Re: [CANSLIM] management rankings

From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] management rankings
Date: Thu, 2 May 2002 21:39:17 -0400
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Hi Peter, and welcome to the group. You must find it somewhat difficult =
with your time zone upside down from ours?

Your final question, who are some of the great CEO's suggests to me that =
if they are well known, then they are also at a very large cap company, =
and by and large this is not a good market for large caps. That will =
change at some point, and the estimated three trillion dollars sitting =
on the sidelines will flow back in.

But from a CANSLIM perspective, while their price may improve, that =
doesn't prove leadership. And the big, well known names from past years =
(one good current example being Worldcom, who's bonds are trading at 50 =
cents on the dollar and signaling default / bankruptcy in the future) =
are not likely to be the leaders in the next few years at least.

It is nearly impossible to quantify or analyze quality of management. I =
would try finding entrepreneur companies, innovative, leaders in their =
niche, and highly competitive. See if sales are growing in a slowing =
economy last year. See if they are increasing profits, and profit =
margins, at the same time. See if their acquisitions make good business =
sense, and are fairly priced.

Tom Worley
stkguru@bellsouth.net
AIM: TexWorley
- ----- Original Message -----=20
From: webster=20
To: canslim@lists.xmission.com=20
Sent: Thursday, May 02, 2002 8:11 PM
Subject: [CANSLIM] management rankings


Hi everyone this is my first Post.

I apologize in advance if this topic has been covered recently.

I have developed an interest in quality of management(havent we all in =
this environment) But I am trying to find sources of information =
regarding this- whether it be informed debate or industry rankings or =
whatever.
I am hoping a forum such as this has more than its fair share of =
fundamental investors that can help me on my quest.

It seems to me that excellent management will eventually lead to =
positive results (assuming that they are not in a dying industry) That =
being said timing is important as well.
I have for a long time concentrated on TA for timing decisions but not =
as a day trader eg I use weekly charts a lot!=20

I am not an ego driven trader/investor- I do not have to be "right " but =
anyone who has read Van Tharps book "trade your way to financial =
freedom" will know that even a 10% win loss ratio can be very successful =
as long as your average winners are big enough and your losses small =
enough in comparison.

This is where my concerns about management quality comes in. In this =
whipsaw type of market even solid stocks are being punished. So it is =
quite concievable that your stock selection can see you invest in a =
great company at a reasonable(not overextended price) only to see your =
stock plummet 20% or more.
With the ability to have your losers at 20% our winners must be much =
bigger to stay in front. Unless of course you trust your stock picking =
to be 100% right and then you dont have any losers! (Unforunately that =
is not me!) I believe we have to have a get out point even if you are an =
investor and not a trader.  So back to management quality. Any company =
can have a bad quarter or two due to bad luck or economic (external) =
reasons. The key to whether we should invest in these devalued stocks is =
whether we can believe what management says about future prospects etc. =
We all can relate to a stock we have in hindsite held too long on the =
way down, based on the soothing words of management at the time of the =
distribution phase. As an Australia investor there are some well known =
examples- Pasminco(Mining) HIH(insurance) Onetel(telecom)
All were considered well run companies at some stage. All gave investors =
soothing words and all burned the faithful ones big time. Obviously in =
the US Enron, Global crossing, etc are better known examples to you all.

So what are some of the better regarded CEO's why are they considered so =
good?=20

I look forward to hearing some suggestions

Cheers

Peter



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<STYLE></STYLE>
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<BODY bgColor=3D#ffffff>
<DIV><FONT face=3DArial>Hi Peter, and welcome to the group. You must =
find it=20
somewhat difficult with your time zone upside down from =
ours?</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>Your final question, who are some of the great =
CEO's=20
suggests to me that if they are well known, then they are also at a very =
large=20
cap company, and by and large this is not a good market for large caps. =
That=20
will change at some point, and the estimated three trillion dollars =
sitting on=20
the sidelines will flow back in.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>But from a CANSLIM perspective, while their =
price may=20
improve, that doesn't prove leadership. And the big, well known names =
from past=20
years (one good current example being Worldcom, who's bonds are trading =
at 50=20
cents on the dollar and signaling default / bankruptcy in the future) =
are not=20
likely to be the leaders in the next few years at least.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>It is nearly impossible to quantify or analyze =
quality of=20
management. I would try finding entrepreneur companies, innovative, =
leaders in=20
their niche, and highly competitive. See if sales are growing in a =
slowing=20
economy last year. See if they are increasing profits, and profit =
margins, at=20
the same time. See if their acquisitions make good business sense, and =
are=20
fairly priced.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</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=3Dpwebste1@bigpond.net.au =
href=3D"mailto:pwebste1@bigpond.net.au">webster</A>=20
</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> Thursday, May 02, 2002 8:11 PM</DIV>
<DIV><B>Subject:</B> [CANSLIM] management rankings</DIV></DIV>
<DIV><BR></DIV>
<DIV><FONT face=3DArial size=3D2>Hi everyone this is my first =
Post.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial size=3D2>I apologize in advance if this topic =
has been=20
covered recently.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial size=3D2>I have developed an interest in quality =
of=20
management(havent we all in this environment) But I am trying to find =
sources of=20
information regarding this- whether it be informed debate or industry =
rankings=20
or whatever.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2>I am hoping a forum such as this has =
more than its=20
fair share of fundamental investors that can help me on my =
quest.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial size=3D2>It seems to me that excellent =
management will=20
eventually lead to positive results (assuming that they are not in a =
dying=20
industry) That being said timing is important as well.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2>I have for a long time concentrated on =
TA for=20
timing decisions but not as a day trader eg I use weekly charts a lot!=20
</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial size=3D2>I am not an ego driven trader/investor- =
I do not=20
have to be "right " but anyone who has read Van Tharps book "trade your =
way to=20
financial freedom" will know that even a 10% win loss ratio can be very=20
successful as long as your average winners are big enough and your =
losses small=20
enough in comparison.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial size=3D2>This is where my concerns about =
management quality=20
comes in. In this whipsaw type of market even solid stocks are being =
punished.=20
So it is quite concievable that your stock selection can see you invest =
in a=20
great company at a reasonable(not overextended price) only to see your =
stock=20
plummet 20% or more.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2>With the ability to have your losers at =
20% our=20
winners must be much bigger to stay in front. Unless of course you trust =
your=20
stock picking to be 100% right and then you dont have any losers! =
(Unforunately=20
that is not me!) I believe we have to have a get out point even if you =
are an=20
investor and not a trader.&nbsp; So back to management quality. Any =
company can=20
have a bad quarter or two due to bad luck or economic (external) =
reasons. The=20
key to whether we should invest in these devalued stocks is whether we =
can=20
believe what management says about future prospects etc. We all can =
relate to a=20
stock we have in hindsite held too long on the way down, based on the =
soothing=20
words of management at the time of the distribution phase. As an =
Australia=20
investor there are some well known examples- Pasminco(Mining) =
HIH(insurance)=20
Onetel(telecom)</FONT></DIV>
<DIV><FONT face=3DArial size=3D2>All were considered well run companies =
at some=20
stage. All gave investors soothing words and all burned the faithful =
ones big=20
time. Obviously in the US Enron, Global crossing, etc are better known =
examples=20
to you all.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial size=3D2>So what are some of the better regarded =
CEO's why=20
are they considered so good? </FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial size=3D2>I look forward to hearing some=20
suggestions</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial size=3D2>Cheers</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial size=3D2>Peter</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial size=3D2></FONT>&nbsp;</DIV></BODY></HTML>

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