> sectors.

That brings up an excellent point. In the current market say 2000 to now
(g), the larger caps have sucked ( at least the ones I picked). Tom here can
attest to the strength of micros over the past couple years. I have watched
(and got taken out) on more than a few IBD perfect (so I perceive) breakouts
this year and the last.

Which brings me to my point. If you go through HTMMIS you see WON doesn't
put a lot of faith in cyclicals, banks, services, etc... The talk was always
"look for the high growth flyers, ready to explode..." (so I exagerated it a
bit). This year we've been seeing retail, financials, services, even golk
etc... being talked about in IBD and this group as candidates. I think this
addresses your comment below about the current crop. I also think IBD has
adopted a bit of a shorter trading stratigy because in the book I recall the
metion of cyclicals falling out of favor when the new bull starts up.

>
> IMHO, most current IBD CANSLIM stocks are grossly negligent in their
> complete dismissal of the original 'S' criteria.  Microcaps can kick you
in
> the back of the head telling you that 'S' is about to propel them upwards.
> Look at the volume on NBSC from Feb 13 onwards. The increase from its
> week-earlier ADV is an order of magnitude. When the stock is cheap,
hitting
> new highs, growing with strong EPS and a sound outlook ... and that kind
of
> 'S' picture suddenly emerges, the stock has nowhere to go but up.
>

Bottom line is if true canslim is not working it's probubly the market to
blame. If microcaps are working, I say right on but be aware of the
differences. I for one am starting to look more into micros - but with a
very cautious eye.

But who am I to say... I've been in cash for several weeks now. (g)

- -Bill



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