Re: [CANSLIM] Which One Is Better - Updated

From: Spencer48@aol.com
Subject: Re: [CANSLIM] Which One Is Better - Updated
Date: Sun, 25 Aug 2002 21:20:45 EDT

Next Article (by Subject): Re: [CANSLIM] XRAY and CECO Spencer48@aol.com
Previous Article (by Subject): Re: [CANSLIM] for DGO Users (was Fw: Conseco [T20020813002H]) "Tom Worley"
Articles sorted by: [Date] [Author] [Subject]

Katherine:

     Your conclusion is OH so true.  As they say, "statistics lie, and liars 
use statistics".  My point is not that DGO is "venal liar", but that the 
numbers used in the composite rating can certainly be misleading-because the 
composite rating on DGO is just that:  A composite.  

      IBD says time and again that the purchaser shouldn't just buy based on 
ratings (the chart must also be looked at), so IBD's admonition must go 
double for a rating (the composite rating) that is just an average of other 
ratings (some good and some relatively not so good) on which it is based.  
And the more data you pile into the composite ratings, the more likely that 
one of the ratings does not reflect what the comosite seems to say.

     For instance, a composite rating with 15 factors can be a lot more 
misleading than one with 5 factors because one or two of the 15 may not 
reflect the composite rating but because of the number of factors included 
will not weigh that much on the average.   

     In essence, then, I believe the composite rating obscures more than it 
illustrates.  And like a woman's bikini, which may reveal a lot, it hides 
what's essential.

jans




In a message dated 8/12/2002 9:03:44 PM Eastern Daylight Time, 
kmalm@earthlink.net writes:

<< You know, I have a simple solution for this kind of dilemma....don't use 
the numbers. 
 
 I know it's tempting to use a number like this, as it seems to "tell you 
everything" about the stock. But I think once you summarize summary numbers, 
you're asking for trouble. I rank the composite score as "mildly useful."
 
 Here's an example. I'll select a couple of stocks that have come up for 
discussion here in the last few months: WTW and TOL.
 
 Scores?
 WTW = 96
 TOL = 95
 
 Yet, look at the charts. WTW broke out today, TOL is rolling over and 
playing dead. Doesn't sound like a score of 95/96 "tells" me everything I 
need to know about the stocks.
 
 Katherine >>

- -
- -To subscribe/unsubscribe, email "majordomo@xmission.com"
- -In the email body, write "subscribe canslim" or
- -"unsubscribe canslim".  Do not use quotes in your email.

Go to Jeff Salisbury LWGate Home Page.