Re: [CANSLIM] Boomer Babies

From: michael_niemotka@baxter.com
Subject: Re: [CANSLIM] Boomer Babies
Date: Thu, 24 Oct 2002 11:47:08 -0500

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Duke,

Nice analysis. I did download your sheet, and think that you are on to
something. Seems like of late the hardest think I have had to overcome is
being disciplined about creating and maintaining a watchlist. That is part
of the reason that I asked my questions about watchlists last week. We all
have a limited amount of capital, and when you see stocks that you may be
watching breaking out, it is hard to decide which ones to buy, especially
if you would have to sell a laggard to get the capital.

If I can get some time, maybe I can write some code that would allow you to
automate the process of comparing your list to the SOD summary table.

Keep up the good work.

And if you don't mind me asking, do you own any of the stocks on your list?

Mike Niemotka , PE
Sr. Principal Engineer
Baxter Healthcare Corporation
Route 120 & Wilson Road
Round Lake, IL 60073
Tel (847) 270-4075
Fax (847) 270-4525
michael_niemotka@baxter.com

"Duke Miller"
<dukemill@tampabay.rr. To: CANSLIM <canslim@lists.xmission.com>
com> cc:
Sent by: Subject: [CANSLIM] Boomer Babies
owner-canslim@lists.xm
ission.com

10/24/2002 11:16 AM
Please respond to
canslim

The Boomer Babies concept that that I passed on several weeks ago was so
poorly received by this group that I hesitate to bring it up again! I'm
not hurt, I promise. I've never been known to run with the crowd, more
often than not taking Frost's road less traveled.

However, dear friends, I have been doing some analysis on the list that now
contains 84 stocks, and I've discovered and interesting lack of
correlation. Interesting to me, at any rate. I'll explain:

The weekend of October 9, I created a Boomer Babies Watch List portfolio
using the closing price on October 8 as the basis for each stock. As of
yesterday's close, this whole group is up about 4.5%, or over $12,000 if
you'd purchased 100 shares of each. No great shakes.

I thought it would be interesting to indicate on my spreadsheet the dates
any of the stocks appear on IBD's Screen of the Day. At risk of eliciting
a "duh", the assumption is the SODs more than likely feature the better
performing stocks to watch. At least that's what WON often suggests.
Going back to October 3rd's SOD and working forward, I found:

Out of the 84 stocks on the Boomer Babies list, 38 (45%) have made at least
one SOD appearance since 10/3. (The most is 7 appearances by a total of
five of the stocks.)

Sorting the list based on the number of appearances by each stock revealed
stocks that appeared more than five times increased an average of 5.5%;
those appearing one to four times rose less than half that at an average of
2.3%. As for the five that have appeared seven times, they're up a little
over 8%.

But what of the 56 stocks not appearing on a SOD since October 3? Holy
assumption, Batman, they're up an average of 9.3%!! In other words, none
of these stocks appeared in screens ranging from ROE leaders to Total
Composite Ratings.

What does all this prove?

It tells me the Boomer Babies list is producing the kind of prospects I'm
interested in: Solid companies across a broad range of industries that
stand to profit from the aging and eventual retirement of boomers. (The
"solid" is derived from, I think, the fact that all the candidates were
culled from nine months of New America features. A plus for IBD, the
publication.)

However, a) It has prompted me to consider ceasing the downloading every
SOD for future study; b) I intend to follow the progress of each stock with
CANSLIM on my mind, but not obsessively so; c) It has raised a level in
cynicism regarding devotion to analysis of bases, breakouts, etc. Those
narratives are somewhat befuddling and often contradictory at best). Sorry
if that seems blasphemous, but that's my observation(s). It just seems
every time a breakout fails, they can spot the reason, in hindsight, of
course. Same theme, different day.

Have a great weekend.

Duke

PS: It was my intent to post the results of my survey as described above,
citing the specific stocks. But, alas, as some of you know, I received a
certified wrist-spanking from IBD's SS troops after posting a SOD analysis
back in July. Heaven forbid a further possible suspected violation of
IBD's proprietary blah, blah, blah...

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