Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: RE: [CANSLIM] NXTL, SXT
Date: Thu, 5 Dec 2002 14:00:32 -0600
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Hi Tim,
=20
I think you=E2=80=99ve given an excellent example of =E2=80=9Coverly =
restrictive=E2=80=9D and =E2=80=9Coverlapping=E2=80=9D mining criteria. =
To demonstrate what I mean, I=E2=80=99ve first recategorized each of the =
criteria you listed into =E2=80=9Craw vs. composite=E2=80=9D and =
=E2=80=9Cfundamental vs. technical=E2=80=9D groupings:
=20
Raw Fundamental:
% Change in Latest Quarter's EPS vs. Same Quarter Prior Year Greater =
than or equal to: 25=20
EPS Have Been Accelerating Over the Latest 3 Quarters (%) True=20
Annual % EPS Growth Rate of Last 3 Years Greater than or equal to: 25=20
% Change Latest Quarter's Sales vs. Same Quarter Prior Year Greater than =
or equal to: 25=20
Sales Have Been Accelerating Over the Latest 3 Quarters (%) True=20
After Tax Profit Margin (Most Recent Reported Quarter) Greater than or =
equal to: 10=20
Pre-tax Annual Margins (Latest Fiscal Year Reported) Greater than or =
equal to: 18=20
ROE (Latest Fiscal Year Reported) Greater than or equal to: 17=20
=20
Composite Fundamental:
Earnings Per Share (EPS) Rating From 80 to 99=20
Sales + Profit Margins + ROE (SMR) Rating A, B, C=20
=20
Raw Technical:
Relative Price Strength (RS) Rating From 80 to 99=20
Percentage price is below 52-Week High From 0 to 15 (and Stocks trading =
at new 52-Week High)=20
=20
Composite Technical:
Industry Group Relative Strength (GRP RS) Rating A, B=20
Accumulation/Distribution (Acc/Dis) Rating A, B, C
=20
Composite Technical and Fundamental:=20
SmartSelect=C2=AE Composite Rating From 80 to 99=20
=20
Institutional Summaries used to =E2=80=9Cgauge=E2=80=9D price/volume =
action and =E2=80=9Cquality=E2=80=9D of ownership:
Sponsorship Rating A, B, C=20
% of Stock Owned by Mutual Funds Greater than or equal to: 1=20
% of the number of Mutual Funds Owning for Current Quarter vs. Prior =
Quarter Greater than or equal to: 1=20
=20
Liquidity Minimums:
Current Price Greater than or equal to: 15.000=20
Current 50-Day Average Volume(1000) Greater than or equal to: 100=20
Exchange NYSE, AMEX, NASDAQ=20
=20
=20
While the IBD and O=E2=80=99Neil have intended to give their =
readers/subscribers additional tools, they have also done a bit of a =
disservice by not clearly explaining their use. For example, in the list =
of criteria in your screen, you list all the recommended raw fundamental =
scores AND the EPS/SMR composite fundamental scores AND the COMPOSITE =
score. The EPS and SMR ranks are based on combining all the raw =
fundamental data into a summary indicator. Because the rankings are =
proprietary, we have no precise way of determining how each of the =
accounting data is weighted, but what we do know is that by including =
both in a screen, you are essentially requiring the stock to meet the =
same hurdle twice. Now add in the Comp ranking on top of that, which =
combines both fundamental and technical data, and you are requiring a =
stock to meet a summary indicator of a summary indicator of raw data =
again.=20
=20
The same holds true for technical data. There is the simple price/volume =
action in the chart that, when combined with the RS Rank and the =
direction of the RS Line tells you what the stock is doing right now. =
Summary indicators such as A/D, etc. are interpretive elements based on =
the very same price/volume action. They are not additional indicators, =
but instead summary indicators of price/volume. If you add all of these =
and the COMP ranking and the group ranking, the same thing =
happens=E2=80=A6 once again a summary indicator of a summary indicator =
of raw data.
=20
Stated more simply, one could either take a =E2=80=9Csimple=E2=80=9D =
swipe at stocks by taking the ultimate summary indicator to find stocks =
that are technically and fundamentally sound based on the =
=E2=80=9Cpreponderance of evidence=E2=80=9D, or they could take each of =
the raw requirements and set a meaningful mining point. For example, =
(I=E2=80=99m using settings from your original screen), one could take:
=20
COMP score >=3D80=E2=80=94This by itself, as it is a summary indicator =
of =E2=80=9Call things CANSLIM=E2=80=9D
=20
*or*
=20
A separate screen that looked for summary fundamental/technical =
strength:
SMR <> D, E=20
+ EPS >=3D 80
+ RS>=3D 80
+ A/D <> D, E
=20
*or*
=20
All raw fundamental indicators
+ All raw technical indicators.
=20
Aside from the combinatorial issues, there is also the issue of =
=E2=80=9Cinterpreting=E2=80=9D each of the guidelines. Here are just a =
couple of examples:
=20
- -RS Rank >=3D80--While WON suggests the investor confines most of their =
buying to stocks with RSRank>=3D80, he never says that one should =
restrict all purchases to RSRank>=3D80. In fact, many leading stocks =
such as Dell in the mid-90=E2=80=99s broke out of very sound bases when =
their RSRank was in the 70=E2=80=99s. As a cut off for mining, it would =
still be within O=E2=80=99Neil=E2=80=99s guidelines, as he simply states =
that RS<70 is a laggard. Avoiding laggards is the goal, so mining lower =
and purchasing with RS>=3D70 is not in violation of his work.
=20
- - Industry Group Relative Strength (GRP RS) Rating A, B: While WON =
suggests that you place most of your emphasis on purchasing stocks from =
the top 25% of industries, he does not say restrict your purchases. It =
is true that stocks run in packs and that there is an advantage to =
selecting a stock from a leading industry (it's a risk reduction =
technique), but that is not the same thing as saying =
=E2=80=9Cdon=E2=80=99t buy stocks from industries that are not in the =
top 25%.=E2=80=9D A good stock can be a leader in its industry and will =
lead the group up from a low GRS ranking. Waiting until the majority of =
the stocks in the group are performing well, means missing the best of =
the move in the leaders as they break out of sound bases and run =
up=E2=80=A6pulling the rest of the group in their wake.
=20
I think you could take each of the guidelines and evaluate them in the =
same way. Again, the idea is to lead your eye to strength and then, =
based on the preponderance of evidence select the best stocks possible. =
Even with all the data in the screen, it still doesn=E2=80=99t mean that =
stocks are technically healthy. I=E2=80=99m convinced (or maybe I should =
say, the Bear reminded me) that the most important part of mining is to =
look for sound technicals first, then evaluate the fundamentals and =
misc. factors for the best combination of past performance and future =
potential. As both you and David have demonstrated with your example, =
overly restrictive mining criteria will cause one to overlook good =
stocks.
=20
Here are a couple of articles from the Investor=E2=80=99s Corner on the =
subject:
http://Wallstreet-LLC.com/canslim/NotEveryStockIsPerfect.JPG
http://Wallstreet-LLC.com/canslim/GreatStocksNotFlawless.JPG
=20
Katherine
-----Original Message-----
From: owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Tim Katona
Sent: Thursday, December 05, 2002 10:24 AM
To: canslim@lists.xmission.com
Subject: RE: [CANSLIM] NXTL, SXT
David,
Thanks for the suggestion.
I took all these out and still zero. I then took our the group RS and =
got zero as well.=20
Tim
-----Original Message-----
From: owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com]On Behalf Of David Taggart
Sent: Thursday, December 05, 2002 5:38 AM
To: canslim@lists.xmission.com
Subject: RE: [CANSLIM] NXTL, SXT
Tim,
Try running that screen without the 52 week high, any of the RS, and =
Average Volume filters and see if anything meets the fundamental =
criteria. I wonder if you get anything.
David Taggart
-----Original Message-----
From: owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Tim Katona
Sent: Wednesday, December 04, 2002 10:17 PM
To: canslim@lists.xmission.com
Subject: RE: [CANSLIM] NXTL, SXT
As an interesting data point related to this discussion, I created =
the following custom screen on DGO to check for all of IBD's 20 rules. =
I've run this for almost daily for a year and NEVER has it come up with =
a single stock that met the complete criteria. Granted we've been a =
terrible bear market. Hopefully in a real bull market it will flag some =
stocks to buy!=20
Tim
TK custom Screen Criteria and Parameters=20
Earnings Per Share (EPS) Rating From 80 to 99=20
Relative Price Strength (RS) Rating From 80 to 99=20
Industry Group Relative Strength (GRP RS) Rating A, B=20
Sales + Profit Margins + ROE (SMR) Rating A, B, C=20
Accumulation/Distribution (Acc/Dis) Rating A, B, C=20
SmartSelect=C2=AE Composite Rating From 80 to 99=20
% Change in Latest Quarter's EPS vs. Same Quarter Prior Year =
Greater than or equal to: 25=20
EPS Have Been Accelerating Over the Latest 3 Quarters (%) True=20
Annual % EPS Growth Rate of Last 3 Years Greater than or equal to: =
25=20
% Change Latest Quarter's Sales vs. Same Quarter Prior Year =
Greater than or equal to: 25=20
Sales Have Been Accelerating Over the Latest 3 Quarters (%) True=20
Sponsorship Rating A, B, C=20
% of Stock Owned by Mutual Funds Greater than or equal to: 1=20
% of the number of Mutual Funds Owning for Current Quarter vs. =
Prior Quarter Greater than or equal to: 1=20
Current Price Greater than or equal to: 15.000=20
Stocks trading at new 52-Week High AND Percentage price is below =
52-Week High From 0 to 15=20
Current 50-Day Average Volume(1000) Greater than or equal to: 100=20
After Tax Profit Margin (Most Recent Reported Quarter) Greater =
than or equal to: 10=20
Pre-tax Annual Margins (Latest Fiscal Year Reported) Greater than =
or equal to: 18=20
ROE (Latest Fiscal Year Reported) Greater than or equal to: 17=20
Exchange NYSE, AMEX, NASDAQ=20
Note: SmartSelect registered trademark is the property of WON & =
co. TK custom Screen Criteria and Parameters copyright of Tim Katona =
but canslim@lists.xmission.com has my permission to use it :)
-----Original Message-----
From: owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com]On Behalf Of AJAskey@aol.com
Sent: Wednesday, December 04, 2002 8:38 PM
To: canslim@lists.xmission.com
Subject: Re: [CANSLIM] NXTL, SXT
Curt,
Many of the characteristics of CANSLIM are defined by WON as =
"secondary". He is careful not to say stocks "need" to meet these at =
breakout as some breakout and then achieve perfect CANSLIM fundies. =20
Some discussion by IBD can be found at the IBD AskBill site. =
IBDs take on ROE is at =
http://www.investors.com/askbill/ArcRead.asp?D=3D8/21/2002. IBDs take =
on Debt to Equity is at =
http://www.investors.com/askbill/ArcRead.asp?D=3D10/17/2002. If you get =
a few hours it is educational to go thru the archieve and get more =
specific answers to questions that at not clear in HTMMIS. =20
Another source that can be used is the AskIBD link at =
http://investdaily.custhelp.com/cgi-bin/investdaily.cfg/php/enduser/std_a=
lp.php which is searchable and can provide multiple answers to =
questions. Sometimes the multiple answers even agree with each other =
... LOL.
Andy
In a message dated 12/4/2002 6:47:51 PM Central Standard Time, =
cjcorley@hiwaay.net writes:
Take ROE for instance. According to my interpretation of the =
blue book, Chapter 20 clearly states what the ROE should be before you =
buy a stock. If the ROE is below that amount, it doesn=E2=80=99t even =
show up on my radar.=20
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<DIV>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN style=3D"mso-bidi-font-size: =
10.0pt">Hi=20
Tim,<?xml:namespace prefix =3D o ns =3D =
"urn:schemas-microsoft-com:office:office"=20
/><o:p></o:p></SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN=20
style=3D"mso-bidi-font-size: 10.0pt"> <o:p></o:p></SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN style=3D"mso-bidi-font-size: =
10.0pt">I think=20
you=E2=80=99ve given an excellent example of =E2=80=9Coverly =
restrictive=E2=80=9D and =E2=80=9Coverlapping=E2=80=9D=20
mining criteria.<SPAN style=3D"mso-spacerun: yes"> </SPAN>To =
demonstrate=20
what I mean, I=E2=80=99ve first recategorized each of the criteria you =
listed into =E2=80=9Craw=20
vs. composite=E2=80=9D and =E2=80=9Cfundamental vs. technical=E2=80=9D =
groupings:<o:p></o:p></SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN=20
style=3D"mso-bidi-font-size: 10.0pt"> <o:p></o:p></SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><I><SPAN style=3D"mso-bidi-font-size: =
10.0pt">Raw=20
Fundamental:<o:p></o:p></SPAN></I></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN style=3D"mso-bidi-font-size: =
10.0pt">% Change=20
in Latest Quarter's EPS vs. Same Quarter Prior Year Greater than or =
equal to: 25=20
</SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN style=3D"mso-bidi-font-size: =
10.0pt">EPS Have=20
Been Accelerating Over the Latest 3 Quarters (%) True </SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN style=3D"mso-bidi-font-size: =
10.0pt">Annual %=20
EPS Growth Rate of Last 3 Years Greater than or equal to: 25 </SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN style=3D"mso-bidi-font-size: =
10.0pt">% Change=20
Latest Quarter's Sales vs. Same Quarter Prior Year Greater than or equal =
to: 25=20
</SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN style=3D"mso-bidi-font-size: =
10.0pt">Sales=20
Have Been Accelerating Over the Latest 3 Quarters (%) True </SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN style=3D"mso-bidi-font-size: =
10.0pt">After=20
Tax Profit Margin (Most Recent Reported Quarter) Greater than or equal =
to: 10=20
</SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN style=3D"mso-bidi-font-size: =
10.0pt">Pre-tax=20
Annual Margins (Latest Fiscal Year Reported) Greater than or equal to: =
18=20
</SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN style=3D"mso-bidi-font-size: =
10.0pt">ROE=20
(Latest Fiscal Year Reported) Greater than or equal to: 17 </SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN=20
style=3D"mso-bidi-font-size: 10.0pt"> <o:p></o:p></SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><I><SPAN=20
style=3D"mso-bidi-font-size: 10.0pt">Composite=20
Fundamental:<o:p></o:p></SPAN></I></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN style=3D"mso-bidi-font-size: =
10.0pt">Earnings=20
Per Share (EPS) Rating From 80 to 99 </SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN style=3D"mso-bidi-font-size: =
10.0pt">Sales +=20
Profit Margins + ROE (SMR) Rating A, B, C </SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><I><SPAN=20
style=3D"mso-bidi-font-size: 10.0pt"> <o:p></o:p></SPAN></I></P>
<P style=3D"MARGIN: 0in 0in 0pt"><I><SPAN style=3D"mso-bidi-font-size: =
10.0pt">Raw=20
Technical:<o:p></o:p></SPAN></I></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN style=3D"mso-bidi-font-size: =
10.0pt">Relative=20
Price Strength (RS) Rating From 80 to 99 <o:p></o:p></SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN=20
style=3D"mso-bidi-font-size: 10.0pt">Percentage price is below 52-Week =
High From 0=20
to 15 (and Stocks trading at new 52-Week High) </SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN=20
style=3D"mso-bidi-font-size: 10.0pt"> <o:p></o:p></SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><I><SPAN=20
style=3D"mso-bidi-font-size: 10.0pt">Composite=20
Technical:<o:p></o:p></SPAN></I></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN style=3D"mso-bidi-font-size: =
10.0pt">Industry=20
Group Relative Strength (GRP RS) Rating A, B </SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN=20
style=3D"mso-bidi-font-size: 10.0pt">Accumulation/Distribution (Acc/Dis) =
Rating A,=20
B, C<o:p></o:p></SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><I><SPAN=20
style=3D"mso-bidi-font-size: 10.0pt"> <o:p></o:p></SPAN></I></P>
<P style=3D"MARGIN: 0in 0in 0pt"><I><SPAN=20
style=3D"mso-bidi-font-size: 10.0pt">Composite<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>Technical and Fundamental:=20
</SPAN><o:p></o:p></I></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN=20
style=3D"mso-bidi-font-size: 10.0pt">SmartSelect=C2=AE Composite Rating =
From 80 to 99=20
</SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN=20
style=3D"mso-bidi-font-size: 10.0pt"> <o:p></o:p></SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><I><SPAN=20
style=3D"mso-bidi-font-size: 10.0pt">Institutional Summaries used to =
=E2=80=9Cgauge=E2=80=9D=20
price/volume action and =E2=80=9Cquality=E2=80=9D of =
ownership:<o:p></o:p></SPAN></I></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN=20
style=3D"mso-bidi-font-size: 10.0pt">Sponsorship Rating A, B, C =
</SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN style=3D"mso-bidi-font-size: =
10.0pt">% of=20
Stock Owned by Mutual Funds Greater than or equal to: 1 </SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN style=3D"mso-bidi-font-size: =
10.0pt">% of the=20
number of Mutual Funds Owning for Current Quarter vs. Prior Quarter =
Greater than=20
or equal to: 1 </SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN=20
style=3D"mso-bidi-font-size: 10.0pt"> <o:p></o:p></SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><I><SPAN=20
style=3D"mso-bidi-font-size: 10.0pt">Liquidity =
Minimums:<o:p></o:p></SPAN></I></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN style=3D"mso-bidi-font-size: =
10.0pt">Current=20
Price Greater than or equal to: 15.000 </SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN style=3D"mso-bidi-font-size: =
10.0pt">Current=20
50-Day Average Volume(1000) Greater than or equal to: 100 </SPAN></P>
<P style=3D"MARGIN: 0in 0in 0pt"><SPAN=20
style=3D"mso-bidi-font-size: 10.0pt">Exchange NYSE, AMEX, NASDAQ =
</SPAN></P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt"> <o:p></o:p></P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt"> <o:p></o:p></P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt">While the IBD and =
O=E2=80=99Neil have=20
intended to give their readers/subscribers additional tools, they have =
also done=20
a bit of a disservice by not clearly explaining their use. For example, =
in the=20
list of criteria in your screen, you list all the recommended raw =
fundamental=20
scores AND the EPS/SMR composite fundamental scores AND the COMPOSITE =
score. The=20
EPS and SMR ranks are based on combining all the raw fundamental data =
into a=20
summary indicator.<SPAN style=3D"mso-spacerun: yes"> =
</SPAN>Because the=20
rankings are proprietary, we have no precise way of determining how each =
of the=20
accounting data is weighted, but what we do know is that by including =
both in a=20
screen, you are essentially requiring the stock to meet the same hurdle =
twice.=20
Now add in the Comp ranking on top of that, which combines both =
fundamental and=20
technical data, and you are requiring a stock to meet a summary =
indicator of a=20
summary indicator of raw data again. </P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt"> <o:p></o:p></P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt">The same holds true =
for technical=20
data. There is the simple price/volume action in the chart that, when =
combined=20
with the RS Rank and the direction of the RS Line tells you what the =
stock is=20
doing right now. Summary indicators such as A/D, etc. are interpretive =
elements=20
based on the very same price/volume action. They are not =
<B>additional</B>=20
indicators, but instead summary indicators of price/volume. If you add =
all of=20
these <B>and</B> the COMP ranking <B>and</B> the group ranking, the same =
thing=20
happens=E2=80=A6 once again a summary indicator of a summary =
indicator<SPAN=20
class=3D745395419-05122002> of raw data</SPAN>.</P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt"> <o:p></o:p></P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt">Stated more simply, =
one could=20
either take a =E2=80=9Csimple=E2=80=9D swipe at stocks by taking the =
ultimate summary indicator=20
to find stocks that are technically and fundamentally sound based on the =
=E2=80=9Cpreponderance of evidence=E2=80=9D, or they could take each of =
the raw requirements and=20
set a meaningful mining point. For example, (I=E2=80=99m using settings =
from your=20
original screen), one could take:</P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt"> <o:p></o:p></P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt">COMP score =
>=3D80=E2=80=94This by=20
itself, as it is a summary indicator of =E2=80=9Call things =
CANSLIM=E2=80=9D</P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt"> <o:p></o:p></P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt">*or*</P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt"> <o:p></o:p></P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt">A separate screen =
that looked for=20
summary fundamental/technical strength:</P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt">SMR <> D, E =
</P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt">+ EPS >=3D<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>80</P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt">+ RS>=3D 80</P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt">+ A/D <> D, =
E</P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt"> <o:p></o:p></P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in =
0pt">*or*<B><o:p></o:p></B></P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in =
0pt"><B> <o:p></o:p></B></P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt">All raw fundamental=20
indicators</P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt">+ All raw technical=20
indicators.</P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt"> <o:p></o:p></P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt">Aside from the =
combinatorial=20
issues, there is also the issue of<SPAN class=3D745395419-05122002>=20
</SPAN> =E2=80=9Cinterpreting=E2=80=9D each of the guidelines. Here =
are just a couple of=20
examples:</P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt"> <o:p></o:p></P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt">-RS Rank =
>=3D80--While WON=20
suggests the investor confines most of their buying to stocks with=20
RSRank>=3D80, he never says that one should <B>restrict</B> all =
purchases to=20
RSRank>=3D80. In fact, many leading stocks such as Dell in the =
mid-90=E2=80=99s broke=20
out of very sound bases when their RSRank was in the 70=E2=80=99s. As a =
cut off for=20
mining, it would still be within O=E2=80=99Neil=E2=80=99s guidelines, as =
he simply states that=20
RS<70 is a laggard. Avoiding laggards is the goal, so mining lower =
and=20
purchasing with RS>=3D70 is not in violation of his work.</P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt"> <o:p></o:p></P>
<P class=3DMsoNormal=20
style=3D"MARGIN: 0in 0in 0pt 9pt; TEXT-INDENT: 0in; mso-list: l0 level1 =
lfo1; tab-stops: list .25in"><SPAN=20
style=3D"mso-bidi-font-size: 10.0pt">-<SPAN=20
style=3D"FONT: 7pt 'Times New Roman'"> </SPAN></SPAN><SPAN=20
style=3D"mso-bidi-font-size: 10.0pt">Industry Group Relative Strength =
(GRP RS)=20
Rating A, B: <SPAN class=3D745395419-05122002>While </SPAN>WON =
suggests that=20
you place most of your emphasis on purchasing stocks from the top 25% of =
industries, he does not say <B>restrict</B> your purchases. It is true =
that=20
stocks run in packs and that there is an advantage to selecting a stock =
from a=20
leading industry<SPAN class=3D745395419-05122002> (it's a risk reduction =
technique)</SPAN>, but that is not the same thing as saying =
=E2=80=9Cdon=E2=80=99t buy stocks=20
from industries that are <B>not</B> in the top 25%.=E2=80=9D A good =
stock can be a=20
leader in its industry and will <B>lead</B> the group up from a low GRS=20
ranking. <SPAN class=3D745395419-05122002>Waiting</SPAN> until the =
majority=20
of the stocks in the group are performing well, <SPAN=20
class=3D745395419-05122002>means missing </SPAN>the best of the move in =
the=20
leaders as they break out of sound bases and run up=E2=80=A6pulling the =
rest of the=20
group in their wake.<o:p></o:p></SPAN></P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt"><SPAN=20
style=3D"mso-bidi-font-size: 10.0pt"> <o:p></o:p></SPAN></P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt">I think you could =
take each of=20
the guidelines and evaluate them in the same way. Again, the idea is to =
lead=20
your eye to strength and then, based on the preponderance of evidence =
select the=20
best stocks possible. Even with all the data in the screen, it =
<B>still</B>=20
doesn=E2=80=99t mean that stocks are technically healthy. I=E2=80=99m =
convinced (or maybe I=20
should say, the Bear reminded me) that the most important part of mining =
is to=20
look for sound technicals first, then evaluate the fundamentals and =
misc.=20
factors for the best combination of past performance and future =
potential. As=20
both you and David have demonstrated<SPAN class=3D745395419-05122002> =
with your=20
example</SPAN>, overly restrictive mining criteria will cause one to =
overlook=20
good stocks.</P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt"> <o:p></o:p></P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt">Here are a couple of =
articles=20
from the Investor=E2=80=99s Corner on the subject:</P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt"><A=20
href=3D"http://wallstreet-llc.com/canslim/NotEveryStockIsPerfect.JPG">htt=
p://Wallstreet-LLC.com/canslim/NotEveryStockIsPerfect.JPG</A></P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt"><A=20
href=3D"http://wallstreet-llc.com/canslim/GreatSTocksNotFlawless.JPG">htt=
p://Wallstreet-LLC.com/canslim/GreatStocksNotFlawless.JPG</A></P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt"> <o:p></o:p></P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0in 0pt">Katherine</P></DIV>
<BLOCKQUOTE dir=3Dltr style=3D"MARGIN-RIGHT: 0px">
<DIV class=3DOutlookMessageHeader dir=3Dltr align=3Dleft><FONT =
face=3DTahoma=20
size=3D2>-----Original Message-----<BR><B>From:</B>=20
owner-canslim@lists.xmission.com=20
[mailto:owner-canslim@lists.xmission.com]<B>On Behalf Of </B>Tim=20
Katona<BR><B>Sent:</B> Thursday, December 05, 2002 10:24 =
AM<BR><B>To:</B>=20
canslim@lists.xmission.com<BR><B>Subject:</B> RE: [CANSLIM] NXTL,=20
SXT<BR><BR></FONT></DIV>
<DIV><FONT face=3DArial color=3D#0000ff size=3D2><SPAN=20
class=3D920392116-05122002>David,</SPAN></FONT></DIV>
<DIV><FONT face=3DArial color=3D#0000ff size=3D2><SPAN=20
class=3D920392116-05122002>Thanks for the =
suggestion.</SPAN></FONT></DIV>
<DIV><FONT face=3DArial color=3D#0000ff size=3D2><SPAN=20
class=3D920392116-05122002></SPAN></FONT> </DIV>
<DIV><FONT face=3DArial color=3D#0000ff size=3D2><SPAN =
class=3D920392116-05122002>I=20
took all these out and still zero. I then took our the group RS =
and got=20
zero as well. </SPAN></FONT></DIV>
<DIV><FONT face=3DArial color=3D#0000ff size=3D2><SPAN=20
class=3D920392116-05122002>Tim</SPAN></FONT></DIV>
<DIV><FONT face=3DArial color=3D#0000ff size=3D2><SPAN=20
class=3D920392116-05122002></SPAN></FONT> </DIV>
<BLOCKQUOTE dir=3Dltr style=3D"MARGIN-RIGHT: 0px">
<DIV class=3DOutlookMessageHeader dir=3Dltr align=3Dleft><FONT =
face=3DTahoma=20
size=3D2>-----Original Message-----<BR><B>From:</B>=20
owner-canslim@lists.xmission.com=20
[mailto:owner-canslim@lists.xmission.com]<B>On Behalf Of </B>David=20
Taggart<BR><B>Sent:</B> Thursday, December 05, 2002 5:38 =
AM<BR><B>To:</B>=20
canslim@lists.xmission.com<BR><B>Subject:</B> RE: [CANSLIM] NXTL,=20
SXT<BR><BR></FONT></DIV>
<DIV><SPAN class=3D084583513-05122002><FONT face=3DArial =
color=3D#0000ff=20
size=3D2>Tim,</FONT></SPAN></DIV>
<DIV><SPAN class=3D084583513-05122002><FONT face=3DArial =
color=3D#0000ff=20
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D084583513-05122002><FONT face=3DArial =
color=3D#0000ff=20
size=3D2>Try running that screen without the 52 week high, any of =
the RS,=20
and Average Volume filters and see if anything meets the=20
fundamental criteria. I wonder if you get=20
anything.</FONT></SPAN></DIV>
<DIV><SPAN class=3D084583513-05122002><FONT face=3DArial =
color=3D#0000ff=20
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D084583513-05122002><FONT face=3DArial =
color=3D#0000ff=20
size=3D2>David Taggart</FONT></SPAN></DIV>
<BLOCKQUOTE dir=3Dltr style=3D"MARGIN-RIGHT: 0px">
<DIV class=3DOutlookMessageHeader dir=3Dltr align=3Dleft><FONT =
face=3DTahoma=20
size=3D2>-----Original Message-----<BR><B>From:</B>=20
owner-canslim@lists.xmission.com=20
[mailto:owner-canslim@lists.xmission.com]<B>On Behalf Of </B>Tim=20
Katona<BR><B>Sent:</B> Wednesday, December 04, 2002 10:17 =
PM<BR><B>To:</B>=20
canslim@lists.xmission.com<BR><B>Subject:</B> RE: [CANSLIM] NXTL,=20
SXT<BR><BR></FONT></DIV>
<DIV>
<P><FONT face=3DArial><FONT color=3D#0000ff><FONT size=3D2><SPAN=20
class=3D967340305-05122002>As an interesting data point related to =
this=20
discussion, I created the following custom screen on DGO to check =
for all=20
of IBD's 20 rules. I've run this for almost daily for =
a year and=20
NEVER has it come up with a single stock that met the=20
complete criteria. Granted we've been a terrible bear market. =
Hopefully in a real bull market it will flag some stocks =
to buy!=20
</SPAN></FONT></FONT></FONT></P>
<P><FONT face=3DArial><FONT color=3D#0000ff><FONT size=3D2><SPAN=20
class=3D967340305-05122002>Tim</SPAN></FONT></FONT></FONT></P>
<P><FONT size=3D+0><FONT size=3D+0><SPAN =
class=3D967340305-05122002></SPAN><FONT=20
face=3DArial><FONT color=3D#0000ff><FONT size=3D2><SPAN=20
class=3D967340305-05122002>TK custom </SPAN>Screen =
Criteria <SPAN=20
class=3D967340305-05122002>and </SPAN>Parameters=20
</FONT></FONT></FONT></FONT></FONT></P>
<P><FONT face=3DArial color=3D#0000ff size=3D2>Earnings Per Share =
(EPS) Rating=20
From 80 to 99 </FONT></P>
<P><FONT face=3DArial color=3D#0000ff size=3D2>Relative Price =
Strength (RS)=20
Rating From 80 to 99 </FONT></P>
<P><FONT face=3DArial color=3D#0000ff size=3D2>Industry Group =
Relative Strength=20
(GRP RS) Rating A, B </FONT></P>
<P><FONT face=3DArial color=3D#0000ff size=3D2>Sales + Profit =
Margins + ROE=20
(SMR) Rating A, B, C </FONT></P>
<P><FONT face=3DArial color=3D#0000ff =
size=3D2>Accumulation/Distribution=20
(Acc/Dis) Rating A, B, C </FONT></P>
<P><FONT face=3DArial color=3D#0000ff size=3D2>SmartSelect=C2=AE =
Composite Rating=20
From 80 to 99 </FONT></P>
<P><FONT face=3DArial color=3D#0000ff size=3D2>% Change in Latest =
Quarter's EPS=20
vs. Same Quarter Prior Year Greater than or equal to: 25 =
</FONT></P>
<P><FONT face=3DArial color=3D#0000ff size=3D2>EPS Have Been =
Accelerating Over=20
the Latest 3 Quarters (%) True </FONT></P>
<P><FONT face=3DArial color=3D#0000ff size=3D2>Annual % EPS Growth =
Rate of Last=20
3 Years Greater than or equal to: 25 </FONT></P>
<P><FONT face=3DArial color=3D#0000ff size=3D2>% Change Latest =
Quarter's Sales=20
vs. Same Quarter Prior Year Greater than or equal to: 25 =
</FONT></P>
<P><FONT face=3DArial color=3D#0000ff size=3D2>Sales Have Been =
Accelerating Over=20
the Latest 3 Quarters (%) True </FONT></P>
<P><FONT face=3DArial color=3D#0000ff size=3D2>Sponsorship Rating =
A, B, C=20
</FONT></P>
<P><FONT face=3DArial color=3D#0000ff size=3D2>% of Stock Owned by =
Mutual Funds=20
Greater than or equal to: 1 </FONT></P>
<P><FONT face=3DArial color=3D#0000ff size=3D2>% of the number of =
Mutual Funds=20
Owning for Current Quarter vs. Prior Quarter Greater than or equal =
to: 1=20
</FONT></P>
<P><FONT face=3DArial color=3D#0000ff size=3D2>Current Price =
Greater than or=20
equal to: 15.000 </FONT></P>
<P><FONT face=3DArial color=3D#0000ff size=3D2>Stocks trading at =
new 52-Week=20
High AND Percentage price is below 52-Week High From 0 to 15 =
</FONT></P>
<P><FONT face=3DArial color=3D#0000ff size=3D2>Current 50-Day =
Average=20
Volume(1000) Greater than or equal to: 100 </FONT></P>
<P><FONT face=3DArial color=3D#0000ff size=3D2>After Tax Profit =
Margin (Most=20
Recent Reported Quarter) Greater than or equal to: 10 </FONT></P>
<P><FONT face=3DArial color=3D#0000ff size=3D2>Pre-tax Annual =
Margins (Latest=20
Fiscal Year Reported) Greater than or equal to: 18 </FONT></P>
<P><FONT face=3DArial color=3D#0000ff size=3D2>ROE (Latest Fiscal =
Year Reported)=20
Greater than or equal to: 17 </FONT></P>
<P><FONT face=3DArial><FONT color=3D#0000ff><FONT =
size=3D2>Exchange <SPAN=20
class=3D967340305-05122002> </SPAN>NYSE, AMEX, NASDAQ=20
</FONT></FONT></FONT></P>
<P><FONT size=3D+0><FONT size=3D+0><FONT face=3DArial><FONT =
color=3D#0000ff><FONT=20
size=3D2><SPAN class=3D967340305-05122002>Note: </SPAN>SmartSelect =
registered=20
trademark is the property of WON & co.<SPAN=20
class=3D967340305-05122002> =20
</SPAN></FONT></FONT></FONT></FONT></FONT><FONT size=3D+0><FONT=20
size=3D+0><FONT face=3DArial><FONT color=3D#0000ff><FONT =
size=3D2><SPAN=20
class=3D967340305-05122002><FONT face=3DArial><FONT =
color=3D#0000ff><FONT=20
size=3D2><SPAN class=3D967340305-05122002>TK custom </SPAN>Screen=20
Criteria <SPAN class=3D967340305-05122002>and =
</SPAN>Parameters=20
</FONT></FONT></FONT>copyright of Tim Katona but <A=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
has my=20
permission to use it=20
:)</SPAN></FONT></FONT></FONT></FONT></FONT><FONT size=3D+0><FONT=20
size=3D+0></P></FONT></FONT></DIV>
<BLOCKQUOTE>
<DIV class=3DOutlookMessageHeader dir=3Dltr align=3Dleft><FONT =
face=3DTahoma=20
size=3D2>-----Original Message-----<BR><B>From:</B>=20
owner-canslim@lists.xmission.com=20
[mailto:owner-canslim@lists.xmission.com]<B>On Behalf Of=20
</B>AJAskey@aol.com<BR><B>Sent:</B> Wednesday, December 04, 2002 =
8:38=20
PM<BR><B>To:</B> canslim@lists.xmission.com<BR><B>Subject:</B> =
Re:=20
[CANSLIM] NXTL, SXT<BR><BR></FONT></DIV><FONT =
face=3Darial,helvetica><FONT=20
size=3D2>Curt,<BR><BR>Many of the characteristics of CANSLIM are =
defined=20
by WON as "secondary". He is careful not to say stocks =
"need" to=20
meet these at breakout as some breakout and then achieve perfect =
CANSLIM=20
fundies. <BR><BR>Some discussion by IBD can be found at =
the IBD=20
AskBill site. IBDs take on ROE is at <A=20
=
href=3D"http://www.investors.com/askbill/ArcRead.asp?D=3D8/21/2002">http:=
//www.investors.com/askbill/ArcRead.asp?D=3D8/21/2002</A>. =20
IBDs take on Debt to Equity is at <A=20
=
href=3D"http://www.investors.com/askbill/ArcRead.asp?D=3D10/17/2002">http=
://www.investors.com/askbill/ArcRead.asp?D=3D10/17/2002</A>. =20
If you get a few hours it is educational to go thru the archieve =
and get=20
more specific answers to questions that at not clear in =
HTMMIS. =20
<BR><BR>Another source that can be used is the AskIBD link at <A =
=
href=3D"http://investdaily.custhelp.com/cgi-bin/investdaily.cfg/php/endus=
er/std_alp.php">http://investdaily.custhelp.com/cgi-bin/investdaily.cfg/p=
hp/enduser/std_alp.php</A>=20
which is searchable and can provide multiple answers to =
questions. =20
Sometimes the multiple answers even agree with each other ...=20
LOL.<BR><BR>Andy<BR><BR><BR>In a message dated 12/4/2002 6:47:51 =
PM=20
Central Standard Time, cjcorley@hiwaay.net writes:<BR><BR><BR>
<BLOCKQUOTE=20
style=3D"PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: =
#0000ff 2px solid; MARGIN-RIGHT: 0px"=20
TYPE=3D"CITE">Take ROE for instance. According to my=20
interpretation of the blue book, Chapter 20 clearly states =
what the=20
ROE should be before you buy a stock. If the ROE is =
below that=20
amount, it doesn=E2=80=99t even show up on my radar. =
</FONT><FONT lang=3D0=20
style=3D"BACKGROUND-COLOR: #ffffff" face=3DArial =
color=3D#000000 size=3D3=20
FAMILY=3D"SANSSERIF"></BLOCKQUOTE><BR></FONT><FONT lang=3D0=20
style=3D"BACKGROUND-COLOR: #ffffff" face=3DArial color=3D#000000 =
size=3D2=20
=
FAMILY=3D"SANSSERIF"><BR></BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE></BLOCKQU=
OTE></FONT></FONT></BODY></HTML>
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