Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: [CANSLIM] DFXI again
Date: Fri, 19 Apr 2002 11:07:03 -0500
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This is a multi-part message in MIME format. - ------=_NextPart_000_004B_01C1E792.55CCA140 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Hi Dave, Boy...you've hit on some hot buttons here and DFXI is a *great* example. On following the rules on your original position: Give yourself an "A" = for the day you did that. For every time you do follow the rules and get = whipsawed, there are probably 95 others where it was the right thing to = do. The problem with Mr. Market is that he occasionally rewards you for = breaking your rules and can lull you into believing that it is okay. As = soon as you start breaking some of the rules, you begin breaking others = and sooner or later the whole discipline is out the window. A rule based = on sound investing principles is there for a reason. On entering DFXI in the first place: There was quite a bit of discussion = about DFXI on the list around that breakout date (and prior). Add too = many eyes and an iffy market with multiple distribution days and you've = increased the likelihood of a failed breakout. Either you take the = plunge knowing that you can get whipsawed, or you stand aside until the = stock shows its mettle. WON says nearly 40% of stocks will pull back to = their pivot before moving on. There you go, second chance entry, which = could be taken after you'd been whipsawed, or after having sat out the = first breakout attempt. On basing decisions on intraday data: I've been mulling this very = dilemma for the last year. I always made my buying/selling decisions = based on end of day data until I retired and started investing full time = last year. I'm fairly convinced, given the intermediate timeframe for = CANSLIM investing, that intraday noise gets in the way of the approach. = After some nasty intraday whipsaws that had me making poor buy/sell = decisions, I've concluded that the end of day number is more important = to entry/exit. Once the day is closed (or nearly closed) you can see, = for example if a stock is finishing in the upper or lower part of the = range, whether the day's action was accumulation/distribution, etc. You = just can't tell that intraday. On setting hard stops: If in doubt, set a stop and live with the result = of that decision. A stop implies that you have defined what decision you = would make if that price were hit. Sometimes, the action reverses and = you "wish" you'd stayed in. Wish is a "dangerous word" in my book. By = the way, I'm not much of a believer in hard stops, but I've recently = updated my investing rules with the following: (1) If the market has experienced 4 distribution days in 2 weeks, set = hard stops on all remaining long positions. (2) When the price/volume action on a winning stock sends out the first = yellow flag, set a hard stop. Gulp...that's a hard thing for me, because it means I'm running the risk = of getting caught in some intraday silliness, so setting technically = sound stops will be the key, but that's an entirely different = discussion! Katherine ----- Original Message -----=20 From: Dave Rubin=20 To: canslim@lists.xmission.com=20 Sent: Friday, April 19, 2002 10:44 AM Subject: [CANSLIM] DFXI again Bought DFXI on 3/28 breakout. Sold for loss on 4/4. Sat back and = watched the stock surge higher, now hitting new highs on volume. Kicking myself = for following CANSLIM rules. I know WON says this will happen but nevertheless it is discouraging. = It's happened many times to me already. Each time it makes me want to throw CANSLIM out the window. I'm trying to ignore my emotions and do a constructive post-mortem. = Did I buy wrong? I don't think so -- it was a nice cup-handle breakout and I bought within 5% of the pivot. Did I bail too soon? Maybe. I know = you're supposed to cut losses at 8% period. But in this case on 4/4 it = dropped below 8% only intraday, then it surged to recover above the pivot. In reviewing past similar trades, intraday activity has often been the cause. Many times a stock will shake out intraday only to recover = before the day is done. So I wonder, should the 8% sell rule be applied on closing prices = only? In this case, if I waited until the end of trading on 4/4, I'd still be = in DFXI and enjoying the ride. Or maybe, should you simply ignore the first hour or two of trading = during the day? It seems to me in many cases, early trading is very volatile = and it's probably best to just sit on the sidelines until after lunch. -- Dave _________________________________________________________ Do You Yahoo!? Get your free @yahoo.com address at http://mail.yahoo.com - -To subscribe/unsubscribe, email "majordomo@xmission.com" -In the email body, write "subscribe canslim" or -"unsubscribe canslim". Do not use quotes in your email. - ------=_NextPart_000_004B_01C1E792.55CCA140 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable <!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> <HTML><HEAD> <META http-equiv=3DContent-Type content=3D"text/html; = charset=3Diso-8859-1"> <META content=3D"MSHTML 6.00.2600.0" name=3DGENERATOR> <STYLE></STYLE> </HEAD> <BODY bgColor=3D#ffffff> <DIV>Hi Dave,</DIV> <DIV> </DIV> <DIV>Boy...you've hit on some hot buttons here and DFXI is a *great*=20 example.</DIV> <DIV> </DIV> <DIV>On following the rules on your original position: Give yourself an = "A" for=20 the day you did that. For every time you do follow the rules and get = whipsawed,=20 there are probably 95 others where it was the right thing to do. The = problem=20 with Mr. Market is that he occasionally rewards you for breaking your = rules=20 and can lull you into believing that it is okay. As soon as you = start=20 breaking some of the rules, you begin breaking others and sooner or = later the=20 whole discipline is out the window. A rule based on sound investing = principles=20 is there for a reason.</DIV> <DIV> </DIV> <DIV>On entering DFXI in the first place: There was quite a bit of = discussion=20 about DFXI on the list around that breakout date (and prior). Add too = many eyes=20 and an iffy market with multiple distribution days and you've increased = the=20 likelihood of a failed breakout. Either you take the plunge knowing that = you can=20 get whipsawed, or you stand aside until the stock shows its mettle. WON = says=20 nearly 40% of stocks will pull back to their pivot before moving on. = There you=20 go, second chance entry, which could be taken after you'd been = whipsawed, or=20 after having sat out the first breakout attempt.</DIV> <DIV> </DIV> <DIV>On basing decisions on intraday data: I've been mulling this very = dilemma=20 for the last year. I always made my buying/selling decisions based on = end of day=20 data until I retired and started investing full time last year. I'm = fairly=20 convinced, given the intermediate timeframe for CANSLIM investing, that = intraday=20 noise gets in the way of the approach. After some nasty intraday = whipsaws that=20 had me making poor buy/sell decisions, = I've concluded that the=20 end of day number is more important to entry/exit. Once the day is = closed (or=20 nearly closed) you can see, for example if a stock is finishing in the = upper or=20 lower part of the range, whether the day's action was = accumulation/distribution,=20 etc. You just can't tell that intraday.</DIV> <DIV> </DIV> <DIV>On setting hard stops: If in doubt, set a stop and live with the = result of=20 that decision. A stop implies that you have defined what decision you = would make=20 if that price were hit. Sometimes, the action reverses and you "wish" = you'd=20 stayed in. Wish is a "dangerous word" in my book. By the way, I'm not = much of a=20 believer in hard stops, but I've recently updated my investing rules = with the=20 following:</DIV> <DIV> </DIV> <DIV>(1) If the market has experienced 4 distribution days in 2 weeks, = set hard=20 stops on all remaining long positions.</DIV> <DIV>(2) When the price/volume action on a winning stock sends = out the=20 first yellow flag, set a hard stop.</DIV> <DIV> </DIV> <DIV>Gulp...that's a hard thing for me, because it means I'm running the = risk of=20 getting caught in some intraday silliness, so setting technically = sound=20 stops will be the key, but that's an entirely different = discussion!</DIV> <DIV> </DIV> <DIV>Katherine</DIV> <DIV> </DIV> <DIV> </DIV> <BLOCKQUOTE=20 style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; = BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px"> <DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV> <DIV=20 style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: = black"><B>From:</B>=20 <A title=3Ddaverubin@yahoo.com = href=3D"mailto:daverubin@yahoo.com">Dave Rubin</A>=20 </DIV> <DIV style=3D"FONT: 10pt arial"><B>To:</B> <A = title=3Dcanslim@lists.xmission.com=20 = href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>= </DIV> <DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Friday, April 19, 2002 = 10:44=20 AM</DIV> <DIV style=3D"FONT: 10pt arial"><B>Subject:</B> [CANSLIM] DFXI = again</DIV> <DIV><BR></DIV>Bought DFXI on 3/28 breakout. Sold for loss on 4/4. Sat = back=20 and watched the<BR>stock surge higher, now hitting new highs on = volume.=20 Kicking myself for<BR>following CANSLIM rules.<BR><BR>I know WON says = this=20 will happen but nevertheless it is discouraging. It's<BR>happened many = times=20 to me already. Each time it makes me want to throw<BR>CANSLIM out the=20 window.<BR><BR>I'm trying to ignore my emotions and do a constructive=20 post-mortem. Did I<BR>buy wrong? I don't think so -- it was a nice = cup-handle=20 breakout and I<BR>bought within 5% of the pivot. Did I bail too soon? = Maybe. I=20 know you're<BR>supposed to cut losses at 8% period. But in this case = on 4/4 it=20 dropped<BR>below 8% only intraday, then it surged to recover above the = pivot.<BR><BR>In reviewing past similar trades, intraday activity has = often=20 been the<BR>cause. Many times a stock will shake out intraday only to = recover=20 before the<BR>day is done.<BR><BR>So I wonder, should the 8% sell rule = be=20 applied on closing prices only? In<BR>this case, if I waited until the = end of=20 trading on 4/4, I'd still be in DFXI<BR>and enjoying the = ride.<BR><BR>Or=20 maybe, should you simply ignore the first hour or two of trading = during<BR>the=20 day? It seems to me in many cases, early trading is very volatile = and<BR>it's=20 probably best to just sit on the sidelines until after=20 = lunch.<BR><BR>--<BR>Dave<BR><BR><BR>_____________________________________= ____________________<BR>Do=20 You Yahoo!?<BR>Get your free @yahoo.com address at <A=20 = href=3D"http://mail.yahoo.com">http://mail.yahoo.com</A><BR><BR><BR>-<BR>= - -To=20 subscribe/unsubscribe, email "<A=20 = href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>-In= the=20 email body, write "subscribe canslim" or<BR>-"unsubscribe = canslim". Do=20 not use quotes in your email.</BLOCKQUOTE></BODY></HTML> - ------=_NextPart_000_004B_01C1E792.55CCA140-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email.
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