Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: [CANSLIM] Today's IBD "Big Picture" comments...
Date: Wed, 1 May 2002 13:09:06 -0500
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Hi Mike,
I'm not sure how others would define them, but I use the term "secular" =
to indicate "of lasting duration" and "majority of stocks."
So, to me, a secular bull is one where the majority of stocks are =
trading above their 200 dMA's, the 200dMA's are rising, and each =
successifve correction takes stocks to new highs. Secular bear would be =
the inverse.
Here's a nice article on the subject:
http://csf.colorado.edu/authors/Alexander.Mike/SecTrends.htm
Katherine
----- Original Message -----=20
From: Mike Gibbons=20
To: canslim@lists.xmission.com=20
Sent: Wednesday, May 01, 2002 12:54 PM
Subject: RE: [CANSLIM] Today's IBD "Big Picture" comments...
I've seen the term "secular bull" and "secular bear" several times on =
the board but don't understand it. What other kinds of market are there =
- - catholic? anglican?
I'm not being fascetious, just curious.
Aloha,
Mike Gibbons
Proactive Technologies, LLC
http://www.proactech.com
-----Original Message-----
From: owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Katherine Malm
Sent: Wednesday, May 01, 2002 7:25 AM
To: canslim@lists.xmission.com
Subject: Re: [CANSLIM] Today's IBD "Big Picture" comments...
Hi Bill,
You've brought up an excellent issue and that is "what *is* =
CANSLIM"? I think reading HTMMIS is a lot like reading the Bible. Each =
person can read the same text, the same translation, and they will come =
away with a different interpretation of "what it means." I reread HTMMIS =
constantly, seeing new passages and new points of view given my new =
experiences over time. In the last couple of years I've come to believe =
that there is a core set of "golden rules" at the heart of CANSLIM that =
are universal to the style, but the implementation of those golden rules =
may be different from one person to the next. Contrary to DanF's point =
of view, I don't see IBD as "jerking our chain" but instead see this as =
proof of my point of view. That is, even within the IBD (and CANSLIM), =
there are seeming contradictions. Their 20 points will say one thing, =
but they will give examples of winning stocks that demonstrate =
exceptions. Bottom line for me is that there's a big difference between =
"restrictive rules" and "general guidelines" and there's no substitute =
for understanding the core concepts that make up the CANSLIM style. For =
example, in a secular Bull where nearly every stock is in an uptrend and =
above the 200dMA, the biggest task is to pick "the best" of those going =
up. During downtrending or sideways markets, the first task is to =
identify those stocks/groups that are technically superior, and then, =
within those groups to find the best fundamental stories. The difference =
between those 2 markets is simply that the risk of being wrong in a =
secular bull vs downtrending/sideways markets is smaller, so the tuition =
for making errors is smaller. But the tuition is *always* there, just =
more severe and obvious in tougher markets.
This is how I'd express the "core spirit of CANSLIM":
-Use technical strength to draw your eye to stocks that are working. =
This can be expressed by relationship to intermediate term moving =
averages (50/200 day MA's), rising RS, new highs, =
accumulation/distribution, up/down ratios, strong groups, increasing =
institutional ownership, strong style subsectors of the market, etc. =
Make purchases only on appropriate technical patterns.
-Select only stocks with superior forward growth estimates. Yes, =
estimates can be wrong, but if the technicals are also strong, at least =
the market is confirming this expectation (for the moment). Confirm =
these estimates with appropriate due diligence so that you understand =
what makes this growth possible.
-Select only stocks with superior financials. That means not only a =
demonstrated ability to grow earnings and revenues, but financial =
stability that will allow them to weather the tough times and/or =
continue their strategy for continued growth. That means a strong =
balance sheet, sufficient cash flow, excellent returns on equity =
invested, etc.
-Select only stocks with sufficient liquidity to allow easy =
entry/exit when the time is right technically.
-Preserve capital above all else. When you make a mistake, move on =
and reinvest the remaining capital in what *is* working.
-Know how to read a chart so that you can exit and keep profits at =
the appropriate time. In secular bull markets, you can ride out =
consolidations knowing that there is a greater likelihood that the same =
stocks and groups will continue their upward trek. In =
downtrending/sideways markets, you cannot afford to sit through the =
consolidation because the risk that the stock/sector/style will fall out =
of favor is greater. Step aside as the consolidation starts, move to =
strength elsewhere, come back when/if the consolidation ends and =
continues upward. If a secular bull starts again, you'll be in the right =
stocks already and can just ride them longer.
-Know how to identify and track a group of stocks that gives you the =
"pulse of your market." If the pulse is poor, stand aside or learn to =
short them as they fail.
-Always do post analysis and use successes and failures as building =
blocks to becoming a better investor. Be honest about what you are doing =
right or wrong. It's just like budgeting or dieting. Obviously, if =
you're gaining weight or saving less than your plan, you need to change =
something.
Katherine
----- Original Message -----=20
From: Bill Triffet=20
To: canslim=20
Sent: Wednesday, May 01, 2002 11:12 AM
Subject: [CANSLIM] Today's IBD "Big Picture" comments...
Well friends, it seems that today's IBD confirms what I've thought =
about the
M in canslim - It's not necessarily based on the readings of the =
three major
market indexes ( a big departure from HTMMIS).
I'm paraphrasing the last three paragraphs of "The Big =
Picture"(there are
stiff copyright disclaimers at IBD):
It will take a few days to see if the rotation BACK into the Dow, =
Naz, and
S&P is valid. There should be a big move in heavier volume by the =
end of the
week to confirm it.
It goes on to say it's a "nonissue" for growth investors since =
small and
mid-cap stocks along with medical, consumer and defense are doing =
well
despite the big averages. If they hold up, it says, the major =
averages could
improve.
Also mentions "careful trading" with tight loss cutting is key.
My point? IMHO, IBD is marketed for many types of investors. Pure =
canslim
(if there is such a thing) is just one of them.
I think perhaps it's time for me to look at growth investing with =
a canslim
approach. I'm starting to see several here have done this to great =
success
(though with very close watching). Including things such as a =
lower but
advancing RS as opposed to just a high rating and not be afraid to =
jump into
stocks in an upwards trending sector though the market is flat or =
down IF
they have good fundies.
Several times this and last year I saw stocks and groups moving =
ahead but
stayed out due to the major indexes downward trend. Comments?
Btw, for Fred, it suggests there's heavy distribution out of gold =
and
precious metals by investors.
Bill Triffet
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<DIV>Hi Mike,</DIV>
<DIV><BR>I'm not sure how others would define them, but I use the term =
"secular"=20
to indicate "of lasting duration" and "majority of stocks."</DIV>
<DIV> </DIV>
<DIV>So, to me, a secular bull is one where the majority of stocks are =
trading=20
above their 200 dMA's, the 200dMA's are rising, and each successifve =
correction=20
takes stocks to new highs. Secular bear would be the inverse.</DIV>
<DIV> </DIV>
<DIV>Here's a nice article on the subject:</DIV>
<DIV><A=20
href=3D"http://csf.colorado.edu/authors/Alexander.Mike/SecTrends.htm">htt=
p://csf.colorado.edu/authors/Alexander.Mike/SecTrends.htm</A></DIV>
<DIV> </DIV>
<DIV>Katherine</DIV>
<BLOCKQUOTE dir=3Dltr=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=3Dmikegibbons@proactech.com=20
href=3D"mailto:mikegibbons@proactech.com">Mike Gibbons</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> Wednesday, May 01, 2002 =
12:54=20
PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> RE: [CANSLIM] Today's =
IBD "Big=20
Picture" comments...</DIV>
<DIV><BR></DIV>
<DIV><SPAN class=3D670465117-01052002><FONT face=3DArial =
color=3D#0000ff size=3D2>I've=20
seen the term "secular bull" and "secular bear" several times on the =
board but=20
don't understand it. What other kinds of market are there - =
catholic?=20
anglican?</FONT></SPAN></DIV>
<DIV><SPAN class=3D670465117-01052002><FONT face=3DArial =
color=3D#0000ff=20
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D670465117-01052002><FONT face=3DArial =
color=3D#0000ff size=3D2>I'm=20
not being fascetious, just curious.</FONT></SPAN></DIV>
<DIV> </DIV>
<DIV><FONT face=3DArial size=3D2>Aloha,</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>Mike Gibbons<BR>Proactive =
Technologies,=20
LLC</FONT></DIV>
<DIV><FONT face=3DArial size=3D2><A=20
=
href=3D"http://www.proactech.com">http://www.proactech.com</A></FONT></DI=
V>
<BLOCKQUOTE dir=3Dltr style=3D"MARGIN-RIGHT: 0px">
<DIV class=3DOutlookMessageHeader dir=3Dltr align=3Dleft><FONT =
face=3DTahoma=20
size=3D2>-----Original Message-----<BR><B>From:</B> <A=20
=
href=3D"mailto:owner-canslim@lists.xmission.com">owner-canslim@lists.xmis=
sion.com</A>=20
[mailto:owner-canslim@lists.xmission.com]<B>On Behalf Of =
</B>Katherine=20
Malm<BR><B>Sent:</B> Wednesday, May 01, 2002 7:25 AM<BR><B>To:</B>=20
canslim@lists.xmission.com<BR><B>Subject:</B> Re: [CANSLIM] Today's =
IBD "Big=20
Picture" comments...<BR><BR></FONT></DIV>
<DIV>Hi Bill,</DIV>
<DIV> </DIV>
<DIV>You've brought up an excellent issue and that is "what *is* =
CANSLIM"? I=20
think reading HTMMIS is a lot like reading the Bible. Each person =
can read=20
the same text, the same translation, and they will come away with a=20
different interpretation of "what it means." I reread HTMMIS =
constantly,=20
seeing new passages and new points of view given my new experiences =
over=20
time. In the last couple of years I've come to believe that there is =
a core=20
set of "golden rules" at the heart of CANSLIM that are universal to =
the=20
style, but the implementation of those golden rules may be different =
from=20
one person to the next. Contrary to DanF's point of view, I don't =
see IBD as=20
"jerking our chain" but instead see this as proof of my point of =
view. That=20
is, even within the IBD (and CANSLIM), there are seeming =
contradictions.=20
Their 20 points will say one thing, but they will give examples of =
winning=20
stocks that demonstrate exceptions. Bottom line for me is that =
there's a big=20
difference between "restrictive rules" and "general guidelines" and =
there's=20
no substitute for understanding the core concepts that make up the =
CANSLIM=20
style. For example, in a secular Bull where nearly every stock is in =
an=20
uptrend and above the 200dMA, the biggest task is to pick "the best" =
of=20
those going up. During downtrending or sideways markets, the first =
task is=20
to identify those stocks/groups that are technically superior, and =
then,=20
within those groups to find the best fundamental stories. The =
difference=20
between those 2 markets is simply that the risk of being wrong in a =
secular=20
bull vs downtrending/sideways markets is smaller, so the tuition for =
making=20
errors is smaller. But the tuition is *always* there, just more =
severe and=20
obvious in tougher markets.</DIV>
<DIV> </DIV>
<DIV>This is how I'd express the "core spirit of CANSLIM":</DIV>
<DIV> </DIV>
<DIV>-Use technical strength to draw your eye to stocks that are =
working.=20
This can be expressed by relationship to intermediate term moving =
averages=20
(50/200 day MA's), rising RS, new highs, accumulation/distribution, =
up/down=20
ratios, strong groups, increasing institutional ownership, strong =
style=20
subsectors of the market, etc. Make purchases only on appropriate =
technical=20
patterns.</DIV>
<DIV>-Select only stocks with superior forward growth estimates. =
Yes,=20
estimates can be wrong, but if the technicals are also strong, at =
least the=20
market is confirming this expectation (for the moment). Confirm =
these=20
estimates with appropriate due diligence so that you =
understand=20
what makes this growth possible.</DIV>
<DIV>-Select only stocks with superior financials. That means not =
only a=20
demonstrated ability to grow earnings and revenues, but financial =
stability=20
that will allow them to weather the tough times and/or continue =
their=20
strategy for continued growth. That means a strong balance sheet, =
sufficient=20
cash flow, excellent returns on equity invested, etc.</DIV>
<DIV>-Select only stocks with sufficient liquidity to allow easy =
entry/exit=20
when the time is right technically.</DIV>
<DIV>-Preserve capital above all else. When you make a mistake, move =
on and=20
reinvest the remaining capital in what *is* working.</DIV>
<DIV>-Know how to read a chart so that you can exit and keep profits =
at the=20
appropriate time. In secular bull markets, you can ride out =
consolidations=20
knowing that there is a greater likelihood that the same stocks and =
groups=20
will continue their upward trek. In downtrending/sideways markets, =
you=20
cannot afford to sit through the consolidation because the risk that =
the=20
stock/sector/style will fall out of favor is greater. Step aside as =
the=20
consolidation starts, move to strength elsewhere, come back when/if =
the=20
consolidation ends and continues upward. If a secular bull starts =
again,=20
you'll be in the right stocks already and can just ride them =
longer.</DIV>
<DIV>-Know how to identify and track a group of stocks that gives =
you the=20
"pulse of your market." If the pulse is poor, stand aside or learn =
to short=20
them as they fail.</DIV>
<DIV>-Always do post analysis and use successes and failures as =
building=20
blocks to becoming a better investor. Be honest about what you are =
doing=20
right or wrong. It's just like budgeting or dieting. Obviously, if =
you're=20
gaining weight or saving less than your plan, you need to change=20
something.</DIV>
<DIV> </DIV>
<DIV>Katherine</DIV>
<DIV> </DIV>
<DIV>----- Original Message ----- </DIV>
<BLOCKQUOTE=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A title=3Dbtriffet@earthlink.net =
href=3D"mailto:btriffet@earthlink.net">Bill=20
Triffet</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A=20
title=3Dcanslim@lists.xmission.com=20
href=3D"mailto:canslim@lists.xmission.com">canslim</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Wednesday, May 01, =
2002 11:12=20
AM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> [CANSLIM] Today's =
IBD "Big=20
Picture" comments...</DIV>
<DIV><BR></DIV>Well friends, it seems that today's IBD confirms =
what I've=20
thought about the<BR>M in canslim - It's not necessarily based on =
the=20
readings of the three major<BR>market indexes ( a big departure =
from=20
HTMMIS).<BR><BR>I'm paraphrasing the last three paragraphs of "The =
Big=20
Picture"(there are<BR>stiff copyright disclaimers at =
IBD):<BR><BR>It will=20
take a few days to see if the rotation BACK into the Dow, Naz,=20
and<BR>S&P is valid. There should be a big move in heavier =
volume by=20
the end of the<BR>week to confirm it.<BR><BR>It goes on to say =
it's a=20
"nonissue" for growth investors since small and<BR>mid-cap stocks =
along=20
with medical, consumer and defense are doing well<BR>despite the =
big=20
averages. If they hold up, it says, the major averages=20
could<BR>improve.<BR><BR>Also mentions "careful trading" with =
tight loss=20
cutting is key.<BR><BR>My point? IMHO, IBD is marketed for many =
types of=20
investors. Pure canslim<BR>(if there is such a thing) is just one =
of=20
them.<BR><BR>I think perhaps it's time for me to look at growth =
investing=20
with a canslim<BR>approach. I'm starting to see several here have =
done=20
this to great success<BR>(though with very close watching). =
Including=20
things such as a lower but<BR>advancing RS as opposed to just a =
high=20
rating and not be afraid to jump into<BR>stocks in an upwards =
trending=20
sector though the market is flat or down IF<BR>they have good=20
fundies.<BR><BR>Several times this and last year I saw stocks and =
groups=20
moving ahead but<BR>stayed out due to the major indexes downward =
trend.=20
Comments?<BR><BR>Btw, for Fred, it suggests there's heavy =
distribution out=20
of gold and<BR>precious metals by investors.<BR><BR>Bill=20
Triffet</BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE></BODY></HTML>
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