Go to Jeff Salisbury LWGate Home Page.From: Dave Cameron <dfcameron@yahoo.com>
Subject: [CANSLIM] A good posting from Tom Worlye (from 5 years ago)
Date: Sat, 10 May 2003 04:26:10 -0700 (PDT)
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When I began my personal transition from a pure fundamentalist to > adding a TA approach, it was because pure fundamentalism didn't work, at > least in the short term. Too often I saw a stock report earnings up 20 or > 30% over the prior year, yet go down. I spent a lot of time, and money, > finally figuring out that it was expectations that drove the mkt in the > short, and even long, term. Over the years I began to question why the mkt > did what it did, things like increased employment being bad for the mkt > despite reduced welfare costs and increased consumer spending. Took me a > while to grasp how the fear of inflation was greater than the effect of > improved employment (course, now that I finally understand it, it doesn't > seem to apply as well). > > Today, I use both a fundamental and a technical approach both to individual > stocks and the mkt at large. Because of my curiousity about the influences > on the mkt, I have developed a heavy bias on economics. I consider myself > knowledgable, intelligent, and with over 40 years experience in the mkt, > including seven as a broker and three running the "back office" of a > securities firm. I have been learning and using CANSLIM for over seven > years, and have received not only training from WON associates but for a > time got his institutional picks. > > I went thru a period when I essentially dismissed my basic fundamental > approach and was little more than a WON groupie, whatever the master guru > thought I should do, I did. And I learned that, like I, he is not perfect in > forecasting the mkt or individual stocks (altho his success rate is better). > Can I forecast what the mkt will do 3, 6 or 12 months out? No, nor do I > claim to. There are far too many influences on the mkt direction, including > human psychology shaped by many sources including airhead media commentators > (script readers). > > What I can and do give freely to this group is my experience, made somewhat > unique by my occupation within the securities industry. I have learned the > hard way things like a reverse split is usually bad and you are better off > selling; if the mkt closes strongly on volume at either the high or low end > of that day's range it will likely follow thru the next day in the same > direction; just because a stock is cheap doesn't mean it can't get cheaper > and it is better to wait for an uptrend to be developed; etc etc. I have > learned the cost of entering mkt orders at the open, and am now developing a > feel for when and how to enter limit orders within the spread under the new > Order Display rules. > > As one of the early members of this group, it has been my experience that > postings of new stock picks tends to be highest when the mkt does well and > the trend is obvious, little discussion takes place on where the mkt is > likely to go. When the mkt is chaotic, that's when more opinions and > questions start surfacing about "M". It's a time for discussion, > questioning, opinions, education, and sitting on cash till each individual > is confident of what he should do for his investments. > > CS principles should not be abandoned, but I do not agree with selling > everything because "M" looks ugly. Let your individual stops take you out > according to the rules you have developed from CS principles. One thing I > learned the hard way is that there are no absolute rules in this. Each > person develops his or her own application of CANSLIM philosophy as it suits > their comfort level. > > So long as I continue to get feedback from the members of this group that I > am contributing something worthwhile, I don't intend to change. Because I am > licensed and regulated, I still must be restrained in what I say, even > within a private group such as ours. But I doubt the SEC or NASD would > object to my efforts to educate and inform. I disagree strongly that I > ignore WON's views on "M", in fact you seem to have disagreed entirely with > his views on Thursday's action as presented in IBD (I doubt that was > published without his approval). We got the confirmatory day very late, but > we got it. And Friday would seem to further confirm it both with a further > 1% gain on NYSE and NASDAQ, even without a substantial increase in volume to > the upside. Interestingly, this seems to have caused Connie's indicators to > go negative. Don't know if this just means it's no longer a good enviroment > for day traders, or also bad for CANSLIM. VIX did drop by over 10%, but at > 33.04 it's still a long way over 20. Some months ago, well before the Asian > crises broke, I espoused the opinion that the volatility would be much > greater for the balance of the year. So far that is proving correct, and I > see no reason to change that opinion. > > Having now spent so much time on my soap box, what do I think is going on in > the mkt? As I have been saying, I see the mkt consolidating both long and > mid term gains as well as a short term correction. At the same time it is > absorbing major intl "psychological" influences such as Asia and Latin > America, flight to safety in US treasuries, economic reports suggesting a > need for the Feds to hike immediately counterbalanced by very bullish > reports, gold continuing its bear mkt, strong dollar further reducing export > growth but hurting big caps with intl exposure, a shift of money from big > caps to small caps and back to big caps, and Iraq stupidly saber rattling. > Currently I am looking for a home for the cash I raised over the past > several weeks selling my dogs. I expect to be fully invested by the end of > the week barring some major event or change in my reading of both the > fundamental and technical portrayal of "M". This is what is right for me, > and by definition may not be right for even one other member of this fine > group. It fits my confidence and comfort level. No other member should make > a decision on what I think is right for me. > > One of the best comments I heard recently was from Wayne Angell, former Fed > governor and now economist at Bear Stearns: "Gold at $310 is a huge vote of > confidence in the Feds" (course now it's at $304 after briefly breaking > $300, and forecasts now are for 275-280 before the bargain hunters will step > in). > > Any statements or opinions are strictly my own and not that of my employer. > My comments should not be interpreted as a recommendation of any kind. I am > a licensed (inactive) broker and an active investor. All investors should do > their own research prior to any investment, especially one learned about on > the Internet. Hopefully my comments will better inform and educate all > investors. > tom w ===== Dave Cameron dfcameron@yahoo.com __________________________________ Do you Yahoo!? The New Yahoo! Search - Faster. Easier. Bingo. http://search.yahoo.com - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email.
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