Go to Jeff Salisbury LWGate Home Page.From: Peter Christiansen <jgalt@mailru.com>
Subject: Re: [CANSLIM] A good posting from Tom Worlye (from 5 years ago)
Date: Sat, 10 May 2003 20:51:43 +0700
Next Article (by Subject): Re: [CANSLIM] Tom Worley: Tragic Announcement SACADS@aol.com
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By the way, Dave. I have just forwarded this on to a good friend that
is just getting into the markets, and having a tough time. I think he
will appreciate it.<br>
<br>
Peter<br>
<br>
Dave Cameron wrote:<br>
<blockquote type="cite"
cite="mid20030510112610.98142.qmail@web20604.mail.yahoo.com">
<pre wrap="">When I began my personal transition from a pure fundamentalist to
</pre>
<blockquote type="cite">
<pre wrap="">adding a TA approach, it was because pure fundamentalism didn't
</pre>
</blockquote>
<pre wrap=""><!---->work, at
</pre>
<blockquote type="cite">
<pre wrap="">least in the short term. Too often I saw a stock report earnings up
</pre>
</blockquote>
<pre wrap=""><!---->20 or
</pre>
<blockquote type="cite">
<pre wrap="">30% over the prior year, yet go down. I spent a lot of time, and
</pre>
</blockquote>
<pre wrap=""><!---->money,
</pre>
<blockquote type="cite">
<pre wrap="">finally figuring out that it was expectations that drove the mkt in
</pre>
</blockquote>
<pre wrap=""><!---->the
</pre>
<blockquote type="cite">
<pre wrap="">short, and even long, term. Over the years I began to question why
</pre>
</blockquote>
<pre wrap=""><!---->the mkt
</pre>
<blockquote type="cite">
<pre wrap="">did what it did, things like increased employment being bad for the
</pre>
</blockquote>
<pre wrap=""><!---->mkt
</pre>
<blockquote type="cite">
<pre wrap="">despite reduced welfare costs and increased consumer spending. Took
</pre>
</blockquote>
<pre wrap=""><!---->me a
</pre>
<blockquote type="cite">
<pre wrap="">while to grasp how the fear of inflation was greater than the
</pre>
</blockquote>
<pre wrap=""><!---->effect of
</pre>
<blockquote type="cite">
<pre wrap="">improved employment (course, now that I finally understand it, it
</pre>
</blockquote>
<pre wrap=""><!---->doesn't
</pre>
<blockquote type="cite">
<pre wrap="">seem to apply as well).
Today, I use both a fundamental and a technical approach both to
</pre>
</blockquote>
<pre wrap=""><!---->individual
</pre>
<blockquote type="cite">
<pre wrap="">stocks and the mkt at large. Because of my curiousity about the
</pre>
</blockquote>
<pre wrap=""><!---->influences
</pre>
<blockquote type="cite">
<pre wrap="">on the mkt, I have developed a heavy bias on economics. I consider
</pre>
</blockquote>
<pre wrap=""><!---->myself
</pre>
<blockquote type="cite">
<pre wrap="">knowledgable, intelligent, and with over 40 years experience in the
</pre>
</blockquote>
<pre wrap=""><!---->mkt,
</pre>
<blockquote type="cite">
<pre wrap="">including seven as a broker and three running the "back office" of
</pre>
</blockquote>
<pre wrap=""><!---->a
</pre>
<blockquote type="cite">
<pre wrap="">securities firm. I have been learning and using CANSLIM for over
</pre>
</blockquote>
<pre wrap=""><!---->seven
</pre>
<blockquote type="cite">
<pre wrap="">years, and have received not only training from WON associates but
</pre>
</blockquote>
<pre wrap=""><!---->for a
</pre>
<blockquote type="cite">
<pre wrap="">time got his institutional picks.
I went thru a period when I essentially dismissed my basic
</pre>
</blockquote>
<pre wrap=""><!---->fundamental
</pre>
<blockquote type="cite">
<pre wrap="">approach and was little more than a WON groupie, whatever the
</pre>
</blockquote>
<pre wrap=""><!---->master guru
</pre>
<blockquote type="cite">
<pre wrap="">thought I should do, I did. And I learned that, like I, he is not
</pre>
</blockquote>
<pre wrap=""><!---->perfect in
</pre>
<blockquote type="cite">
<pre wrap="">forecasting the mkt or individual stocks (altho his success rate is
</pre>
</blockquote>
<pre wrap=""><!---->better).
</pre>
<blockquote type="cite">
<pre wrap="">Can I forecast what the mkt will do 3, 6 or 12 months out? No, nor
</pre>
</blockquote>
<pre wrap=""><!---->do I
</pre>
<blockquote type="cite">
<pre wrap="">claim to. There are far too many influences on the mkt direction,
</pre>
</blockquote>
<pre wrap=""><!---->including
</pre>
<blockquote type="cite">
<pre wrap="">human psychology shaped by many sources including airhead media
</pre>
</blockquote>
<pre wrap=""><!---->commentators
</pre>
<blockquote type="cite">
<pre wrap="">(script readers).
What I can and do give freely to this group is my experience, made
</pre>
</blockquote>
<pre wrap=""><!---->somewhat
</pre>
<blockquote type="cite">
<pre wrap="">unique by my occupation within the securities industry. I have
</pre>
</blockquote>
<pre wrap=""><!---->learned the
</pre>
<blockquote type="cite">
<pre wrap="">hard way things like a reverse split is usually bad and you are
</pre>
</blockquote>
<pre wrap=""><!---->better off
</pre>
<blockquote type="cite">
<pre wrap="">selling; if the mkt closes strongly on volume at either the high or
</pre>
</blockquote>
<pre wrap=""><!---->low end
</pre>
<blockquote type="cite">
<pre wrap="">of that day's range it will likely follow thru the next day in the
</pre>
</blockquote>
<pre wrap=""><!---->same
</pre>
<blockquote type="cite">
<pre wrap="">direction; just because a stock is cheap doesn't mean it can't get
</pre>
</blockquote>
<pre wrap=""><!---->cheaper
</pre>
<blockquote type="cite">
<pre wrap="">and it is better to wait for an uptrend to be developed; etc etc. I
</pre>
</blockquote>
<pre wrap=""><!---->have
</pre>
<blockquote type="cite">
<pre wrap="">learned the cost of entering mkt orders at the open, and am now
</pre>
</blockquote>
<pre wrap=""><!---->developing a
</pre>
<blockquote type="cite">
<pre wrap="">feel for when and how to enter limit orders within the spread
</pre>
</blockquote>
<pre wrap=""><!---->under the new
</pre>
<blockquote type="cite">
<pre wrap="">Order Display rules.
As one of the early members of this group, it has been my
</pre>
</blockquote>
<pre wrap=""><!---->experience that
</pre>
<blockquote type="cite">
<pre wrap="">postings of new stock picks tends to be highest when the mkt does
</pre>
</blockquote>
<pre wrap=""><!---->well and
</pre>
<blockquote type="cite">
<pre wrap="">the trend is obvious, little discussion takes place on where the
</pre>
</blockquote>
<pre wrap=""><!---->mkt is
</pre>
<blockquote type="cite">
<pre wrap="">likely to go. When the mkt is chaotic, that's when more opinions
</pre>
</blockquote>
<pre wrap=""><!---->and
</pre>
<blockquote type="cite">
<pre wrap="">questions start surfacing about "M". It's a time for discussion,
questioning, opinions, education, and sitting on cash till each
</pre>
</blockquote>
<pre wrap=""><!---->individual
</pre>
<blockquote type="cite">
<pre wrap="">is confident of what he should do for his investments.
CS principles should not be abandoned, but I do not agree with
</pre>
</blockquote>
<pre wrap=""><!---->selling
</pre>
<blockquote type="cite">
<pre wrap="">everything because "M" looks ugly. Let your individual stops take
</pre>
</blockquote>
<pre wrap=""><!---->you out
</pre>
<blockquote type="cite">
<pre wrap="">according to the rules you have developed from CS principles. One
</pre>
</blockquote>
<pre wrap=""><!---->thing I
</pre>
<blockquote type="cite">
<pre wrap="">learned the hard way is that there are no absolute rules in this.
</pre>
</blockquote>
<pre wrap=""><!---->Each
</pre>
<blockquote type="cite">
<pre wrap="">person develops his or her own application of CANSLIM philosophy as
</pre>
</blockquote>
<pre wrap=""><!---->it suits
</pre>
<blockquote type="cite">
<pre wrap="">their comfort level.
So long as I continue to get feedback from the members of this
</pre>
</blockquote>
<pre wrap=""><!---->group that I
</pre>
<blockquote type="cite">
<pre wrap="">am contributing something worthwhile, I don't intend to change.
</pre>
</blockquote>
<pre wrap=""><!---->Because I am
</pre>
<blockquote type="cite">
<pre wrap="">licensed and regulated, I still must be restrained in what I say,
</pre>
</blockquote>
<pre wrap=""><!---->even
</pre>
<blockquote type="cite">
<pre wrap="">within a private group such as ours. But I doubt the SEC or NASD
</pre>
</blockquote>
<pre wrap=""><!---->would
</pre>
<blockquote type="cite">
<pre wrap="">object to my efforts to educate and inform. I disagree strongly
</pre>
</blockquote>
<pre wrap=""><!---->that I
</pre>
<blockquote type="cite">
<pre wrap="">ignore WON's views on "M", in fact you seem to have disagreed
</pre>
</blockquote>
<pre wrap=""><!---->entirely with
</pre>
<blockquote type="cite">
<pre wrap="">his views on Thursday's action as presented in IBD (I doubt that
</pre>
</blockquote>
<pre wrap=""><!---->was
</pre>
<blockquote type="cite">
<pre wrap="">published without his approval). We got the confirmatory day very
</pre>
</blockquote>
<pre wrap=""><!---->late, but
</pre>
<blockquote type="cite">
<pre wrap="">we got it. And Friday would seem to further confirm it both with a
</pre>
</blockquote>
<pre wrap=""><!---->further
</pre>
<blockquote type="cite">
<pre wrap="">1% gain on NYSE and NASDAQ, even without a substantial increase in
</pre>
</blockquote>
<pre wrap=""><!---->volume to
</pre>
<blockquote type="cite">
<pre wrap="">the upside. Interestingly, this seems to have caused Connie's
</pre>
</blockquote>
<pre wrap=""><!---->indicators to
</pre>
<blockquote type="cite">
<pre wrap="">go negative. Don't know if this just means it's no longer a good
</pre>
</blockquote>
<pre wrap=""><!---->enviroment
</pre>
<blockquote type="cite">
<pre wrap="">for day traders, or also bad for CANSLIM. VIX did drop by over 10%,
</pre>
</blockquote>
<pre wrap=""><!---->but at
</pre>
<blockquote type="cite">
<pre wrap="">33.04 it's still a long way over 20. Some months ago, well before
</pre>
</blockquote>
<pre wrap=""><!---->the Asian
</pre>
<blockquote type="cite">
<pre wrap="">crises broke, I espoused the opinion that the volatility would be
</pre>
</blockquote>
<pre wrap=""><!---->much
</pre>
<blockquote type="cite">
<pre wrap="">greater for the balance of the year. So far that is proving
</pre>
</blockquote>
<pre wrap=""><!---->correct, and I
</pre>
<blockquote type="cite">
<pre wrap="">see no reason to change that opinion.
Having now spent so much time on my soap box, what do I think is
</pre>
</blockquote>
<pre wrap=""><!---->going on in
</pre>
<blockquote type="cite">
<pre wrap="">the mkt? As I have been saying, I see the mkt consolidating both
</pre>
</blockquote>
<pre wrap=""><!---->long and
</pre>
<blockquote type="cite">
<pre wrap="">mid term gains as well as a short term correction. At the same time
</pre>
</blockquote>
<pre wrap=""><!---->it is
</pre>
<blockquote type="cite">
<pre wrap="">absorbing major intl "psychological" influences such as Asia and
</pre>
</blockquote>
<pre wrap=""><!---->Latin
</pre>
<blockquote type="cite">
<pre wrap="">America, flight to safety in US treasuries, economic reports
</pre>
</blockquote>
<pre wrap=""><!---->suggesting a
</pre>
<blockquote type="cite">
<pre wrap="">need for the Feds to hike immediately counterbalanced by very
</pre>
</blockquote>
<pre wrap=""><!---->bullish
</pre>
<blockquote type="cite">
<pre wrap="">reports, gold continuing its bear mkt, strong dollar further
</pre>
</blockquote>
<pre wrap=""><!---->reducing export
</pre>
<blockquote type="cite">
<pre wrap="">growth but hurting big caps with intl exposure, a shift of money
</pre>
</blockquote>
<pre wrap=""><!---->from big
</pre>
<blockquote type="cite">
<pre wrap="">caps to small caps and back to big caps, and Iraq stupidly saber
</pre>
</blockquote>
<pre wrap=""><!---->rattling.
</pre>
<blockquote type="cite">
<pre wrap="">Currently I am looking for a home for the cash I raised over the
</pre>
</blockquote>
<pre wrap=""><!---->past
</pre>
<blockquote type="cite">
<pre wrap="">several weeks selling my dogs. I expect to be fully invested by the
</pre>
</blockquote>
<pre wrap=""><!---->end of
</pre>
<blockquote type="cite">
<pre wrap="">the week barring some major event or change in my reading of both
</pre>
</blockquote>
<pre wrap=""><!---->the
</pre>
<blockquote type="cite">
<pre wrap="">fundamental and technical portrayal of "M". This is what is right
</pre>
</blockquote>
<pre wrap=""><!---->for me,
</pre>
<blockquote type="cite">
<pre wrap="">and by definition may not be right for even one other member of
</pre>
</blockquote>
<pre wrap=""><!---->this fine
</pre>
<blockquote type="cite">
<pre wrap="">group. It fits my confidence and comfort level. No other member
</pre>
</blockquote>
<pre wrap=""><!---->should make
</pre>
<blockquote type="cite">
<pre wrap="">a decision on what I think is right for me.
One of the best comments I heard recently was from Wayne Angell,
</pre>
</blockquote>
<pre wrap=""><!---->former Fed
</pre>
<blockquote type="cite">
<pre wrap="">governor and now economist at Bear Stearns: "Gold at $310 is a huge
</pre>
</blockquote>
<pre wrap=""><!---->vote of
</pre>
<blockquote type="cite">
<pre wrap="">confidence in the Feds" (course now it's at $304 after briefly
</pre>
</blockquote>
<pre wrap=""><!---->breaking
</pre>
<blockquote type="cite">
<pre wrap="">$300, and forecasts now are for 275-280 before the bargain hunters
</pre>
</blockquote>
<pre wrap=""><!---->will step
</pre>
<blockquote type="cite">
<pre wrap="">in).
Any statements or opinions are strictly my own and not that of my
</pre>
</blockquote>
<pre wrap=""><!---->employer.
</pre>
<blockquote type="cite">
<pre wrap="">My comments should not be interpreted as a recommendation of any
</pre>
</blockquote>
<pre wrap=""><!---->kind. I am
</pre>
<blockquote type="cite">
<pre wrap="">a licensed (inactive) broker and an active investor. All investors
</pre>
</blockquote>
<pre wrap=""><!---->should do
</pre>
<blockquote type="cite">
<pre wrap="">their own research prior to any investment, especially one learned
</pre>
</blockquote>
<pre wrap=""><!---->about on
</pre>
<blockquote type="cite">
<pre wrap="">the Internet. Hopefully my comments will better inform and educate
</pre>
</blockquote>
<pre wrap=""><!---->all
</pre>
<blockquote type="cite">
<pre wrap="">investors.
tom w
</pre>
</blockquote>
<pre wrap=""><!---->
=====
Dave Cameron
<a class="moz-txt-link-abbreviated" href="mailto:dfcameron@yahoo.com">dfcameron@yahoo.com</a>
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Next Article (by Subject): Re: [CANSLIM] Tom Worley: Tragic Announcement SACADS@aol.com
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