Re: [CANSLIM] Bear Rally?

From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] Bear Rally?
Date: Sun, 14 Apr 2002 10:20:10 -0400
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Duke,

We don't need a new letter, we already have "S". Of course, over the years
WON has redefined this letter. In my first edition of HTMMIS, this letter
was defined as "S=Supply and Demand: Small Capitalization Plus Volume
Demand" and WON indicated that you should look for a company with only a few
million shares outstanding. He also favored "Stocks that have a large
percentage of ownership by top management are generally your better
prospects". He also noted that the "average capitalization of top performing
listed stocks from 1970 through 1982 was 11.8 million shares. The median
stock exhibited 4.6 million shares outstanding before advancing rapidly in
price."

Of course, a lot has changed since my copy was published in 1991, and I
doubt either WON or IBD today would champion small cap stocks, much less
ones this small. WON went over to the big cap camp over five years ago, and
I have seen little evidence of him adhering to the "S" since then.

Tom Worley
stkguru@bellsouth.net
AIM: TexWorley
- ----- Original Message -----
From: "Duke Miller" <dukemill@tampabay.rr.com>
To: <canslim@lists.xmission.com>
Sent: Sunday, April 14, 2002 9:55 AM
Subject: RE: [CANSLIM] Bear Rally?


Jans:

Good thinking and input for the neighborhood. Can you say "CANSLICM?"

Not long ago we debated herein the capitalization definitions.  Do you
suppose their (IBD's) definitions in the IC (<=1bb is small; >=5bb is
large; mid in between) conform to the S&P 600 (Small), 400 (mid), and
500 (big)?

Duke

- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com] On Behalf Of Spencer48@aol.com
Sent: Sunday, April 14, 2002 1:15 AM
To: canslim@lists.xmission.com
Subject: Re: [CANSLIM] Bear Rally?


Katherine and Duke:

     In today's Investor's Corner (4/15) the column focuses on the fact
that
small caps are doing well while the big caps are lagging.  This approach
is
interesting.  Apparently one should look at:  The Mkts ->The Industry ->
The
Capitalization (whether the stock is a big cap or a small cap makes a
difference, according to the article, regarding the probability that the

stock will take off.  If small caps are currently  being favored than
investing in big caps is less likely to garner a winner.)
- -> (and finally) The Stock.

     So it looks as if one should go through the above checklist to find
a
stock that will be a winner.  (Apropos, I wonder if anyone has compared
the
industry [I know CANSLIM uses a Strong Industry as a necessary
forerunner of
a strong stock] with the favored capitalization at the time.

     For instance, if XYZ industry is the industry that CANSLIM/WON
favors at
the present, would the capitalization  of the stock that is in that
industry
make a significant difference as to its return, ie. do the statistics
confirm
that not only the industry, but also the capitalization of the stock in
that
industry, is a big factor in the movement up of that stock? )

jans



In a message dated 4/13/2002 12:50:16 PM Eastern Daylight Time,
kmalm@earthlink.net writes:

<< MessageHi Duke,

 I read the article and thought the same thing. I think the real issue
is
that when all stocks are not in a Bull Market, you can't talk
meaningfully
about "THE Market" any longer. For example, the last couple of years of
"the
great Bull", the Dow ran sideways while the NASDAQ screamed. The article

today only reinforces that notion. That is, some stocks are going up,
others
are going down, others are moving sideways. That's always the case, but
when
equities aren't the absolute best place to put your money for "sure"
gains,
the marginal dollars will flow to other investment classes and the rest
of
the market will ebb and flow. If nothing else, it just reminds us as
CANSLIM
investors that we have to pick only the best candidates and follow sound

buy/sell rules. I don't think there's going to be a clear direction for
"the
Market" as a whole for many years. We're going to have to read the
health of
the CANSLIM market (i.e. CANSLIM-quality stocks) and then go for
strength
within that.

 Katherine

 PS.... The term "rally" is used in many contexts, even within the IBD
and
Investors.com. Is it an upswing? Is it action after a followthru day? Is
it a
Bull? How persistent does an upswing need to be before it's no longer
considered "a rally"? Rally relative to what? relative to when?
Geez....very
confusing terminology. >>

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