Re: [CANSLIM] New using DGO

From: Chazmoore@aol.com
Subject: Re: [CANSLIM] New using DGO
Date: Sun, 19 May 2002 17:50:09 EDT

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Marty:
By setting your minimums so high you have missed stocks that are on the move
upward. Try setting the EPS at 75 or 80. Move the RS down to maybe 70. I like
Industry groups 75 and above, but you can go down to 60.

I do not know of any rule regarding management ownership versus the public,
other than that it is desirable for management to have a vested interest in
the company. On the flip side if most of the company is owned by management,
they are in a position to manipulate the stock price.

I like to see the ROE about 15 to 20%. Some use 17% as a minimum but this may
eliminate companies in the midst of a rapid turnaround, so I lower the bar a
bit.

No debt means the company is generating enough income to finance the assets,
and this is very good. When the cost of borrowing is low, like it is now,
then some debt is good because the assets generate income more than necessary
to cover the cost of debt and contribute to the return. Excess debt is
usually not good. Some feel more than 30% debt bears watching. Try to find
out why the debt load is high. I tend to accept higher debt due to an
acquisition, if it appears the acquisition can generate the income to cover
the debt.

I don't place a lot of significance on the u/d ratio, but more up than down
is desirable. I am more interested in a sudden increase in upward trading
volume.

WON says that a desirable Earnings Stability would be 20 and under. I think
you will find this has been hard for most to achieve in a bear market.

I didn't try to answer all of your questions but this should get you started.
May I suggest you keep reading the postings at this site? You will learn
rather quickly who the experienced investors are and their wisdom is
priceless.

Charley

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<HTML>Marty:
 By setting your minimums so high you have missed stocks that are on the move upward. Try setting the EPS at 75 or 80. Move the RS down to maybe 70. I like Industry groups 75 and above, but you can go down to 60.
 
 I do not know of any rule regarding management ownership versus the public, other than that it is desirable for management to have a vested interest in the company. On the flip side if most of the company is owned by management, they are in a position to manipulate the stock price.
 
 I like to see the ROE about 15 to 20%. Some use 17% as a minimum but this may eliminate companies in the midst of a rapid turnaround, so I lower the bar a bit.
 
 No debt means the company is generating enough income to finance the assets, and this is very good. When the cost of borrowing is low, like it is now, then some debt is good because the assets generate income more than necessary to cover the cost of debt and contribute to the return. Excess debt is usually not good. Some feel more than 30% debt bears watching. Try to find out why the debt load is high. I tend to accept higher debt due to an acquisition, if it appears the acquisition can generate the income to cover the debt.
 
 I don't place a lot of significance on the u/d ratio, but more up than down is desirable. &nbsp;I am more interested in a sudden increase in upward trading volume.
 
 WON says that a desirable Earnings Stability would be 20 and under. I think you will find this has been hard for most to achieve in a bear market.
 
 I didn't try to answer all of your questions but this should get you started. May I suggest you keep reading the postings at this site? You will learn rather quickly who the experienced investors are and their wisdom is priceless.
 
 Charley</HTML>

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