Go to Jeff Salisbury LWGate Home Page.From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] IBD "Bull" Call
Date: Thu, 4 Jul 2002 09:33:52 -0400
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Hi zillagirl,
When you start investing in small and micro cap stocks, you are already =
taking on substantially more risk due lack of liquidity, lack of analyst =
coverage (altho lately that may be a blessing), potential for running =
out of cash and not able to raise new capital, and general lack of =
interest from institutional investors if you also are investing in low =
priced stocks as I do. Low priced stocks can substantially raise your =
risk by the spread representing a higher percentage than with higher =
priced or more liquid stocks.
That said, for my personal investing, I look primarily for stocks =
hitting new highs, this satisfies the "N" of CANSLIM without having to =
do research, and also shows that there is no recent overhang in the =
stock, as well as signaling positive momentum in an otherwise dismal =
downtrending dreary depressing "M". The reports at DGO are of no help to =
me in this, as they are limited to about one fourth of all stocks, only =
including the ones that are in the DG books (a marriage that badly needs =
to be severed now that the books get you no discount). You can get lists =
of stocks hitting new daily highs at most any free site, I use =
CBSMarketWatch as it permits me to screen for price and size so I am =
only then looking at small and micro caps within my price range (up to =
$20 currently).
Because of my personal bias against various sectors, I only look at =
stocks of potential interest. I won't look at banks, for instance. Since =
I am not a group follower, another of my many personal CANSLIM sins, =
this doesn't hurt me. In fact some of my best performing stocks this =
year have been in groups ranked E.=20
When I run my daily lists thru DGO, my first focus is on sequential =
earnings and sales. I am more interested in this than on year over year =
sales, as many lack analysts forecasts, so I am on my own for this. If =
both sales and earnings are increasing logically, sequentially and in =
step, then I can assume continued growth for some time in the future, =
again without any initial research. I, and many other investors, can =
form a mental image of what we expect next quarter, and its easy to =
assess the stock's reaction on what is delivered for results.
My next focus is the chart itself. Many by the time I find them are =
already well extended. Doesn't mean I forget about them, I study the =
prior 12 months to see where I might have found them earlier. I look for =
characteristics, is this a stock that builds a long flat base, then =
explodes. Or is it one that signals volume before a big move. Is it a =
LLUR, where I can buy at anytime? Where would it likely consolidate, or =
correct to, such that I might buy on a dip? At the least, I try to learn =
from it. I also look to see if, even extended, I consider it overvalued =
based on earnings growth, projected PE (my own or analysts), market cap =
to sales ratio, ROE, debt (usually zero or negligible). I also look at =
management holdings vs funds and the float.
All this is just the beginning of finding a new company to add to my =
watch list. Then the due diligence really starts, time permitting.
- ----- Original Message -----=20
From: zillagirl=20
To: canslim@lists.xmission.com=20
Sent: Wednesday, July 03, 2002 12:13 PM
Subject: Re: [CANSLIM] IBD "Bull" Call
That is similar to what I mean. for example an earnings rule for micros =
might be the first quarter a stocks earnings become positive.Example=3D =
Last quarter earnings -.03 , current quarters earnings +.07. This is =
different then the earnings rules on canslim but it is still an earnings =
rule-just like canslim has earnings rules that fit larger cap stocks. =
This is one of the things I find important. I think all the canslim =
rules would have parallels to use on small and micros but if this is =
true we are not taught those rules or given the same info on IBD to =
decipher the stocks. Sorry about the losses-the markets been rough, =
small cap index is starting down recently.
----- Original Message -----=20
From: Tom Worley=20
To: canslim@lists.xmission.com=20
Sent: Wednesday, July 03, 2002 3:44 AM
Subject: Re: [CANSLIM] IBD "Bull" Call
Zillagirl, not sure of your point. I have been using nothing but my =
version of CANSLIM for years, and invested in nothing but small and =
micro caps. I need no other system than CANSLIM, despite the lousy "M" =
we have been having. Granted, I break lots of rules, and it has cost me =
in the past week or so pretty severely, essentially giving up my profits =
for the year due lack of attention and time.
Biggest single difficulty with small and micro caps, aside from a lack =
of liquidity on many if you are buying large positions, is that you =
usually cannot use stop buy or stop sell orders. Most brokers will not =
accept stop orders unless they are NYSE / AMEX listed.
----- Original Message -----=20
From: zillagirl=20
To: canslim@lists.xmission.com=20
Sent: Tuesday, July 02, 2002 10:58 PM
Subject: Re: [CANSLIM] IBD "Bull" Call
I have a theory on small caps,although Im sure some of you are tired =
of hearing from me today.(smile) there is a lot of money to be made in =
the right small caps. I would almost bet IBD does research in all caps =
- -not just the ones he posts on his site. Esp. for small cap mutual =
funds, etc. Some of them have good earnings, new products, the M is on =
their side right now compared to the other indexes. Someone is buying =
these stocks and making a lot of money on them before they ever hit a =
canslim list.(you can buy a lot more shares at 5.00 then with 25.00 =
eventhough the risk is greater)If in this market the risk can be =
greater. I cant help but think that there is a trading system with =
established % on earnings, growth, etc. but it is not available to us. =
And Im sure it would not be with the same criteria as the canslim =
system we are given. Its great to ride a stock from 5 to 15 or 20 =
dollars and then a whole new set of buyers comes in. I could be wrong =
but if the research is done I feel it should be made available to =
us-buyer beware. In this market when small caps seem to have been hit =
the least and canslim seems to be in reverse half the time, we could =
use more then 'one day the market will turn' from IBD.I would like to =
think bill is protecting us from bad investments but as anyone who read =
my posts today can see-my rose colored glasses got broken somewhere. PS =
dont get me wrong I love canslim but its like following the indexes-when =
they drop - you might have to think about shorting.=20
----- Original Message -----=20
From: Tom Worley=20
To: canslim@lists.xmission.com=20
Sent: Tuesday, July 02, 2002 6:15 PM
Subject: Re: [CANSLIM] IBD "Bull" Call
interesting he avoids mentioning the Russell 2000, is it just too =
small for him?
----- Original Message -----=20
From: Katherine Malm=20
To: canslim@lists.xmission.com=20
Sent: Tuesday, July 02, 2002 9:12 PM
Subject: Re: [CANSLIM] IBD "Bull" Call
Hi Jon,
I've often wondered about that same thing as it's certainly not =
obvious there's a Bull market anywhere in sight if looking at the =
Nasdaq, S&P500 or Dow. Here's an interesting "Ask Bill" from today that =
might "explain" their point of view.
--Katherine
Ask Bill O'Neil 7/2/02
=20
Q: Would you classify the period from late Sept. 2001 to Jan. =
2002 as a "bull market" or a "bear-market rally"? =20
- Submitted from Thornhill, Canada =20
=20
A: The bear market is alive and kicking on the Nasdaq. But =
the smaller-cap indexes such as the S&P 600 and S&P MidCap 400 are just =
10% to 11% below their all-time highs. For them, the current decline is =
a correction in a bull market. =20
----- Original Message -----=20
From: J. Lobatto=20
To: canslim@lists.xmission.com=20
Sent: Tuesday, July 02, 2002 8:04 PM
Subject: [CANSLIM] IBD "Bull" Call
I wonder how long IBD is going to continue running that ad I've =
seen there featuring a graphic illustrating how they called the new bull =
market last fall???
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<DIV><FONT face=3DArial>Hi zillagirl,</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>When you start investing in small and micro cap =
stocks,=20
you are already taking on substantially more risk due lack of liquidity, =
lack of=20
analyst coverage (altho lately that may be a blessing), potential for =
running=20
out of cash and not able to raise new capital, and general lack of =
interest from=20
institutional investors if you also are investing in low priced stocks =
as I do.=20
Low priced stocks can substantially raise your risk by the spread =
representing a=20
higher percentage than with higher priced or more liquid =
stocks.</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>That said, for my personal investing, I look =
primarily for=20
stocks hitting new highs, this satisfies the "N" of CANSLIM without =
having to do=20
research, and also shows that there is no recent overhang in the stock, =
as well=20
as signaling positive momentum in an otherwise dismal downtrending =
dreary=20
depressing "M". The reports at DGO are of no help to me in this, as they =
are=20
limited to about one fourth of all stocks, only including the ones that =
are in=20
the DG books (a marriage that badly needs to be severed now that the =
books get=20
you no discount). You can get lists of stocks hitting new daily highs at =
most=20
any free site, I use CBSMarketWatch as it permits me to screen for price =
and=20
size so I am only then looking at small and micro caps within my price =
range (up=20
to $20 currently).</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>Because of my personal bias against various =
sectors, I=20
only look at stocks of potential interest. I won't look at banks, for =
instance.=20
Since I am not a group follower, another of my many personal CANSLIM =
sins, this=20
doesn't hurt me. In fact some of my best performing stocks this year =
have been=20
in groups ranked E. </FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>When I run my daily lists thru DGO, my first =
focus is on=20
sequential earnings and sales. I am more interested in this than on year =
over=20
year sales, as many lack analysts forecasts, so I am on my own for this. =
If both=20
sales and earnings are increasing logically, sequentially and in step, =
then I=20
can assume continued growth for some time in the future, again without =
any=20
initial research. I, and many other investors, can form a mental image =
of what=20
we expect next quarter, and its easy to assess the stock's reaction on =
what is=20
delivered for results.</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>My next focus is the chart itself. Many by the =
time I find=20
them are already well extended. Doesn't mean I forget about them, I =
study the=20
prior 12 months to see where I might have found them earlier. I look for =
characteristics, is this a stock that builds a long flat base, then =
explodes. Or=20
is it one that signals volume before a big move. Is it a LLUR, where I =
can buy=20
at anytime? Where would it likely consolidate, or correct to, such that =
I might=20
buy on a dip? At the least, I try to learn from it. I also look to see =
if, even=20
extended, I consider it overvalued based on earnings growth, projected =
PE (my=20
own or analysts), market cap to sales ratio, ROE, debt (usually zero or=20
negligible). I also look at management holdings vs funds and the=20
float.</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>All this is just the beginning of finding a new =
company to=20
add to my watch list. Then the due diligence really starts, time=20
permitting.</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV style=3D"FONT: 10pt arial">----- Original Message -----=20
<DIV style=3D"BACKGROUND: #e4e4e4; font-color: black"><B>From:</B> <A=20
title=3Dzillagirl@email.msn.com=20
href=3D"mailto:zillagirl@email.msn.com">zillagirl</A> </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> Wednesday, July 03, 2002 12:13 PM</DIV>
<DIV><B>Subject:</B> Re: [CANSLIM] IBD "Bull" Call</DIV></DIV>
<DIV><BR></DIV>
<DIV><FONT face=3DArial size=3D2>That is similar to what I mean. =
for example=20
an earnings rule for micros might be the first quarter a stocks=20
earnings become positive.Example=3D Last quarter earnings -.03 , =
current=20
quarters earnings +.07. This is different then the earnings rules =
on=20
canslim but it is still an earnings rule-just like canslim has earnings =
rules=20
that fit larger cap stocks. This is one of the things I find important. =
I think=20
all the canslim rules would have parallels to use on small and micros =
but if=20
this is true we are not taught those rules or given the same info on IBD =
to=20
decipher the stocks. Sorry about the losses-the markets been =
rough,=20
small cap index is starting down recently.</FONT></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=3Dstkguru@bellsouth.net =
href=3D"mailto:stkguru@bellsouth.net">Tom=20
Worley</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, July 03, 2002 =
3:44=20
AM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] IBD =
"Bull"=20
Call</DIV>
<DIV><BR></DIV>
<DIV><FONT face=3DArial>Zillagirl, not sure of your point. I have been =
using=20
nothing but my version of CANSLIM for years, and invested in nothing =
but small=20
and micro caps. I need no other system than CANSLIM, despite the lousy =
"M" we=20
have been having. Granted, I break lots of rules, and it has cost me =
in the=20
past week or so pretty severely, essentially giving up my profits for =
the year=20
due lack of attention and time.</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>Biggest single difficulty with small and micro =
caps,=20
aside from a lack of liquidity on many if you are buying large =
positions, is=20
that you usually cannot use stop buy or stop sell orders. Most brokers =
will=20
not accept stop orders unless they are NYSE / AMEX =
listed.</FONT></DIV>
<DIV> </DIV>
<DIV style=3D"FONT: 10pt arial">----- Original Message -----=20
<DIV style=3D"BACKGROUND: #e4e4e4; font-color: black"><B>From:</B> <A=20
title=3Dzillagirl@email.msn.com=20
href=3D"mailto:zillagirl@email.msn.com">zillagirl</A> </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> Tuesday, July 02, 2002 10:58 PM</DIV>
<DIV><B>Subject:</B> Re: [CANSLIM] IBD "Bull" Call</DIV></DIV>
<DIV><BR></DIV>
<DIV><FONT face=3DArial size=3D2>I have a theory on small =
caps,although Im sure=20
some of you are tired of hearing from me today.(smile) there is =
a lot of=20
money to be made in the right small caps. I would almost bet IBD does =
research=20
in all caps -not just the ones he posts on his site. Esp. for =
small cap=20
mutual funds, etc. Some of them have good earnings, new products, the =
M is on=20
their side right now compared to the other indexes. Someone is =
buying=20
these stocks and making a lot of money on them before they ever hit a =
canslim=20
list.(you can buy a lot more shares at 5.00 then with 25.00 =
eventhough=20
the risk is greater)If in this market the risk can be greater. I cant =
help but=20
think that there is a trading system with established % on earnings, =
growth,=20
etc. but it is not available to us. And Im sure it would not =
be =20
with the same criteria as the canslim system we are given. =
Its=20
great to ride a stock from 5 to 15 or 20 dollars and then a whole new =
set of=20
buyers comes in. I could be wrong but if the research is done I feel =
it should=20
be made available to us-buyer beware. In this market when small =
caps=20
seem to have been hit the least and canslim seems to be in =
reverse half=20
the time, we could use more then 'one day the market will turn' from =
IBD.I=20
would like to think bill is protecting us from bad investments but as =
anyone=20
who read my posts today can see-my rose colored glasses got broken =
somewhere.=20
PS dont get me wrong I love canslim but its like following the =
indexes-when=20
they drop - you might have to think about shorting. </FONT></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=3Dstkguru@bellsouth.net =
href=3D"mailto:stkguru@bellsouth.net">Tom=20
Worley</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>=
=20
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Tuesday, July 02, 2002 =
6:15=20
PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] IBD =
"Bull"=20
Call</DIV>
<DIV><BR></DIV>
<DIV><FONT face=3DArial>interesting he avoids mentioning the Russell =
2000, is=20
it just too small for him?</FONT></DIV>
<DIV> </DIV>
<DIV style=3D"FONT: 10pt arial">----- Original Message -----=20
<DIV style=3D"BACKGROUND: #e4e4e4; font-color: black"><B>From:</B> =
<A=20
title=3Dkmalm@earthlink.net =
href=3D"mailto:kmalm@earthlink.net">Katherine=20
Malm</A> </DIV>
<DIV><B>To:</B> <A title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
=20
</DIV>
<DIV><B>Sent:</B> Tuesday, July 02, 2002 9:12 PM</DIV>
<DIV><B>Subject:</B> Re: [CANSLIM] IBD "Bull" Call</DIV></DIV>
<DIV><BR></DIV>
<DIV>Hi Jon,</DIV>
<DIV> </DIV>
<DIV>I've often wondered about that same thing as it's certainly not =
obvious=20
there's a Bull market anywhere in sight if looking at the Nasdaq, =
S&P500=20
or Dow. Here's an interesting "Ask Bill" from today that might =
"explain"=20
their point of view.</DIV>
<DIV> </DIV>
<DIV>--Katherine</DIV>
<DIV> </DIV>
<DIV>
<TABLE cellSpacing=3D0 cellPadding=3D0 width=3D"80%" border=3D0>
<TBODY>
<TR>
<TD vAlign=3Dtop colSpan=3D2><FONT size=3D2>
<H2 class=3Dtxthead>Ask Bill O'Neil 7/2/02</H2><!--<span =
class=3D"sub"><b>Sponsored By Your =
Company</b></span><br>--> </FONT></TD><!--<td align=3D"center" =
rowspan=3D"3" class=3D"txtsubxsml"><font size=3D"1">
<a href=3D"../about/WJO.asp"><img src=3D"../images/staWJO2.gif" =
width=3D"59" height=3D"85" border=3D"0" alt=3D"William J. O'Neil"><br>
<u>William J. O'Neil</u></a><br>
<nobr>Chairman & Founder<br>
Investor's Business Daily</nobr></font></td>--></TR>
<TR>
<TD class=3Dcopy vAlign=3Dtop><FONT size=3D2> Q: Would you =
classify the=20
period from late Sept. 2001 to Jan. 2002 as a "bull market" or =
a=20
"bear-market rally"? </FONT></TD>
<TD> </TD></TR>
<TR>
<TD class=3Dcopy vAlign=3Dbottom align=3Dright><FONT=20
size=3D2><B><I>- Submitted from</I></B>=20
<B><I>Thornhill,</I></B> <B><I>Canada</I></B> </FONT></TD>
<TD> </TD></TR>
<TR>
<TD class=3Dcopy vAlign=3Dtop colSpan=3D2><FONT =
size=3D2> <BR>
<SCRIPT language=3DJavaScript>
<!--
OAS_AD('www.investors.com/AskBill250', 'x17');
//-->
</SCRIPT>
<SCRIPT language=3DJavaScript1.1=20
=
src=3D"http://oascentral.investors.com/RealMedia/ads/adstream_jx.ads/www.=
investors.com/AskBill250/1567613433@x17?_RM_HTML_TARGET_=3D_blank"></SCRI=
PT>
A:<A=20
=
href=3D"http://oas-central.realmedia.com/RealMedia/ads/click_lx.ads/www.i=
nvestors.com/AskBill250/124150637/x17/Investors/BCN2002050034_Cyber_250x2=
50/chess250x250.gif/34323230333035613363363331613030"=20
target=3D_blank></A> The bear market is alive and kicking on =
the Nasdaq.=20
But the smaller-cap indexes such as the S&P 600 and =
S&P MidCap=20
400 are just 10% to 11% below their all-time highs. For them, =
the=20
current decline is a correction in a bull market.=20
</FONT></TD></TR></TBODY></TABLE></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=3Djlobatto@nyc.rr.com =
href=3D"mailto:jlobatto@nyc.rr.com">J.=20
Lobatto</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@lists.xmission.com</A>=
=20
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Tuesday, July 02, =
2002 8:04=20
PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> [CANSLIM] IBD =
"Bull"=20
Call</DIV>
<DIV><BR></DIV>
<DIV><FONT face=3DArial color=3D#0000ff size=3D2>I wonder how long =
IBD is going=20
to continue running that ad I've seen there featuring a graphic=20
illustrating how they called the new bull market last=20
=
fall???</FONT></DIV></BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE></BODY></HTML>=
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