Go to Jeff Salisbury LWGate Home Page.From: Dan Musicant <musicant@pacbell.net>
Subject: Re: [CANSLIM] A good posting from Tom Worlye (from 5 years ago)
Date: Tue, 20 May 2003 19:02:22 -0700
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Dave and all, It could just be my email client but the post I'm replying to (a repost of one of Tom Worley's posts from 5 years ago) came to me oddly formatted. I straightened it out so it's more readable, at least on my system, and am presenting the results. I resubscribed to the list on 4/23/03, and Tom only made two posts after that.=20 Dan Musicant ______________________________________________________ On Sat, 10 May 2003 04:26:10 -0700 (PDT), Dave Cameron <dfcameron@yahoo.comwrote: (results reformatted) 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=20 =3D=3D=3D=3D=3D Dave Cameron dfcameron@yahoo.com __________________________________ Do you Yahoo!? The New Yahoo! Search - Faster. Easier. 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