Re: [CANSLIM] Bear Rally?

From: Spencer48@aol.com
Subject: Re: [CANSLIM] Bear Rally?
Date: Sun, 14 Apr 2002 01:15:17 EDT

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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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