RE: [CANSLIM] New to the group

From: "Katherine Malm" <kmalm@earthlink.net>
Subject: RE: [CANSLIM] New to the group
Date: Fri, 24 Jan 2003 08:42:21 -0600
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Hi Christian,

I think one of the most important things I learned from O'Neil was not that
fundamentals matter, as that has always been the case and is important to
the biggest of gurus such as Buffett, but that *technicals* matter as well.
As the market is always forward looking, the technicals will tell the tale
of the stock before the fundamentals (which lag in reporting) reflect what
is going on. That's how it was easy to see that stocks such as QCOM, YHOO,
AOL, etc. were rolling over and falling apart in early 2000, even as their
recent financial reports showed excellent results. The simplest way to read
the market signals then, is to read the action of the leading stocks. When
they begin to act in tandem, that tells you collectively of the general
market health.

Unfortunately, I don't think O'Neil does a particularly good job explaining
charts in his book, HTMMIS. That's not to say it's not an excellent book. It
is and I've read it over and over during the years. The problem is, as a
beginner at technical analysis, it's just not enough to get the gist of
things and gain confidence in reading the price/volume action in the stock.
Here are 3 books that I thought did a good job. Though each has their own
quirks and shortcomings, collectively, they give a good base. Once you read
these, go back and read HTMMIS again. It'll make a great deal more sense.

- -"How I Made $2,000,000 in the Stock Market" by Nicolas Darvas. A quick
read, but gives a good view of stocks in consolidation as they move from one
level of support/resistance to the next (He calls this "boxes"). Put a brown
book cover on this if you read it at the coffee shop. People will stare at
you in disbelief!

- -"How Charts Can Help You in the Stock Market" by William L. Jiler. A very
good overview of price/volume patterns. Short and sweet but full of
examples. Again, gives you a good reference point for understanding
technical analysis. No need for a cover on this one, but sit with the other
folks who read self help books. With a title like that, you'll fit right in
and they won't be the wiser.

- -"Secrets for Profiting in Bull and Bear Markets" by Stan Weinstein. This is
the book that made everything click for me. Something about the way he looks
at charts makes it seem like common sense. This is definitely not CANSLIM,
but you can take away a great deal from his approach to technical analysis.
Also includes exercises at the end of each chapter to test your
understanding. No need for a cover on this one, as his clever inclusion of
the word "BEAR" in the title will make people smile at you with that
sympathetic "I know, hasn't this been a killer few years in the market"
look.

The other thing that I've found helpful over the years is to save chart
examples from the IBD and from stocks you run across in articles and/or
discussions. Keep a binder with your notations of what you do and don't
understand. It's amazing how, over time, you can go back and read your
notations and see how much progress you've made with each day!

Katherine

- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of CJ's email
Sent: Wednesday, January 22, 2003 5:57 PM
To: canslim@lists.xmission.com
Subject: RE: [CANSLIM] New to the group


Hi Katherine,

Thanks for your reply.  I'm more interested in understanding market
indicators, reading/understanding charts (understanding the price to volume
relationship), and investment methodologies.

I guess due to the market, I'm more reluctant in investing in a company even
if it has good fundementals.  I've read a book on CANSLIM from O'Neil (I've
read a few interesting emails on IBD) and firmly believe in what he says in
researching a companies fundementals (ie. earnings, growth, institutional
ownership, industry ranking, etc.), but I'm still a bit skeptical on how
companies chart's tend to follow a trend (cup & handle, head & shoulders,
etc.) when they have these good fundementals in a bullish market (He tends
to emphasize that this technique only works in a bull market).  I'm sure my
skeptism is probably due to me still being new to this and the fact that we
are still in a bearish market.

I realize this will take some time for me to learn and I'll probably have to
get my feet wet to understand this more thoroughly.  This may sound dumb,
but I guess I'm looking for some advice from people on how to make that
first step into investing.   Hopefully, this has helped.

Thanks again,

Christian






- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Katherine Malm
Sent: Wednesday, January 22, 2003 2:42 PM
To: canslim@lists.xmission.com
Subject: RE: [CANSLIM] New to the group


Hi Christian,

Welcome to the group.

What kinds of information are you looking for specifically? General market
history, reading market conditions, money management, trading psychology,
specific investing methodologies, reading charts, understanding fundamental
indicators and/or reading financial statements, etc., etc.?

There's a world of information out there and plenty of good books and
websites on any one of them. Once you give us a good idea of what you're
trying to achieve, folks here can chime in with their favorites.

Katherine

- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of
CEWALD@sbcglobal.net
Sent: Wednesday, January 22, 2003 12:20 PM
To: canslim@lists.xmission.com
Subject: [CANSLIM] New to the group


Hello all,

I wanted to thank all of you for helping out in my
quest to learn more about CANSLIM investing in the
market.  I have especially learned a great deal more
since joining this group (joined a couple of months
ago), but still feel like an amateur compared to most
of you and am still a little reluctant in asking
questions.

Instead, I'll ask for advice.  What would
most or some of you recommend as a good way to learn
more about the market and more importantly becoming
more confident in investing?

Thanks again for your help!

Christian

- ----------------
Christian Ewald




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