Re: [CANSLIM] Re: Retstatement of CANSLIM?

From: Spencer48@aol.com
Subject: Re: [CANSLIM] Re: Retstatement of CANSLIM?
Date: Wed, 26 Jun 2002 22:12:12 EDT

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Fanus:

     My point-and it is just an opinion- was just to point out a fact (not to 
make an implication that only technical chart reading can now to be used 
safely.)

     However, I believe you are right.  Of all publically traded stock 
companies, 99% are probably as pure as Ivory Soap.  However, the question 
becomes which are the 1%.  Taking your assumption of 10,000, 1% of that 
leaves 100 companies to avoid.  But which are they?  And since it is not 
possible to know what companies are keeping inaccurate records before they 
are uncovered, one wonders is it wise to pay attention to the fundamentals of 
earnings and cash-flow?

     Katherine, in "Suitable for Framing", sent some "Big Picture" passages 
that are pertinent to this discussion..  The companies that have been 
discovered as having bogus financial records are the same companies whose 
charts have fallen apart.  This, I suppose then, is the way to spot these 
companies.  After all, the CANSLIM investor is not interested primarily in 
uncovering"accounting fraud"; his/her first concern is to find a stock that 
looks as if it is a winner.  

jans

     


In a message dated 6/26/2002 4:54:48 PM Eastern Daylight Time, 
fanus13@yahoo.com writes:

<< So, you are saying throw away the fundamentals and
 trade only on the technicals?
 There are probably close to 10000 public traded
 companies and just because a handful of companies
 committed fraud and use creative accounting, does that
 mean the other 99% are also just as bad?   This is
 like saying because a small fraction of the population
 is in prison, this mean all people are criminals.
 
 - Fanus >>

In a message dated 6/26/02, Katherine Malcolm writes:  

<<From this evening's Big Picture at Investors.com:

"Stocks such as Enron, ImClone (IMCL), Tyco (TYC) and WorldCom have shaken 
investor confidence. But there was no reason for growth investors who study 
fundamentals and technicals to be caught in these downdrafts. Long before the 
headlines turned nasty, these and other infamous stocks had broken down from 
established uptrends. You just don't see scandals hitting leading stocks from 
out of the blue.

WorldCom peaked in June 1999 after failing to break out successfully from a 
late-stage base. End of story for growth investors. The stock slid as its 
fundamentals deteriorated. It never presented another buying opportunity if 
your criteria include superior fundamentals, a strong industry group and a 
sound price base.

So while the SEC issues press releases expressing its outrage over WorldCom, 
the ultimate safety net is your own knowledge and discipline to follow a set 
of good trading rules."



- --Amen.

Katherine>>

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