Go to Jeff Salisbury LWGate Home Page.From: Richard <richardtafoya@yahoo.com>
Subject: RE: Re: [CANSLIM] breakouts to come
Date: Mon, 2 Jun 2003 23:10:48 -0700 (PDT)
Previous Article (by Date): [CANSLIM] FW: CANSLIM List FAQ (Monthly Posting) "Katherine Malm"
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- --0-1726079803-1054620648=:84262 Content-Type: text/plain; charset=us-ascii Katherine, I've been lurking and learning for a few weeks, but I just have to step out of the shadows to thank you for shining a spotlight on exactly the thing I needed to learn right now. I'm a new CS'er, I've been dabbling with small positions (50 to 100 shares), stopping out fairly conservatively and doing extensive post-mortems on what went right and wrong. With real money on the line (albeit not amounts that could hurt me greatly if things went awry), I feel like I'm getting an important dose of emotion harnessing practice early on. But my re-reads of HTMMIS always dropped me off at IBD's doorstep when it came to mining. This is a very welcome "a-ha" lesson - one of many that this group has taught so well. Thanks to Katherine and everyone. Richard Katherine Malm <kmalm@earthlink.net> wrote: Hi Ann and all, I have to agree with Bill on this. By the time something makes it to a list like the WR or the IBD100, they've already *become* the leaders. It makes a heck of a lot more sense to catch them as they're *becoming* leaders. That is, if RS>=85 is considered a leader, then how the heck did they get there? They rose from a lower RSRank to get there in the first place. If they were rising in RSRank, then they were *rising in price.* While looking for outperformance to the market and to other stocks is a cornerstone of CANSLIM investing, I've never agreed that mining should only be done after the stock is at RSRank 80 or 85. It's true that leaders will pull back and offer new entry points, so having a list of leaders is helpful. But the problem is, if you want to get the best part of the move, you've got to be watching these guys as they set up and start the lion's share of the move. The IBD started publishing an index of the WR stocks over time, showing a mild percentage gain vs. a sink hole return in the indexes during the Bear, but I suspect that if one were to instead publish an index of stocks breaking out of sound bases starting at a non-laggard RSRank>=70, then the index would be substantially higher. Years ago, a friend of mine and I would meet every Saturday for coffee and pour over the IBD together. At the time, he kept asking why the heck all the stocks mentioned in the paper didn't offer up a good entry point. Most of the time, the lists of stocks, the minigraphs, etc. were already too extended. That meant that in order to use the IBD itself for mining, we had to sift through the lilliputian stock tables highlighting stocks from RSRank 70 and up, highlight up and coming Industries, add the stocks from "Where the Big Money is Flowing" then one by one look at all the charts. It was exhausting and incredibly time consuming. My conclusion after practically loosing my eyesight (and my Saturdays) was that while the IBD is an incredible resource for current news, information on companies, keeping tabs on the Market and learning about CANSLIM, it's a lousy mining tool. Once I'd figured that out, I set out to instead devise a methodology that would let me mine for stocks that met the minimum requirements for a CANSLIM-quality stock and were *just* beginning to outperform and setup for a breakout. The goal was to own a stock before it showed up in the IBD. Just as Bill suggested, seeing it in the IBD *after* I'd found it was the ultimate test. Or, another way of saying it was that I didn't want to see a single stock mentioned in the IBD that I didn't already know about. For the most part, I think that implies that at the very least, one needs some sort of technical software to do this. Many here use HGS/Quotes Plus (QP2), DGO, Vectorvest and others to do this and each has their own particular approach. But even with these tools, it still requires looking through a lot of charts every day to make sure you're seeing the stocks *as* they set up. As I'd rather be hiking the Grand Canyon or having a margarita by the pool, that time spent motivated me to develop even better tools for finding stocks setting up for a breakout, leading to my partnership with Mike at the cwhcharts.com site. That means that there is a third alternative to sifting through the IBD or through a lot of charts, and that is to let a computer do all that time consuming work for you. Our approach is to let the computer find *all* the non-laggard stocks currently setting up in cup with handle bases, put them on a watchlist, and then let us know automatically if they are breaking out above their pivots. Now *there's* an excuse to have another dip in the pool! Katherine - --------------------------------- Do you Yahoo!? Free online calendar with sync to Outlook(TM). - --0-1726079803-1054620648=:84262 Content-Type: text/html; charset=us-ascii <DIV>Katherine, I've been lurking and learning for a few weeks, but I just have to step out of the shadows to thank you for shining a spotlight on exactly the thing I needed to learn right now. </DIV> <DIV> </DIV> <DIV>I'm a new CS'er, I've been dabbling with small positions (50 to 100 shares), stopping out fairly conservatively and doing extensive post-mortems on what went right and wrong. With real money on the line (albeit not amounts that could hurt me greatly if things went awry), I feel like I'm getting an important dose of emotion harnessing practice early on.</DIV> <DIV> </DIV> <DIV>But my re-reads of HTMMIS always dropped me off at IBD's doorstep when it came to mining. This is a very welcome "a-ha" lesson - one of many that this group has taught so well.</DIV> <DIV> </DIV> <DIV>Thanks to Katherine and everyone. </DIV> <DIV> </DIV> <DIV>Richard<BR><BR><B><I>Katherine Malm <kmalm@earthlink.net></I></B> wrote:</DIV> <BLOCKQUOTE style="PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #1010ff 2px solid"> <META content="MSHTML 6.00.2800.1170" name=GENERATOR> <STYLE></STYLE> <DIV><SPAN class=125404003-03062003>Hi Ann and all,</SPAN></DIV> <DIV><SPAN class=125404003-03062003></SPAN> </DIV> <DIV><SPAN class=125404003-03062003>I have to agree with Bill on this. By the time something makes it to a list like the WR or the IBD100, they've already *become* the leaders. It makes a heck of a lot more sense to catch them as they're *becoming* leaders. That is, if RS>=85 is considered a leader, then how the heck did they get there? They rose from a lower RSRank to get there in the first place. If they were rising in RSRank, then they were *rising in price.* While looking for outperformance to the market and to other stocks is a cornerstone of CANSLIM investing, I've never agreed that mining should only be done after the stock is at RSRank 80 or 85. It's true that leaders will pull back and offer new entry points, so having a list of leaders is helpful. But the problem is, if you want to get the best part of the move, you've got to be watching these guys as they set up and start the lion's share of the move. The IBD started publishing an index of the WR stocks over time, showing a mild percentage gain vs. a sink hole return in the indexes during the Bear, but I suspect that if one were to instead publish an index of stocks breaking out of sound bases starting at a non-laggard RSRank>=70, then the index would be substantially higher.</SPAN></DIV> <DIV><SPAN class=125404003-03062003></SPAN> </DIV> <DIV><SPAN class=125404003-03062003>Years ago, a friend of mine and I would meet every Saturday for coffee and pour over the IBD together. At the time, he kept asking why the heck all the stocks mentioned in the paper didn't offer up a good entry point. Most of the time, the lists of stocks, the minigraphs, etc. were already too extended. That meant that in order to use the IBD itself for mining, we had to sift through the lilliputian stock tables highlighting stocks from RSRank 70 and up, highlight up and coming Industries, add the stocks from "Where the Big Money is Flowing" then one by one look at all the charts. It was exhausting and incredibly time consuming. My conclusion after practically loosing my eyesight (and my Saturdays) was that while the IBD is an incredible resource for current news, information on companies, keeping tabs on the Market and learning about CANSLIM, it's a lousy mining tool.</SPAN></DIV> <DIV><SPAN class=125404003-03062003></SPAN> </DIV> <DIV><SPAN class=125404003-03062003>Once I'd figured that out, I set out to instead devise a methodology that would let me mine for stocks that met the minimum requirements for a CANSLIM-quality stock and were *just* beginning to outperform and setup for a breakout. The goal was to own a stock before it showed up in the IBD. Just as Bill suggested, seeing it in the IBD *after* I'd found it was the ultimate test. Or, another way of saying it was that I didn't want to see a single stock mentioned in the IBD that I didn't already know about. For the most part, I think that implies that at the very least, one needs some sort of technical software to do this. Many here use HGS/Quotes Plus (QP2), DGO, Vectorvest and others to do this and each has their own particular approach. But even with these tools, it still requires looking through a lot of charts every day to make sure you're seeing the stocks *as* they set up. As I'd rather be hiking the Grand Canyon or having a margarita by the pool, that time spent motivated me to develop even better tools for finding stocks setting up for a breakout, leading to my partnership with Mike at the cwhcharts.com site. That means that there is a third alternative to sifting through the IBD or through a lot of charts, and that is to let a computer do all that time consuming work for you. Our approach is to let the computer find *all* the non-laggard stocks currently setting up in cup with handle bases, put them on a watchlist, and then let us know automatically if they are breaking out above their pivots. Now *there's* an excuse to have another dip in the pool!</SPAN></DIV> <DIV><SPAN class=125404003-03062003></SPAN> </DIV> <DIV><SPAN class=125404003-03062003>Katherine</SPAN></DIV></BLOCKQUOTE><p><hr SIZE=1> Do you Yahoo!?<br> Free <a href="http://us.rd.yahoo.com/mail_us/tag/*http://calendar.yahoo.com">online calendar</a> with sync to Outlook(TM). - --0-1726079803-1054620648=:84262-- - - - -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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