Re: [CANSLIM] Let's play "Where are they now?"

From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] Let's play "Where are they now?"
Date: Thu, 7 Nov 2002 22:53:53 -0500

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rats, John, you are giving away all my secrets to my personal success. I
much prefer future winners to current winners, looking for the stock that is
producing superb fundies, and shining in its group, while the group remains
way out of favor. Seems most of my best stocks when I found them were in
groups rated "D" or "E" at the time, as is also typical of my watch list.

For me to focus in on the internet / computer security sector was novel,
first time I was remotely "group oriented", or recognized the potential of
an entire sector in time to not only research it, but to enter before the
rest of the market already priced everything out of reach.

Next 18 months will tell if I was correct in my assessments.

- ----- Original Message -----
From: "John Solarno" <workvirt@workvirtual.com>
To: <canslim@lists.xmission.com>
Sent: Thursday, November 07, 2002 9:50 PM
Subject: [CANSLIM] Let's play "Where are they now?"


Every weekend, I download a copy of a detailed report off of a website
we all know and love that contains all of the pricing data, earnings
ratings, relative strength ratings, etc. for several thousand stocks as
of the end of the preceding week.  I keep all of those reports on my
hard drive, thinking they might prove useful SOMEDAY.

Tonight, just for fun, I decided to play a game I call "Where Are They
Now?" I went back to a report I ran about 30 trading days ago and, using
Excel and some current pricing data, I did a very clumsy analysis of the
report to see where all of these stocks now stood, subtotaled by various
criteria. (For example, how did stocks with an earnings rating between
80-99 vs. stocks with an earnings rating of 70-79 perform in the last 30
trading days?)

The results were startling, even if my analysis was, as I said, pretty
crude.  I merely looked at price today vs. price 30 trading days ago and
then sorted and subtotaled by various criteria. (I'm sure a statistician
would have a field day pointing out the faults in my methods.)

Here was the part that surprised me: the worse the ratings, the better
the stock performance!  It seemed as if no matter which criteria I used,
the "bottom of the barrel" ended up out-performing what are usually
referred to as "the top-rated stocks."

Here are the results.  (The percentage shown is the average percentage
increase of all stocks in a given category.) I have been very careful to
make sure that I am not violating any copyright laws or user agreements,
so in each case, I have invented a annoyingly cute or confusing
name/description of my own invention for each criterion just to make
sure I won't get in trouble.

I also make no claims as to what any of this analysis means.  I merely
offer it up for amusement.  (But earlier this week, the Large Picture in
that newspaper we all read DID mention that the only people making any
money right now were the bottom fishers!  I guess they weren't kidding!)

One last heartening note: notice that all of the percentages are
positive.  That means that even though some stocks went into the toilet,
overall, prices were up.

John

- ------------------------------------------------------------------------
- -----------------------


CRITERIA: The rating of the growth of a company's sales, their margin on
profit and the return on their equity. (I've assigned a fake letter
grade of my own invention which mimics the real thing. "V" is presumably
the best letter grade, "Z" the worst.)

V = 3.4%
W = 3.58%
X - 4.68%
Y = 5.57%
Z = 10.60%

CRITERIA: The stock's earnings per share

90-99:  2.82%
80-89:  3.58%
70-79:  1.75%
60-69:  3.75%
50-59:  4.07%
40-49:  7.17%
30-39:  5.74%
20-29:  8.01%
10-19:  6.19%
0-9: 9.05%

CRITERIA: The stock's strength, all things being relative

90-99: 1.67%
80-89: 3.01%
70-79: 3.39%
60-69: 3.15%
50-59: 2.63%
40-49: 4.22%
30-39: 5.70%
20-29: 4.67%
10-19: 10.19%
0-9:  10.47%

CRITERIA: Rating of the stock's group strength, all things being
relative

90-99: 0.87%
80-89: 2.28%
70-79: 0.18%
60-69: 1.98%
50-59: 0.45%
40-49: 4.53%
30-39: 8.94%
20-29: 10.39%
10-19: 6.24%
0-9: 15.34%





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