Re: Pearl of Wisdom (was [CANSLIM] CCR - I offer this up for dissection)

From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: Pearl of Wisdom (was [CANSLIM] CCR - I offer this up for dissection)
Date: Tue, 13 Aug 2002 10:24:38 -0400
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Kelly, while the market has always been one of the purest forms of supply
and demand dynamics, it is first and foremost controlled by human emotion.
Systems such as CANSLIM introduce a certain degree of mechanical aspects,
but our interpretation of what we see and hear, particularly with regard to
"M", remains very human, and emotional in our response.

If you have never studied human psychology, then you should, especially Herd
Mentality. It is routinely seen in the marketplace. I lost a lot of money
arguing with the markets over the outstanding fundamentals of stocks that
were out of favor. Bottom line, if the market doesn't like it, then it's not
going to perform up to expectations.

And that's why looking at trailing PE ratios is a waste of time, they are
merely history, no one is likely to react to them. On the other hand,
forecasts / projected PE ratios can create a sense of expectation, hence
drive the price to where the stock trades at a premium based on that
expectation.

Right now, with fears of recession, terrorism, economy weak and not
recovering, corp profits very weak and may not recover as fast as expected,
the "M" is disconnected from its fundies. If the economic recovery, and
thereby corp profits, do in fact improve long term, the day will come when
the expectations will shift from negative to positive, and the markets will
start a new bull market. And that will be because sentiment (human
psychology) shifts to bullish from bearish.

- ----- Original Message -----
From: "Kelly Short" <kelly.short@tx.us.neoris.com>
To: <canslim@lists.xmission.com>
Sent: Tuesday, August 13, 2002 10:01 AM
Subject: RE: Pearl of Wisdom (was [CANSLIM] CCR - I offer this up for
dissection)


Nancy,

Believe me when I tell you that your words of thanks are misdirected! The
true Pearls of Wisdom came from several group members- but none of them by
the name of Kelly. I too was the recipient, not sender, of such wisdom. I
believe Winston expelled most of these pearls and I too would like to know
where he would get such information to answer Question #4. So- not to pass
the buck- but..... Winston???? Any other Pearls hiding beneath the shell?
Katherine? Fred? Duke? Tom? The rest of the M.O.B. Squad?

And Nancy- thank you for the praise! It felt great if only for a fleeting
moment!

Kelly

- -----Original Message-----
From: NANCY POLCARO [mailto:zillagirl@msn.com]
Sent: Monday, August 12, 2002 6:57 PM
To: canslim@lists.xmission.com
Subject: Re: Pearl of Wisdom (was [CANSLIM] CCR - I offer this up for
dissection)


Kelly-catching up on myt mail also-I thought your presentation was really
good-I wish I was that far right now.  Can you tell me where you got your
info? IBD? Daily Graphs?  Other source? Thanks nancy


>From: "Duke Miller" <dukemill@tampabay.rr.com>
>Reply-To: canslim@lists.xmission.com
>To: <canslim@lists.xmission.com>
>Subject: Pearl of Wisdom (was [CANSLIM] CCR - I offer this up for
>dissection)
>Date: Sun, 11 Aug 2002 09:33:54 -0400
>
>Winston, et al:
>
>I'm catching up with my backlog of CANSLIM list messages, and a thought
>just occurred to me after reading Winston's reply to Kelly below.  (Sans
>header I would have surely assumed it was Katherine's response!)
>
>Your point #4 is a true Pearl of Wisdom--I.e., it provokes further
>thought, and is what I call an "a-ha".   The reason?  How bombarded we
>are with information and desktops riddled with shortcuts to investment
>net "tools."   But when it's all said and done--technicals,
>fundamentals, charts, ratings, etc.--spending time in thought about how
>will the rest of the market...react to the point or issue and how
>soon--is what it's all about, isn't it?  You can't measure it, you can
>accurately predict it, can't touch it, can't feel it.  But if the
>response to that question is not, albeit in you gut, positive, you
>shouldn't touch it, should you?
>
>Thank you for that.
>
>Duke
>
>
>  -----Original Message-----
>From: owner-canslim@lists.xmission.com
>[mailto:owner-canslim@lists.xmission.com] On Behalf Of Winston Little
>Sent: Friday, August 09, 2002 12:15 PM
>To: canslim@lists.xmission.com
>Subject: Re: [CANSLIM] CCR - I offer this up for dissection
>
>
>
>Kelly:
>My hope is that the note was of some help, but please keep the following
>in mind:
>1. The goal is neither to whip or throw you back into the pond.
>2. ALWAYS QUESTION anything that is said or stated.... do you agree with
>the point or issue stated or asked?
>3. If you agree with the point, then is what is the significance of the
>point or issue? The point may be true but of little value.
>4. How will the rest of the market traders/investors/or others  react to
>the point or issue, and how soon?
>Depending on the results of  the evaluate the points above (or others),
>you may then want to respond and show the other person a different
>perspective.
>
>
>----- Original Message -----
>From: Kelly Short <mailto:kelly.short@tx.us.neoris.com>
>To: canslim@lists.xmission.com
>Sent: Friday, August 09, 2002 11:22 AM
>Subject: RE: [CANSLIM] CCR - I offer this up for dissection
>
>Winston,
>
>You give me new understanding of DD. After reading your email I whip
>myself for not investigating further before posting. Back to the newbie
>pond for me. I feel like those Snakehead fish in Maryland- so close to
>making it from the pond to the big river, then the big bad human ("M")
>comes and throws me back in the pond. Thanks for your observations- I'll
>keep hacking away.
>
>Kelly
>  -----Original Message-----
>From: Winston Little [mailto:wlittle1@peoplepc.com]
>Sent: Thursday, August 08, 2002 4:31 PM
>To: canslim@lists.xmission.com
>Subject: Re: [CANSLIM] CCR - I offer this up for dissection
>
>
>
>Kelly:
>A few comments:
>1. Chart pattern:
>If cup-with handle (start 27 May, end 01 Aug) then the shape is V-Cup
>which is not ideal.
>2. Handle is 2 days long (minimum desired is five days) on 03 and 05
>Aug.
>3. Heavy volume in handle (again undesirable)
>4. Breakout volume on 06 Aug was 166% of average daily = ok.
>5. Debt to equity ratio = 4.3 This may be a bit high, as others in the
>top five of the IBD group were at 0.98, 0.18 and 0.83. The one exception
>was the government sponsored agency FRE (Freddie Mac) at 31.
>6. Largest concern was roll off in revenue in Q2 of 2002 to $$998
>million, was $1233 in Q1, N/A in Q4 of 200, $1272 in Q3 of 2001, $1234
>in Q2 of 2001 etc.  Surprisingly the eps reported in Q2 of 2002 was
>highest at $1.48 up from $1.32 in Q1 of 2002. Does this imply there may
>be a re-statement in the works as day of reckoning approaches for CEO
>and CFO?
>CCR is believed to be a sub-prime lender. Does this mean difficulty as
>the slow economy persists and consumers start to run out of cash?
>
>----- Original Message -----
>From: Kelly Short <mailto:kelly.short@tx.us.neoris.com>
>To: canslim@lists.xmission.com
>Sent: Thursday, August 08, 2002 4:50 PM
>Subject: [CANSLIM] CCR - I offer this up for dissection
>
>CCR - Countrywide Cr Inds Inc
>
>EPS growth could be better but are we more forgiving over the past 3
>qtrs (after all- CCR is positive EPS growth for past 3 qtrs which in
>itself is an accomplishment)? Appears to be coming out of CWH formation
>(all though not as beautiful a formation as the Mona Lisa or anything
>IBD would show us). Thoughts?
>
>
>IBD Ratings
>Smart Select 99
>EPS Rating 94
>RPS 89
>Industry Group Rank A
>S+P M+ROE A
>A/D A+
>
>
>Technical Rating 98
>Fundamental Rating 96
>Attractiveness Rating 99
>Group's Technical Rating 79
>Group's Fundamental Rating 86
>
>
>
>Rank within Industry Group
>Industry Rank (08/08/02) 32
>
>Overall 100
>Technical 100
>Fundamental 91
>Attriveness 100
>Top 5 Companies w/in Group
>
>
>
>CCR
>
>
>
>DORL
>
>
>
>NCEN
>
>
>
>NDE
>
>
>
>FRE
>Group % Chg to Date 2%
>Group % Chg Last 12 mths 4%
>Group % Chg Last 4 weeks 4%
>
>
>Performance
>
>Up/Down Vol 1.3
>3 Yr. EPS Growth 16%
>3 Yr. Sales Growth 25%
>EPS Growth (Quarterly) % Chg
>Qtr -1 $0.64 5%
>Qtr -2 $0.61 8%
>Qtr -3 $0.56 5%
>Qtr -4 $0.53 8%
>Qtr -5 $0.49 0%
>Qtr -6 $0.49
>
>Revenue Growth
>Qtr -1 293,159 3%
>Qtr -2 285,799 1%
>Qtr -3 283,199 1%
>Qtr -4 281,332 3%
>Qtr -5 272,860 0%
>Qtr -6 272,489
>
>   _____
>
>For your protection, this e-mail message has been scanned for viruses.
>
>Visit us at http://www.neoris.com/
>
>   _____
>
>
>
>




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