Go to Jeff Salisbury LWGate Home Page.From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] Fundamental Philosophies
Date: Thu, 5 Dec 2002 22:11:44 -0500
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Fred, I don't think the direct cost is the issue for many people as much =
as the apparent philosophy of making a buck off subscribers at the =
expense of all else, including staying competitive in a changing =
industry, adding new services and capabilities without also adding new =
(and substantial) additional charges for those improvements, and =
threatening legal action against even the most ardent supporters if =
those subscribing supporters dare share any of the data from either DGO =
or IBD.=20
On the other hand, I have also heard from many investors starting out =
with only a small amount of capital to invest, and simply could not =
justify the high cost of DGO. I was fortunate, made a nice bundle during =
the year of DGO beta testing, so I already had captured many years of =
the subscription fee. But many investors are being left on the side of =
the highway just because of the cost of IBD/DGO services.
- ----- Original Message -----=20
From: Fred Richards=20
To: canslim@lists.xmission.com=20
Sent: Thursday, December 05, 2002 9:36 PM
Subject: RE: [CANSLIM] Fundamental Philosophies
And just how much will you charge? Have you given any consideration to =
the costs involved? Or how many people might sign up for another stock =
rating service?
It is always great to leverage off other people's work but unless you =
can make a profit after all the costs both known and unknown are =
caculated, don't make the number 1 mistake of most entrepreneurs . . . =
failing to consider the cost of one's time.
Since I make a few more dollars than $500 using the DGO and IBD, the =
cost is only material to those who don't.
-----Original Message-----
From: owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Curt Corley
Sent: Thursday, December 05, 2002 8:15 PM
To: canslim@lists.xmission.com
Subject: [CANSLIM] Fundamental Philosophies
Hi,
=20
I hope you don't mind me changing the subject name of this thread to =
something a little more appropriate than NXTL and SXT.=20
=20
To answer your question: Yes, I would certainly consider purchasing a =
stock if the ROE was less than 16.5% with all other factors looking =
good. As you know, I've purchased PECS and MNTR recently -- two stocks =
that were a lot less perfect than the theoretical stock you mentioned. =
I get your point, and you are right: an ROE below 17% certainly does =
not mean the company or the stock is bad. But here's a situation to =
consider. Let's say you have screened 9,100+ stocks, and came up with a =
dozen or so stocks that have what you consider to be near-perfect =
fundamentals. And let's say a few of those look like they might break =
out of a base formation within the next couple of weeks. Would you =
rather wait around for the possibility that those stocks with the best =
fundamentals will break out? Or would rather purchase stocks that have =
already broken out but which have less stellar fundamentals? Within a =
very short time after purchasing PECS and MNTR, I saw other stocks with =
better fundamentals that looked like they were ready to make a move. Of =
course, that's a tough thing to watch, and that's why I put some thought =
into this question. Given my situation and my personality, I decided I =
would rather keep my eye on only the very best ones. That's why I =
decided last weekend to screen only the near-perfect ones and keep an =
eye on those. And now you, Andy, and Tom are starting to make me doubt =
that decision. Thanks a lot! :)
=20
Seriously now: this has been a very educational and interesting =
thread. Hopefully, by the time we are through with this, we will have =
figured out the best overall stock-picking system; then we can start an =
on-line rating system and screening service that doesn't cost $500 a =
year. :)
=20
Curt
=20
P.S. - I would like to open a topic up some time in the future about =
the use of earnings estimates. But this topic is enough for now. My =
laptop is over-heating. I'm coming into work tired. And my wife is =
starting to forget my middle name.
=20
-----Original Message-----
From: owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com] On Behalf Of kmalm
Sent: Thursday, December 05, 2002 11:44 AM
To: canslim@lists.xmission.com
Subject: RE: [CANSLIM] NXTL, SXT
=20
Hi Curt,
=20
I think you've identified the stickier issues in CANSLIM and =
interpreting WON's work. As both Tom and Andy have pointed out in their =
posts, while WON may *seem* to be stating that ROE>=3D17 is a "minimum =
requirement' it turns out it is a guidepost to lead you to better =
quality stocks. As with other indicators, this is based on his =
historical view of winning stocks, meaning that "on average" winning =
stocks had an ROE>=3D17. As with D/E, ROE can be misleading. For =
example, if a company rejiggers their capital structure and increases =
their outstanding shares, this will have an immediate impact on the ROE =
measure. Another way of viewing it would simply be by asking a question. =
That is, if you were looking at a stock and it had a "perfect" cup with =
handle (ok, it's theoretical!); high RS Rank; an RS line making new =
highs; met all other earnings, sales and profit margin guidelines, and =
broke out on 150% of ADV, would you pass it up because it had an ROE of =
16.5%? If so, why? Does the "low" ROE mean that it is not a good company =
or a good stock?
=20
Katherine
=20
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<DIV><FONT face=3DArial>Fred, I don't think the direct cost is the issue =
for many=20
people as much as the apparent philosophy of making a buck off =
subscribers at=20
the expense of all else, including staying competitive in a changing =
industry,=20
adding new services and capabilities without also adding new (and =
substantial)=20
additional charges for those improvements, and threatening legal action =
against=20
even the most ardent supporters if those subscribing supporters dare =
share any=20
of the data from either DGO or IBD. </FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>On the other hand, I have also heard from many =
investors=20
starting out with only a small amount of capital to invest, and simply=20
could not justify the high cost of DGO. I was fortunate, made a =
nice bundle=20
during the year of DGO beta testing, so I already had captured many =
years of the=20
subscription fee. But many investors are being left on the side of the =
highway=20
just because of the cost of IBD/DGO services.</FONT></DIV>
<DIV> </DIV>
<DIV style=3D"FONT: 10pt arial">----- Original Message -----=20
<DIV style=3D"BACKGROUND: #e4e4e4; font-color: black"><B>From:</B> <A=20
title=3Dffradrich@attbi.com href=3D"mailto:ffradrich@attbi.com">Fred =
Richards</A>=20
</DIV>
<DIV><B>To:</B> <A title=3Dcanslim@lists.xmission.com=20
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
</DIV>
<DIV><B>Sent:</B> Thursday, December 05, 2002 9:36 PM</DIV>
<DIV><B>Subject:</B> RE: [CANSLIM] Fundamental Philosophies</DIV></DIV>
<DIV><BR></DIV>
<DIV><SPAN class=3D780243102-06122002><FONT face=3DArial color=3D#0000ff =
size=3D2>And=20
just how much will you charge? Have you given any consideration to =
the=20
costs involved? Or how many people might sign up for another stock =
rating=20
service?</FONT></SPAN></DIV>
<DIV><SPAN class=3D780243102-06122002><FONT face=3DArial color=3D#0000ff =
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D780243102-06122002><FONT face=3DArial color=3D#0000ff =
size=3D2>It is=20
always great to leverage off other people's work but unless you can make =
a=20
profit after all the costs both known and unknown are caculated, =
don't =20
make the number 1 mistake of most entrepreneurs . . . failing to =
consider the=20
cost of one's time.</FONT></SPAN></DIV>
<DIV><SPAN class=3D780243102-06122002><FONT face=3DArial color=3D#0000ff =
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D780243102-06122002><FONT face=3DArial color=3D#0000ff =
size=3D2>Since=20
I make a few more dollars than $500 using the DGO and IBD, the cost is =
only=20
material to those who don't.</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>Curt=20
Corley<BR><B>Sent:</B> Thursday, December 05, 2002 8:15 =
PM<BR><B>To:</B>=20
canslim@lists.xmission.com<BR><B>Subject:</B> [CANSLIM] Fundamental=20
Philosophies<BR><BR></FONT></DIV>
<DIV class=3DSection1>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: =
Arial">Hi,<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: =
Arial"><o:p> </o:p></SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: Arial">I hope you =
don=92t mind=20
me changing the subject name of this thread to something a little more =
appropriate than NXTL and SXT. <o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: =
Arial"><o:p> </o:p></SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: Arial">To answer =
your=20
question:<SPAN style=3D"mso-spacerun: yes"> </SPAN>Yes, I would =
certainly=20
consider purchasing a stock if the ROE was less than 16.5% with all =
other=20
factors looking good.<SPAN style=3D"mso-spacerun: yes"> =
</SPAN>As you=20
know, I=92ve purchased </SPAN></FONT><st1:City><st1:place><FONT =
face=3DArial=20
color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: =
Arial">PECS</SPAN></FONT></st1:place></st1:City><FONT=20
face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: Arial"> and MNTR =
recently --=20
two stocks that were a lot less perfect than the theoretical stock you =
mentioned.<SPAN style=3D"mso-spacerun: yes"> </SPAN>I get your =
point, and=20
you are right:<SPAN style=3D"mso-spacerun: yes"> </SPAN>an ROE =
below 17%=20
certainly does not mean the company or the stock is bad.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>But here=92s a situation to=20
consider.<SPAN style=3D"mso-spacerun: yes"> </SPAN>Let=92s say =
you have=20
screened 9,100+ stocks, and came up with a dozen or so stocks that =
have what=20
you consider to be near-perfect fundamentals.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>And let=92s say a few of =
those look like=20
they might break out of a base formation within the next couple of =
weeks.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>Would you rather wait around =
for the=20
possibility that those stocks with the best fundamentals will break =
out?<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>Or would rather purchase =
stocks that=20
have already broken out but which have less stellar fundamentals?<SPAN =
style=3D"mso-spacerun: yes"> </SPAN>Within a very short time =
after=20
purchasing </SPAN></FONT><st1:City><st1:place><FONT face=3DArial =
color=3Dnavy=20
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: =
Arial">PECS</SPAN></FONT></st1:place></st1:City><FONT=20
face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: Arial"> and MNTR, =
I saw=20
other stocks with better fundamentals that looked like they were ready =
to make=20
a move.<SPAN style=3D"mso-spacerun: yes"> </SPAN>Of course, =
that=92s a tough=20
thing to watch, and that=92s why I put some thought into this =
question.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>Given my situation and my =
personality,=20
I decided I would rather keep my eye on only the very best ones.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>That=92s why I decided last =
weekend to=20
screen only the near-perfect ones and keep an eye on those.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>And now you, Andy, and Tom =
are=20
starting to make me doubt that decision.<SPAN style=3D"mso-spacerun: =
yes"> =20
</SPAN>Thanks a lot!<SPAN style=3D"mso-spacerun: yes"> =20
</SPAN>:)<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: =
Arial"><o:p> </o:p></SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: Arial">Seriously =
now:<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>this has been a very =
educational and=20
interesting thread.<SPAN style=3D"mso-spacerun: yes"> =
</SPAN>Hopefully, by=20
the time we are through with this, we will have figured out the best =
overall=20
stock-picking system; then we can start an on-line rating system and =
screening=20
service that doesn=92t cost $500 a year.<SPAN style=3D"mso-spacerun: =
yes"> =20
</SPAN>:)<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: =
Arial"><o:p> </o:p></SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: =
Arial">Curt<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: =
Arial"><o:p> </o:p></SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: Arial">P.S. =96 I =
would like=20
to open a topic up some time in the future about the use of earnings=20
estimates.<SPAN style=3D"mso-spacerun: yes"> </SPAN>But this =
topic is=20
enough for now.<SPAN style=3D"mso-spacerun: yes"> </SPAN>My =
laptop is=20
over-heating.<SPAN style=3D"mso-spacerun: yes"> </SPAN>I=92m =
coming into=20
work tired.<SPAN style=3D"mso-spacerun: yes"> </SPAN>And my wife =
is=20
starting to forget my middle name.<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: =
Arial"><o:p> </o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3DTahoma =
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Tahoma">-----Original=20
Message-----<BR><B><SPAN style=3D"FONT-WEIGHT: bold">From:</SPAN></B>=20
owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com]=20
<B><SPAN style=3D"FONT-WEIGHT: bold">On Behalf Of =
</SPAN></B>kmalm<BR><B><SPAN=20
style=3D"FONT-WEIGHT: bold">Sent:</SPAN></B> </SPAN></FONT><st1:date =
Month=3D"12"=20
Day=3D"5" Year=3D"2002"><FONT face=3DTahoma size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Tahoma">Thursday, December 05,=20
2002</SPAN></FONT></st1:date><FONT face=3DTahoma size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Tahoma"> =
</SPAN></FONT><st1:time=20
Hour=3D"11" Minute=3D"44"><FONT face=3DTahoma size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Tahoma">11:44=20
AM</SPAN></FONT></st1:time><FONT face=3DTahoma size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Tahoma"><BR><B><SPAN=20
style=3D"FONT-WEIGHT: bold">To:</SPAN></B>=20
canslim@lists.xmission.com<BR><B><SPAN=20
style=3D"FONT-WEIGHT: bold">Subject:</SPAN></B> RE: [CANSLIM] NXTL,=20
SXT</SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
size=3D3><SPAN style=3D"FONT-SIZE: =
12pt"><o:p> </o:p></SPAN></FONT></P>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
size=3D3><SPAN style=3D"FONT-SIZE: 12pt">Hi=20
Curt,<o:p></o:p></SPAN></FONT></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
size=3D3><SPAN style=3D"FONT-SIZE: =
12pt"> <o:p></o:p></SPAN></FONT></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
size=3D3><SPAN style=3D"FONT-SIZE: 12pt">I think you've identified the =
stickier=20
issues in CANSLIM and interpreting WON's work. As both Tom and Andy =
have=20
pointed out in their posts, while WON may *seem* to be stating that =
ROE>=3D17=20
is a "minimum requirement' it turns out it is a guidepost to lead you =
to=20
better quality stocks. As with other indicators, this is based on his=20
historical view of winning stocks, meaning that "on average" winning =
stocks=20
had an ROE>=3D17. As with D/E, ROE can be misleading. For example, =
if a=20
company rejiggers their capital structure and increases their =
outstanding=20
shares, this will have an immediate impact on the ROE measure. Another =
way of=20
viewing it would simply be by asking a question. That is, if you were =
looking=20
at a stock and it had a "perfect" cup with handle (ok, it's =
theoretical!);=20
high RS Rank; an RS line making new highs; met all other earnings, =
sales and=20
profit margin guidelines, and broke out on 150% of ADV, would you pass =
it up=20
because it had an ROE of 16.5%? If so, why? Does the "low" ROE mean =
that it is=20
not a good company or a good stock?<o:p></o:p></SPAN></FONT></P></DIV>
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<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
size=3D3><SPAN style=3D"FONT-SIZE: =
12pt"> <o:p></o:p></SPAN></FONT></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt">Katherine<o:p></o:p></SPAN></FONT></P></DIV>
<BLOCKQUOTE style=3D"MARGIN-TOP: 5pt; MARGIN-BOTTOM: 5pt; =
MARGIN-RIGHT: 0in">
<P class=3DMsoNormal style=3D"MARGIN-BOTTOM: 12pt"><FONT =
face=3D"Times New Roman"=20
size=3D3><SPAN=20
style=3D"FONT-SIZE: =
12pt"><o:p> </o:p></SPAN></FONT></P></BLOCKQUOTE></DIV></BLOCKQUOTE>=
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