RE: offlist--Re: [CANSLIM] Q: Accelerating growth

From: "Mike Gibbons" <mikegibbons@proactech.com>
Subject: RE: offlist--Re: [CANSLIM] Q: Accelerating growth
Date: Thu, 2 May 2002 10:37:08 -1000
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Top of Thread: RE: offlist--Re: [CANSLIM] Q: Accelerating growth Fanus
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Hi Fanus,

We agree on your vehicle analogy: velocity is rate of change of distance and
acceleration is rate of change of rate of change of distance. The underlying
quantity being measured is distance.

However if growth is the underlying quantity to be measured, then we have
velocity is rate of change of growth and acceleration is rate of change of
rate of change of growth.

For (positively) accelerating growth we need the second derivative of growth
to be positive.

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 Fanus
Sent: Thursday, May 02, 2002 10:20 AM
To: canslim@lists.xmission.com
Subject: RE: offlist--Re: [CANSLIM] Q: Accelerating growth


Mike

Here is my take on it.

Acceleration = rate of change of velocity.
In other words, something accelerates if it is
changing its velocity. (notice the definition doesn't
say velocity should be higher each time. It just say
there should be a change in velocity)

To use your example below. 8% to 35% to 57%.  From 8%
to 35% the velocity change was  27% upwards. It
accellerating from 8% to 35% because it changed the
velocity.  Next quarter the velocity changed again
with 22% upwards. So, by definition since the velocity
changed, it accelerated once again.

Was the velocity less the 2nd quarter than the first?
Yes.  But by definition that doesn't matter, since
velocity changed and this is what aceleration is:
Change in velocity in the same direction.  So there
was acceleration even though velocity was less.  As
long as velocity change you have acceleration.

Another example.  Driving a car at 10mph.  Accellerate
to 20mph. Change of velocity was 10. If you increase
your speed now to 25mph, you still accelerated even
though velocity change was only 5 this time. If you
didn't accelerate to get to 25mph, how did you get
there then?

- - Fanus

- --- Mike Gibbons <mikegibbons@proactech.com> wrote:
> I think you meant
>
> velocity = rate of change of distance + direction
> acceleration = rate of change of velocity
>
> So, the underlying quantity being measured is sales
> (equivalent to distance)
> growth in sales per quarter is equivalent to
> velocity
> rate of change of growth per quarter is acceleration
> of growth.
>
> 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: Thursday, May 02, 2002 9:34 AM
>   To: canslim@lists.xmission.com
>   Subject: offlist--Re: [CANSLIM] Q: Accelerating
> growth
>
>
>   I might be all wrong here, but I think what you've
> calculated is velocity
> rather than acceleration.
>
>   Acceleration = rate of change
>   Velocity = rate of change of the rate of change +
> direction
>
>   Katherine
>     ----- Original Message -----
>     From: Mike Gibbons
>     To: canslim@lists.xmission.com
>     Sent: Thursday, May 02, 2002 2:24 PM
>     Subject: [CANSLIM] Q: Accelerating growth
>
>
>     I've often seen WON and IBD refer to the need
> for "accelerating growth".
>     Strictly speaking, that means that the *rate of
> change* of growth should
> be
>     positive.
>
>     In yesterday's Investor's Corner they said of
> PHA, "At the time,
> earnings
>     growth was accelerating (8% to 35% to 57%)". So
> the change in growth was
>     from 8% to 35% (27%) to 35% to 57% (22%). So the
> *rate of change* of
> growth
>     was 22 - 27 -> -5. That is, growth was
> decelerating not accelerating
>
>     Now as a physics major, I may be too picky, but
> I believe that language
>     should be used correctly or it loses its value.
> It seems to me that what
>     they mean is "earnings growth was increasing".
>
>     In that case the WON rule that says that "sales
> growth should be
>     accelerating" needs to be restated to "sales
> growth should be
> increasing".
>
>     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 Warren Keuffel
>     Sent: Thursday, May 02, 2002 7:55 AM
>     To: canslim@lists.xmission.com
>     Subject: Re: [CANSLIM] IBD's Industry Group and
> Ticker Symbol Index
>
>
>     If you intend to pursue a group-oriented
> strategy, and you intend to use
>     IBD's 197 industry group tables, the book is
> indispensible because it's
>     not always obvious which companies are assigned
> to which industry
>     groups. I'm using Vector Vest now, which has its
> own industry groupings,
>     so I no longer buy the IBD books.
>
>     HTH.
>     Warren
>
>     rolf hertenstein wrote:
>
>     >Hello all -
>     >
>     >Could anyone who has used this guide in the
> past
>     >tell me if they
>     >indeed found it useful?  I'll likely wait for
> the
>     >next issue due in June
>     >in any case.
>     >
>     >Thanks!
>     >
>     > Rolf
>     >
>     >
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