Re: [CANSLIM] BRLI

From: Ian <ianstm@shaw.ca>
Subject: Re: [CANSLIM] BRLI
Date: Tue, 26 Mar 2002 22:11:25 -0800
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Bill:

One of the most beneficial artifacts of buying microcaps is also what makes
them very difficult:

1. If you catch the trigger point precisely, and the stock 'behaves', you
almost never have to worry about near-term sell rules, as the price will
explode past the pivot point, and never revisit it (see NBSC at $6 as a
recent example, but ALL of my big winners have the same characteristic - it
is what encourages me to pyramid to my positions).

2. It is often extremely dificult to catch trigger points precisely. You
really do need to be watching when it happens, and pull the trigger very
quickly and decisively. You often only have a 5-minute window (or less) to
get within the 5% trigger point.

The liquidity (or lack thereof) in these cases acts as a very strong barrier
to deep pullbacks You get to be comofrtably in the green from the onset, and
can happily hold through 10-15% swings that never revisit the trigger point.
The key, as always is volume. You need to be very aware of distribution.

Cheers,

Ian




- ----- Original Message -----
From: Bill Triffet <btriffet@earthlink.net>
To: <canslim@lists.xmission.com>
Sent: Tuesday, March 26, 2002 5:00 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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