Re: [CANSLIM] PPDI Prevailing Wisdom on Earnings Announcment

From: "Patrick Wahl" <pjwahl@attbi.com>
Subject: Re: [CANSLIM] PPDI Prevailing Wisdom on Earnings Announcment
Date: Wed, 27 Mar 2002 13:19:43 -0700

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Buying ahead of earnings was discussed sometime last year, I think.  It is not 
discussed anywhere that I know of by WON, but it does make sense that you don't 
make a new commitment to a stock only a few days before an earnings 
announcement.  Almost certainly you will have only a small gain if you are just into 
a stock and earnings can really thrash the smaller Canslim type stock, so I think you 
are taking on more risk when you buy too close to an earnings release.  As far as 
institutions soaking up a stock, fine, but if you are trying to keep losses manageable, 
you may be out on a short term hit before the stock can stabilize.   If you have held 
a stock for a while and have a gain, you an afford to sit through the earnings and 
hope it's a favorable surprise or at least status quo.

I'm even a little suspicious of a stock that breaks out just ahead of the earnings 
release, seems to have a bit of the speculative flavor to it and be prone to failing.  
Anecdotally speaking, Copper Mountain hit its all time high about two days before 
an earnings release, and then it was all down hill from there, about 100 dollars 
down.  I remember because I was very tempted to jump in, but fortunately 
something held me back,  I think it was a little fear about buying ahead of the 
earnings release.

On 27 Mar 2002 at 13:39, Katherine Malm wrote:

> Tim,
> 
> See what you mean. The Bear has certainly bred a
> short-term-smoke-em-while-you've-got-em mentality into the market.
> Still think that the majority of institutional monies are committed to
> longer term views, so ultimately a strong stock will overcome that
> short term profit taking as institutions soak up the pullback. 
> 

> Katherine
>   ----- Original Message ----- 
>   From: Tim Fisher 
>   To: canslim@lists.xmission.com 
>   Sent: Wednesday, March 27, 2002 1:26 PM
>   Subject: Re: [CANSLIM] PPDI Prevailing Wisdom on Earnings Announcment
> 
> 
>   Nope, you didn't. It's a part of MY CANSLIM approach, has been discussed B4 
>   on this list, I forget where it was first referenced, assumed it was 
>   HTMMIS, but was obviously mistaken. Maybe was from HGS. Anyway too many 
>   short termers buy 2-3 wks B4 and sell the second after the announcement.
> 
>   At 01:03 PM 3/27/2002 -0600, you wrote:
>   >Tim, I didn't see this mentioned in the 'buy rules', did I overlook it?
>   >
>   >Gene
>   >Not buying right before an earnings announcement is part of CANSLIM, however.
> 
>   Tim Fisher
>   Ore-ROCK-On Rockhounding Web Site
>   Owner, Fisher Fisheries, Ltd.
>   mailto:tim@OreRockOn.com
>   WWW http://OreRockOn.com
> 
> 
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