Go to Jeff Salisbury LWGate Home Page.From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] The Market
Date: Sat, 27 Apr 2002 06:26:39 -0400
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This is a multi-part message in MIME format. - ------=_NextPart_000_007B_01C1EDB4.7D93F7F0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable I have to heartily agree with Ian. When you go value shopping, you are = gambling on two things: you can correctly determine value; and the = market will eventually agree with you. The biggest problem in buying a = stock at a low is being sure it won't go any lower. And the laws of = physics apply to stocks as well, a stock in motion (trending lower) = tends to remain in motion (go even lower). I was stunned a while back when I read that AT&T was going to do a 5:1 = REVERSE split. In over 40 years of investing, I cannot recall ever = seeing a big cap name like T do a reverse split, didn't understand it = until I saw the explanation that once they sell their wireless business = (worth something like $10/share) the stock price will drop below $5, and = not be of interest or buyable by institutions. Of course, my experience = with reverse splits done to maintain price is that the price will = continue to erode post split, and I would not be surprised if T is no = exception. But without a doubt, there will still be buyers of the stock, = now and post split, thinking it represents a cheap price. When a stock is undervalued by the marketplace, there is a reason. And = the market has taught me time and time again to be humble, not to think = I am smarter and can see value where the market discounts it. While I = have had a few exceptional plays on "bottom fishing for value", for the = most part they mostly worked out to a loss or, at best, stagnant capital = tied up in a non performing stock while the market surged ahead. Tom Worley stkguru@bellsouth.net AIM: TexWorley - ----- Original Message -----=20 From: Ian=20 To: canslim@lists.xmission.com=20 Sent: Friday, April 26, 2002 9:54 PM Subject: Re: [CANSLIM] The Market "something that seems self evident to me" I live in Canada where the love affair with tech seems to be every bit = as strong as in the USA. The problem is, there are only a handful of big = tech names here to choose from. Ever since late October 2000, when it = took its first big haircut from $70 to $45, is has been 'self evident' = to almost everyone around me that it was only a matter of time before NT = was bid up high again - since telephones/Internet weren't going away, = and all that insitutional money had to go somewhere. It keeps being = 'self evident' to everyone ... every successive time it gets cut in = half. I've been watching someone average down with each successive haircut - = in stunned awe at their ability to rationalize away their massive losses = - - in spite of the fact that every time they bought it, my advice was = sought first, and I recommended shorting it. IMHO, the only thing in the stock market that is 'self evident' is a = strong trend that is already in place. Playing the contrarian against = those trends has always been an incredibly high risk endeavour. Ian ----- Original Message -----=20 From: Chazmoore@aol.com=20 To: canslim@lists.xmission.com=20 Sent: Friday, April 26, 2002 5:19 PM Subject: [CANSLIM] The Market I belong to two investment clubs and both follow CANSLIM, which means = we have done a lot of talking but not much investing for the last two = years. We start our meetings with a brief discussion of the markets, and = as you might expect, the message today is not much different from what = it was a year ago. However, I would like to get some feedback on = something that seems self evident to me.=20 Clearly, the large cap stocks are doing poorly across the board while = small/mid caps, and even Tom's favorites, the microcaps, are doing well = in some sectors. The fact that the smaller stocks are doing well is now = on every commentators tongue, and in every financial writers column. = Meanwhile, the very large institutions stay on the sidelines because = they really can't play the small fry.=20 For the investor who has a ten or more year investment horizon, this = looks like an opportunity to buy some truly great companies at bargain = prices. I am talking about creating a core group of stocks as a = foundation for a diversified portfolio. It seems to me that once the = market has turned up significantly, we can expect a trillion or more = dollars to pour into the market. The Institutions will not be buying the = stocks we discuss on this board. They will be buying Wal-Mart, = Citigroup, Exxon-Mobil, General Electric, and other big hitters.=20 What do you think?=20 I wish I could participate but at my age I don't even buy green = bananas.=20 Charley=20 - ------=_NextPart_000_007B_01C1EDB4.7D93F7F0 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 6.00.2715.400" name=3DGENERATOR> <STYLE></STYLE> </HEAD> <BODY bgColor=3D#ffffff> <DIV><FONT face=3DArial>I have to heartily agree with Ian. When you go = value=20 shopping, you are gambling on two things: you can correctly determine = value; and=20 the market will eventually agree with you. The biggest problem in buying = a stock=20 at a low is being sure it won't go any lower. And the laws of physics = apply to=20 stocks as well, a stock in motion (trending lower) tends to remain in = motion (go=20 even lower).</FONT></DIV> <DIV><FONT face=3DArial></FONT> </DIV> <DIV><FONT face=3DArial>I was stunned a while back when I read that = AT&T was=20 going to do a 5:1 REVERSE split. In over 40 years of investing, I cannot = recall=20 ever seeing a big cap name like T do a reverse split, didn't understand = it until=20 I saw the explanation that once they sell their wireless business (worth = something like $10/share) the stock price will drop below $5, and not be = of=20 interest or buyable by institutions. Of course, my experience with = reverse=20 splits done to maintain price is that the price will continue to erode = post=20 split, and I would not be surprised if T is no exception. But without a = doubt,=20 there will still be buyers of the stock, now and post split, thinking it = represents a cheap price.</FONT></DIV> <DIV><FONT face=3DArial></FONT> </DIV> <DIV><FONT face=3DArial>When a stock is undervalued by the marketplace, = there is a=20 reason. And the market has taught me time and time again to be humble, = not to=20 think I am smarter and can see value where the market discounts it. = While I have=20 had a few exceptional plays on "bottom fishing for value", for the most = part=20 they mostly worked out to a loss or, at best, stagnant capital tied up = in a non=20 performing stock while the market surged ahead.</FONT></DIV> <DIV><FONT face=3DArial></FONT> </DIV> <DIV>Tom Worley<BR><A=20 href=3D"mailto:stkguru@bellsouth.net">stkguru@bellsouth.net</A><BR>AIM:=20 TexWorley</DIV> <DIV style=3D"FONT: 10pt arial">----- Original Message -----=20 <DIV style=3D"BACKGROUND: #e4e4e4; font-color: black"><B>From:</B> <A=20 title=3Dianstm@shaw.ca href=3D"mailto:ianstm@shaw.ca">Ian</A> </DIV> <DIV><B>To:</B> <A title=3Dcanslim@lists.xmission.com=20 href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>= </DIV> <DIV><B>Sent:</B> Friday, April 26, 2002 9:54 PM</DIV> <DIV><B>Subject:</B> Re: [CANSLIM] The Market</DIV></DIV> <DIV><BR></DIV> <DIV><FONT size=3D2>"something that seems self evident to = me"</FONT></DIV> <DIV> </DIV> <DIV><FONT size=3D2>I live in Canada where the love affair with tech = seems to be=20 every bit as strong as in the USA. The problem is, there are only a = handful of=20 big tech names here to choose from. Ever since late October 2000, when = it took=20 its first big haircut from $70 to $45, is has been 'self evident' to = almost=20 everyone around me that it was only a matter of time before NT was bid = up high=20 again - since telephones/Internet weren't going away, and all that = insitutional=20 money had to go somewhere. It keeps being 'self evident' to everyone ... = every=20 successive time it gets cut in half.</FONT></DIV> <DIV> </DIV> <DIV><FONT size=3D2>I've been watching someone average down with = each=20 successive haircut - in stunned awe at their ability to rationalize away = their=20 massive losses - in spite of the fact that every time they bought it, my = advice was sought first, and I recommended shorting = it.</FONT></DIV> <DIV> </DIV> <DIV><FONT size=3D2>IMHO, the only thing in the stock market that is = 'self=20 evident' is a strong trend that is already in place. Playing the = contrarian=20 against those trends has always been an incredibly high risk=20 endeavour.</FONT></DIV> <DIV> </DIV> <DIV><FONT size=3D2>Ian</FONT></DIV> <DIV> </DIV> <DIV> </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=3DChazmoore@aol.com=20 href=3D"mailto:Chazmoore@aol.com">Chazmoore@aol.com</A> </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 26, 2002 = 5:19=20 PM</DIV> <DIV style=3D"FONT: 10pt arial"><B>Subject:</B> [CANSLIM] The = Market</DIV> <DIV><BR></DIV><FONT face=3Darial,helvetica><FONT size=3D2>I belong to = two=20 investment clubs and both follow CANSLIM, which means we have done a = lot of=20 talking but not much investing for the last two years. We start our = meetings=20 with a brief discussion of the markets, and as you might expect, the = message=20 today is not much different from what it was a year ago. However, I = would like=20 to get some feedback on something that seems self evident to me.=20 <BR><BR>Clearly, the large cap stocks are doing poorly across the = board while=20 small/mid caps, and even Tom's favorites, the microcaps, are doing = well in=20 some sectors. The fact that the smaller stocks are doing well is now = on every=20 commentators tongue, and in every financial writers column. Meanwhile, = the=20 very large institutions stay on the sidelines because they really = can't play=20 the small fry. <BR><BR>For the investor who has a ten or more year = investment=20 horizon, this looks like an opportunity to buy some truly great = companies at=20 bargain prices. I am talking about creating a core group of stocks as = a=20 foundation for a diversified portfolio. It seems to me that once the = market=20 has turned up significantly, we can expect a trillion or more dollars = to pour=20 into the market. The Institutions will not be buying the stocks we = discuss on=20 this board. They will be buying Wal-Mart, Citigroup, Exxon-Mobil, = General=20 Electric, and other big hitters. <BR><BR>What do you think? <BR><BR>I = wish I=20 could participate but at my age I don't even buy green bananas.=20 <BR><BR>Charley</FONT> </FONT></BLOCKQUOTE></BODY></HTML> - ------=_NextPart_000_007B_01C1EDB4.7D93F7F0-- - - - -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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