Go to Jeff Salisbury LWGate Home Page.From: "Fred Richards" <ffradrich@attbi.com>
Subject: RE: [CANSLIM] Fundamental Philosophies
Date: Fri, 6 Dec 2002 02:12:40 -0600
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Any worthwhile profession and/or endeavor requires patience, time and =
money to try to learn. Even then, not all who start stay the course.
I think one of the best things you did was to stay out of the market =
since you were unwilling to trade on the short side. . . something that =
is extremely risky for most people. I know many investors who lost =
their shirts trying to buck the market and thinking it would come back. =
The CANSLIM system prevents you from losing much money if done =
correctly. But in any bear market, there will always be a number of =
stocks that do well. TSCO being one of those the past year. It was =
identified through CANSLIM filters.
-----Original Message-----
From: owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com]On Behalf Of NANCY POLCARO
Sent: Friday, December 06, 2002 12:04 AM
To: canslim
Subject: Re: [CANSLIM] Fundamental Philosophies
I would just like to put in my opinion if possible. For people who are =
just learning the IBD system and doing all the wrong things and not =
making money(especially in this market) it is a big expense-on top of no =
profits and maybe losing money. For people who have traded for 40 years =
and have their own web site and know Bill O'neil personally, I'm sure it =
is well worth the money. I think the problem is -how do you learn the =
system when you have no stock market background unless you pay that =
much money just to try to learn. I had the paper for two years. I =
thought I was learning it but in fact I was just doing well because I =
was caught up in the last two years of a raging bull market. I let the =
paper go when stocks were going no where but down. When the market =
turns I will probably try it again but in the mean time it is to big of =
an expense to pay for training. Especially if we have a 10 year bear. =
Sorry if I ask simple questions right now, but the books and this web =
site are where I'm being taught right now. I want to thank everyone on =
this site for all the help and training you offer the rest of us. nancy
----- Original Message -----
From: Fred Richards
Sent: Thursday, December 05, 2002 9:35 PM
To: canslim@lists.xmission.com
Subject: RE: [CANSLIM] Fundamental Philosophies
Curt,
After some 40 years in this business, I believe that one of the =
guidelines my mentor pounded into my head is still applicable.
"You get what you pay for in this business."
Fred
-----Original Message-----
From: owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Curt Corley
Sent: Thursday, December 05, 2002 9:22 PM
To: canslim@lists.xmission.com
Subject: RE: [CANSLIM] Fundamental Philosophies
Fred,
=20
I was just joking about the online service. Maybe I should have =
put a =E2=80=9C;)=E2=80=9D after that statement, instead of a =
=E2=80=9C:).=E2=80=9D =20
=20
I agree with the idea that the cost is not very significant if you =
are able to make significantly more than $500 using DGO and IBD =
=E2=80=93 especially if you are unable to make that amount without DGO. =
However, that could very well strengthen the argument in favor of lower =
cost, because (1) there are quite a few people out there who are not in =
your position and who don=E2=80=99t have the starting capital and/or =
skills to make a significant amount over $500, and (2) there are quite a =
few people out there who can make significant money without the service. =
;)
=20
Curt
=20
-----Original Message-----
From: owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com] On Behalf Of Fred Richards
Sent: Thursday, December 05, 2002 8:36 PM
To: canslim@lists.xmission.com
Subject: RE: [CANSLIM] Fundamental Philosophies
=20
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?
=20
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.
=20
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=E2=80=99t 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=E2=80=99ve 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=E2=80=99s a situation to consider. Let=E2=80=99s 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=E2=80=99s =
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=E2=80=99s a tough thing to watch, and that=E2=80=99s 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=E2=80=99s 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=E2=80=99t cost =
$500 a year. :)
=20
Curt
=20
P.S. =E2=80=93 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=E2=80=99m 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><SPAN class=3D880040608-06122002><FONT face=3Dverdana>Any =
worthwhile profession=20
and/or endeavor requires patience, time and money to try to learn. Even =
then,=20
not all who start stay the course.</FONT></SPAN></DIV>
<DIV><SPAN class=3D880040608-06122002></SPAN> </DIV>
<DIV><SPAN class=3D880040608-06122002><FONT face=3Dverdana>I think one =
of the best=20
things you did was to stay out of the market since you were unwilling to =
trade=20
on the short side. . . something that is extremely risky for most =
people. =20
I know many investors who lost their shirts trying to buck the market =
and=20
thinking it would come back. </FONT></SPAN></DIV>
<DIV><SPAN class=3D880040608-06122002></SPAN> </DIV>
<DIV><SPAN class=3D880040608-06122002><FONT face=3Dverdana>The CANSLIM =
system=20
prevents you from losing much money if done correctly. But in any =
bear=20
market, there will always be a number of stocks that do well. TSCO =
being=20
one of those the past year. It was identified through CANSLIM=20
filters.</FONT></SPAN></DIV>
<BLOCKQUOTE dir=3Dltr style=3D"MARGIN-RIGHT: 0px">
<DIV class=3DOutlookMessageHeader dir=3Dltr align=3Dleft><FONT=20
face=3DTahoma>-----Original Message-----<BR><B>From:</B>=20
owner-canslim@lists.xmission.com=20
[mailto:owner-canslim@lists.xmission.com]<B>On Behalf Of </B>NANCY=20
POLCARO<BR><B>Sent:</B> Friday, December 06, 2002 12:04 =
AM<BR><B>To:</B>=20
canslim<BR><B>Subject:</B> Re: [CANSLIM] Fundamental=20
Philosophies<BR><BR></FONT></DIV>
<DIV>I would just like to put in my opinion if possible. For people =
who are=20
just learning the IBD system and doing all the wrong things and not =
making=20
money(especially in this market) it is a big expense-on top of no =
profits and=20
maybe losing money. For people who have traded for 40 years and have =
their own=20
web site and know Bill O'neil personally, I'm sure it is well worth =
the=20
money. I think the problem is -how do you learn the =
system =20
when you have no stock market background unless you pay that =
much =20
money just to try to learn. I had the paper for two years. I =
thought I=20
was learning it but in fact I was just doing well because I was caught =
up in=20
the last two years of a raging bull market. I let the paper =
go =20
when stocks were going no where but down. When the market turns =
I will=20
probably try it again but in the mean time it is to big of an expense =
to pay=20
for training. Especially if we have a 10 year bear. Sorry =
if I ask=20
simple questions right now, but the books and this web site are where =
I'm=20
being taught right now. I want to thank everyone on this site for all =
the help=20
and training you offer the rest of us. nancy</DIV>
<DIV> </DIV>
<BLOCKQUOTE=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
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<DIV style=3D"FONT: 10pt Arial">----- Original Message -----</DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt Arial; COLOR: =
black"><B>From:</B>=20
Fred Richards</DIV>
<DIV style=3D"FONT: 10pt Arial"><B>Sent:</B> Thursday, December 05, =
2002 9:35=20
PM</DIV>
<DIV style=3D"FONT: 10pt Arial"><B>To:</B> =
canslim@lists.xmission.com</DIV>
<DIV style=3D"FONT: 10pt Arial"><B>Subject:</B> RE: [CANSLIM] =
Fundamental=20
Philosophies</DIV>
<DIV> </DIV>
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<DIV><SPAN class=3D180333704-06122002><FONT face=3DArial=20
color=3D#0000ff>Curt,</FONT></SPAN></DIV>
<DIV><SPAN class=3D180333704-06122002><FONT face=3DArial=20
color=3D#0000ff></FONT></SPAN> </DIV>
<DIV><SPAN class=3D180333704-06122002><FONT face=3DArial =
color=3D#0000ff>After=20
some 40 years in this business, I believe that one of the guidelines =
my=20
mentor pounded into my head is still applicable.</FONT></SPAN></DIV>
<DIV><SPAN class=3D180333704-06122002><FONT face=3DArial=20
color=3D#0000ff></FONT></SPAN> </DIV>
<DIV><SPAN class=3D180333704-06122002><FONT face=3DArial =
color=3D#0000ff>"You get=20
what you pay for in this business."</FONT></SPAN></DIV>
<DIV><SPAN class=3D180333704-06122002><FONT face=3DArial=20
color=3D#0000ff></FONT></SPAN> </DIV>
<DIV><SPAN class=3D180333704-06122002><FONT face=3DArial=20
color=3D#0000ff>Fred</FONT></SPAN></DIV>
<BLOCKQUOTE dir=3Dltr style=3D"MARGIN-RIGHT: 0px">
<DIV class=3DOutlookMessageHeader dir=3Dltr align=3Dleft><FONT=20
face=3DTahoma>-----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 9:22 =
PM<BR><B>To:</B>=20
canslim@lists.xmission.com<BR><B>Subject:</B> RE: [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">Fred,<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 was =
just joking=20
about the online service.<SPAN style=3D"mso-spacerun: yes"> =20
</SPAN>Maybe I should have put a =E2=80=9C;)=E2=80=9D after that =
statement, instead of a=20
=E2=80=9C:).=E2=80=9D<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">I agree =
with the=20
idea that the cost is not very significant if you are able to make =
significantly more than $500 using DGO and IBD =E2=80=93 =
especially if you are=20
unable to make that amount without DGO.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>However, that could very =
well=20
strengthen the argument in favor of lower cost, because (1) there =
are=20
quite a few people out there who are not in your position and who =
don=E2=80=99t=20
have the starting capital and/or skills to make a significant =
amount over=20
$500, and (2) there are quite a few people out there who can make=20
significant money without the service.<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 style=3D"MARGIN-LEFT: 0.5in"><FONT =
face=3DTahoma=20
size=3D2><SPAN 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>Fred=20
Richards<BR><B><SPAN style=3D"FONT-WEIGHT: bold">Sent:</SPAN></B>=20
</SPAN></FONT><st1:date Month=3D"12" Day=3D"5" Year=3D"2002"><FONT =
face=3DTahoma=20
size=3D2><SPAN style=3D"FONT-SIZE: 10pt; FONT-FAMILY: =
Tahoma">Thursday,=20
December 05, 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"36" Hour=3D"20"><FONT face=3DTahoma size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Tahoma">8:36=20
PM</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] =
Fundamental=20
Philosophies</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=3DArial color=3Dblue=20
size=3D2><SPAN style=3D"FONT-SIZE: 10pt; COLOR: blue; FONT-FAMILY: =
Arial">And=20
just how much will you charge? Have you given any =
consideration to=20
the costs involved? Or how many people might sign up for =
another=20
stock rating service?</SPAN></FONT><o:p></o:p></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=3DArial color=3Dblue=20
size=3D2><SPAN style=3D"FONT-SIZE: 10pt; COLOR: blue; FONT-FAMILY: =
Arial">It=20
is always great to leverage off other people's work but unless you =
can=20
make a profit after all the costs both known and unknown are =
caculated,=20
don't make the number 1 mistake of most entrepreneurs . . . =
failing=20
to consider the cost of one's =
time.</SPAN></FONT><o:p></o:p></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=3DArial color=3Dblue=20
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: blue; FONT-FAMILY: Arial">Since I =
make a=20
few more dollars than $500 using the DGO and IBD, the cost is only =
material to those who don't.</SPAN></FONT><o:p></o:p></P></DIV>
<BLOCKQUOTE=20
style=3D"MARGIN-TOP: 5pt; MARGIN-BOTTOM: 5pt; MARGIN-RIGHT: 0in">
<P class=3DMsoNormal=20
style=3D"MARGIN-BOTTOM: 12pt; MARGIN-LEFT: 0.5in; MARGIN-RIGHT: =
0in; mso-margin-top-alt: 0in"><FONT=20
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=20
[mailto:owner-canslim@lists.xmission.com]<B><SPAN=20
style=3D"FONT-WEIGHT: bold">On Behalf Of </SPAN></B>Curt=20
Corley<BR><B><SPAN style=3D"FONT-WEIGHT: bold">Sent:</SPAN></B> =
Thursday,=20
December 05, 2002 8:15 PM<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> [CANSLIM] =
Fundamental=20
Philosophies</SPAN></FONT><o:p></o:p></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT =
face=3DArial=20
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 style=3D"MARGIN-LEFT: 0.5in"><FONT =
face=3DArial=20
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=3DArial=20
color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: Arial">I =
hope you=20
don=E2=80=99t mind me changing the subject name of this thread =
to something a=20
little more appropriate than NXTL and SXT. =
<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT =
face=3DArial=20
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=3DArial=20
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%=20
with all other factors looking good.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>As you know, =
I=E2=80=99ve purchased=20
</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=20
recently -- two stocks that were a lot less perfect than the =
theoretical=20
stock you mentioned.<SPAN style=3D"mso-spacerun: yes"> =
</SPAN>I get=20
your point, and you are right:<SPAN style=3D"mso-spacerun: =
yes"> =20
</SPAN>an ROE below 17% certainly does not mean the company or =
the stock=20
is bad.<SPAN style=3D"mso-spacerun: yes"> </SPAN>But =
here=E2=80=99s a=20
situation to consider.<SPAN style=3D"mso-spacerun: yes"> =20
</SPAN>Let=E2=80=99s say you have screened 9,100+ stocks, and =
came up with a=20
dozen or so stocks that have what you consider to be =
near-perfect=20
fundamentals.<SPAN style=3D"mso-spacerun: yes"> </SPAN>And =
let=E2=80=99s say=20
a few of those look like they might break out of a base =
formation within=20
the next couple of weeks.<SPAN style=3D"mso-spacerun: =
yes"> =20
</SPAN>Would you rather wait around for the possibility that =
those=20
stocks with the best fundamentals will break out?<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>Or would rather =
purchase stocks=20
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=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, I=20
saw other stocks with better fundamentals that looked like they =
were=20
ready to make a move.<SPAN style=3D"mso-spacerun: yes"> =
</SPAN>Of=20
course, that=E2=80=99s a tough thing to watch, and =
that=E2=80=99s why I put some thought=20
into this question.<SPAN style=3D"mso-spacerun: yes"> =
</SPAN>Given=20
my situation and my personality, I decided I would rather keep =
my eye on=20
only the very best ones.<SPAN style=3D"mso-spacerun: yes"> =
</SPAN>That=E2=80=99s why I decided last weekend to screen only =
the near-perfect=20
ones and keep an eye on those.<SPAN style=3D"mso-spacerun: =
yes"> =20
</SPAN>And now you, Andy, and Tom are starting to make me doubt =
that=20
decision.<SPAN style=3D"mso-spacerun: yes"> </SPAN>Thanks =
a=20
lot!<SPAN style=3D"mso-spacerun: yes"> =20
</SPAN>:)<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT =
face=3DArial=20
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=3DArial=20
color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: =
Arial">Seriously=20
now:<SPAN style=3D"mso-spacerun: yes"> </SPAN>this has =
been a very=20
educational and interesting thread.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>Hopefully, by the time =
we are=20
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=20
screening service that doesn=E2=80=99t cost $500 a year.<SPAN=20
style=3D"mso-spacerun: yes"> =
</SPAN>:)<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT =
face=3DArial=20
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=3DArial=20
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 style=3D"MARGIN-LEFT: 0.5in"><FONT =
face=3DArial=20
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=3DArial=20
color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: Arial">P.S. =
=E2=80=93 I would=20
like to open a topic up some time in the future about the use of =
earnings estimates.<SPAN style=3D"mso-spacerun: yes"> =
</SPAN>But=20
this topic is enough for now.<SPAN style=3D"mso-spacerun: =
yes"> =20
</SPAN>My laptop is over-heating.<SPAN style=3D"mso-spacerun: =
yes"> =20
</SPAN>I=E2=80=99m coming into work tired.<SPAN =
style=3D"mso-spacerun: yes"> =20
</SPAN>And my wife is starting to forget my middle=20
name.<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT =
face=3DArial=20
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: 1in"><FONT =
face=3DTahoma=20
size=3D2><SPAN 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=20
[mailto:owner-canslim@lists.xmission.com] <B><SPAN=20
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=20
Month=3D"12" 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
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><o:p></o:p></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 1in"><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: 1in"><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: 1in"><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: 1in"><FONT =
face=3D"Times New Roman"=20
size=3D3><SPAN style=3D"FONT-SIZE: 12pt">I think you've =
identified the=20
stickier issues in CANSLIM and interpreting WON's work. As both =
Tom and=20
Andy have pointed out in their posts, while WON may *seem* to be =
stating=20
that ROE>=3D17 is a "minimum requirement' it turns out it is =
a=20
guidepost to lead you to better quality stocks. As with other=20
indicators, this is based on his historical view of winning =
stocks,=20
meaning that "on average" winning stocks had an ROE>=3D17. As =
with D/E,=20
ROE can be misleading. For example, if a company rejiggers their =
capital=20
structure and increases their outstanding shares, this will have =
an=20
immediate impact on the ROE measure. Another way of viewing it =
would=20
simply be by asking a question. That is, if you were looking at =
a stock=20
and it had a "perfect" cup with handle (ok, it's theoretical!); =
high RS=20
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=20
it up because it had an ROE of 16.5%? If so, why? Does the "low" =
ROE=20
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: 1in"><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: 1in"><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 class=3DMsoNormal=20
style=3D"MARGIN-BOTTOM: 12pt; MARGIN-LEFT: 0.5in; =
MARGIN-RIGHT: 0in; mso-margin-top-alt: 0in"><FONT=20
face=3D"Times New Roman" size=3D3><SPAN=20
style=3D"FONT-SIZE: =
12pt"><o:p> </o:p></SPAN></FONT></P></BLOCKQUOTE></BLOCKQUOTE></DIV>=
</BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE></BODY></HTML>
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