Go to Jeff Salisbury LWGate Home Page.From: "Fred Richards" <ffradrich@attbi.com>
Subject: RE: [CANSLIM] Fundamental Philosophies
Date: Thu, 5 Dec 2002 22:37:17 -0600
Previous Article (by Author): RE: [CANSLIM] Fundamental Philosophies "Curt Corley"
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Tom,
Based upon my understanding, the cost of those improvements which we both
wish could have been done significantly better was nevertheless not
immaterial. I, for one, would rather pay the fee for the service and save
myself a lot of time getting the same information from a dozen other "free"
sources with a reliability factor for the data with which I can feel
comfortable.
I think the point has been made relatively to the "personal use" policy and
maybe, we will see a significant change in that shortly. If you want to
learn more, contact me privately.
Fred
-----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Tom Worley
Sent: Thursday, December 05, 2002 9:12 PM
To: canslim@lists.xmission.com
Subject: Re: [CANSLIM] Fundamental Philosophies
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.
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 -----
From: Fred Richards
To: canslim@lists.xmission.com
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,
I hope you don’t mind me changing the subject name of this thread to
something a little more appropriate than NXTL and SXT.
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! :)
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. :)
Curt
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.
-----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
Hi Curt,
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>=17 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>=17. 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?
Katherine
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<DIV><SPAN class=3D450412804-06122002><FONT face=3DArial color=3D#0000ff =
size=3D2>Tom,=20
</FONT></SPAN></DIV>
<DIV><SPAN class=3D450412804-06122002><FONT face=3DArial color=3D#0000ff =
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D450412804-06122002><FONT face=3DArial color=3D#0000ff =
size=3D2>Based=20
upon my understanding, the cost of those improvements which we both wish =
could=20
have been done significantly better was nevertheless not =
immaterial. I,=20
for one, would rather pay the fee for the service and save myself a lot =
of time=20
getting the same information from a dozen other "free" sources with a=20
reliability factor for the data with which I can feel=20
comfortable.</FONT></SPAN></DIV>
<DIV><SPAN class=3D450412804-06122002><FONT face=3DArial color=3D#0000ff =
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D450412804-06122002><FONT face=3DArial color=3D#0000ff =
size=3D2>I=20
think the point has been made relatively to the "personal use" policy =
and maybe,=20
we will see a significant change in that shortly. If you want to =
learn=20
more, contact me privately.</FONT></SPAN></DIV>
<DIV><SPAN class=3D450412804-06122002><FONT face=3DArial color=3D#0000ff =
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D450412804-06122002><FONT face=3DArial color=3D#0000ff =
size=3D2>Fred</FONT></SPAN></DIV>
<DIV><SPAN class=3D450412804-06122002><FONT face=3DArial color=3D#0000ff =
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D450412804-06122002><FONT face=3DArial color=3D#0000ff =
size=3D2></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>Tom=20
Worley<BR><B>Sent:</B> Thursday, December 05, 2002 9:12 =
PM<BR><B>To:</B>=20
canslim@lists.xmission.com<BR><B>Subject:</B> Re: [CANSLIM] =
Fundamental=20
Philosophies<BR><BR></FONT></DIV>
<DIV><FONT face=3DArial>Fred, I don't think the direct cost is the =
issue for=20
many people as much as the apparent philosophy of making a buck off=20
subscribers at the expense of all else, including staying competitive =
in a=20
changing industry, adding new services and capabilities without also =
adding=20
new (and substantial) additional charges for those improvements, and=20
threatening legal action against even the most ardent supporters if =
those=20
subscribing supporters dare share any of the data from either DGO or =
IBD.=20
</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 =
could not justify the high cost of DGO. I was fortunate, made a =
nice=20
bundle during the year of DGO beta testing, so I already had captured =
many=20
years of the subscription fee. But many investors are being left on =
the side=20
of the highway 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=20
rating service?</FONT></SPAN></DIV>
<DIV><SPAN class=3D780243102-06122002><FONT face=3DArial =
color=3D#0000ff=20
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D780243102-06122002><FONT face=3DArial =
color=3D#0000ff size=3D2>It=20
is 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=20
size=3D2></FONT></SPAN> </DIV>
<DIV><SPAN class=3D780243102-06122002><FONT face=3DArial =
color=3D#0000ff=20
size=3D2>Since I make a few more dollars than $500 using the DGO and =
IBD, the=20
cost is only 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=20
mind me changing the subject name of this thread to something a =
little more=20
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=20
certainly consider purchasing a stock if the ROE was less than 16.5% =
with=20
all other factors looking good.<SPAN style=3D"mso-spacerun: =
yes"> =20
</SPAN>As you know, I=92ve purchased =
</SPAN></FONT><st1:City><st1:place><FONT=20
face=3DArial 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=20
mentioned.<SPAN style=3D"mso-spacerun: yes"> </SPAN>I get your =
point,=20
and you are right:<SPAN style=3D"mso-spacerun: yes"> </SPAN>an =
ROE below=20
17% 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=20
like they might break out of a base formation within the next couple =
of=20
weeks.<SPAN style=3D"mso-spacerun: yes"> </SPAN>Would you =
rather wait=20
around for the possibility that those stocks with the best =
fundamentals will=20
break out?<SPAN style=3D"mso-spacerun: yes"> </SPAN>Or would =
rather=20
purchase stocks that have already broken out but which have less =
stellar=20
fundamentals?<SPAN style=3D"mso-spacerun: yes"> </SPAN>Within =
a very=20
short time after purchasing </SPAN></FONT><st1:City><st1:place><FONT =
face=3DArial 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, I saw=20
other stocks with better fundamentals that looked like they were =
ready to=20
make a move.<SPAN style=3D"mso-spacerun: yes"> </SPAN>Of =
course, that=92s=20
a tough thing to watch, and that=92s why I put some thought into =
this=20
question.<SPAN style=3D"mso-spacerun: yes"> </SPAN>Given my =
situation=20
and my personality, I decided I would rather keep my eye on only the =
very=20
best ones.<SPAN style=3D"mso-spacerun: yes"> </SPAN>That=92s =
why I decided=20
last weekend to screen only the near-perfect ones and keep an eye on =
those.<SPAN style=3D"mso-spacerun: yes"> </SPAN>And now you, =
Andy, and=20
Tom are starting to make me doubt that decision.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>Thanks a lot!<SPAN=20
style=3D"mso-spacerun: yes"> =
</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,=20
by the time we are through with this, we will have figured out the =
best=20
overall stock-picking system; then we can start an on-line rating =
system and=20
screening service that doesn=92t cost $500 a year.<SPAN=20
style=3D"mso-spacerun: yes"> =
</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 =
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 =
Year=3D"2002" Day=3D"5" Month=3D"12"><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
Minute=3D"44" Hour=3D"11"><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=20
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=20
ROE>=3D17 is a "minimum requirement' it turns out it is a =
guidepost to lead=20
you to 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=20
of viewing it would simply be by asking a question. That is, if you =
were=20
looking at a stock and it had a "perfect" cup with handle (ok, it's=20
theoretical!); high RS Rank; an RS line making new highs; met all =
other=20
earnings, sales and profit margin guidelines, and broke out on 150% =
of ADV,=20
would you pass it up because it had an ROE of 16.5%? If so, why? =
Does the=20
"low" ROE mean that it is not a good company or a good=20
stock?<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"> <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=20
style=3D"MARGIN-TOP: 5pt; MARGIN-BOTTOM: 5pt; MARGIN-RIGHT: =
0in"><P=20
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>=
</BLOCKQUOTE></BODY></HTML>
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