Go to Jeff Salisbury LWGate Home Page.From: "Robert Mansk" <robert.mansk@verizon.net>
Subject: Re: Re: [CANSLIM] breakouts to come
Date: Tue, 3 Jun 2003 20:50:06 -0400
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I remember during the summer and fall of 2002 reading several of The =
Smart Investor columns in IBD. It seem to be at the time that most of =
the featured investors had recalibrated their search criteria for =
stocks. Rather than looking for stocks with the standard Earnings =
Strength and Relative Strength > 80 to ones with a much more restrictive =
level. Many said that they only consider stocks in the upper 90s for =
these measures.=20
At that point, I began to wonder if there wasn't a "sweet spot" for =
these values when it comes to stock picking. I also wondered if this =
sweet spot was a function of general market conditions. In good =
markets, the best stocks are much closer to the 80 end of the scale of =
these measures. In bears markets, the sweet spot shifts to the higher =
end of the market.
Bob
----- Original Message -----=20
From: Richard=20
To: canslim@lists.xmission.com=20
Sent: Tuesday, June 03, 2003 2:10 AM
Subject: RE: Re: [CANSLIM] breakouts to come
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.=20
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.=20
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>=3D85 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>=3D70, 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
- -------------------------------------------------------------------------=
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Free online calendar with sync to Outlook(TM).
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<HTML><HEAD>
<META http-equiv=3DContent-Type content=3D"text/html; =
charset=3Diso-8859-1">
<META content=3D"MSHTML 5.50.4807.2300" name=3DGENERATOR></HEAD>
<BODY bgColor=3D#ffffff>
<DIV><FONT face=3DArial size=3D2>I remember during the summer and =
fall of 2002=20
reading several of The Smart Investor columns in IBD. It seem to =
be at the=20
time that most of the featured investors had recalibrated their search =
criteria=20
for stocks. Rather than looking for stocks with the =
standard=20
Earnings Strength and Relative Strength > 80 to ones with a much more =
restrictive level. Many said that they only consider stocks in the =
upper=20
90s for these measures. </FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>At that point, I began to wonder if =
there wasn't a=20
"sweet spot" for these values when it comes to stock picking. I =
also=20
wondered if this sweet spot was a function of general market =
conditions. =20
In good markets, the best stocks are much closer to the 80 end of =
the scale=20
of these measures. In bears markets, the sweet spot shifts to the =
higher=20
end of the market.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>Bob</FONT></DIV>
<BLOCKQUOTE=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A title=3Drichardtafoya@yahoo.com=20
href=3D"mailto:richardtafoya@yahoo.com">Richard</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A =
title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Tuesday, June 03, 2003 =
2:10=20
AM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> RE: Re: [CANSLIM] =
breakouts to=20
come</DIV>
<DIV><BR></DIV>
<DIV>Katherine, I've been lurking and learning for a few weeks, but I =
just=20
have to step out of the shadows to thank you for shining a spotlight =
on=20
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=20
shares), stopping out fairly conservatively and doing =
extensive=20
post-mortems on what went right and wrong. With real money on the=20
line (albeit not amounts that could hurt me greatly if things =
went awry),=20
I feel like I'm getting an important dose of emotion harnessing =
practice early=20
on.</DIV>
<DIV> </DIV>
<DIV>But my re-reads of HTMMIS always dropped me off at IBD's doorstep =
when it=20
came to mining. This is a very welcome "a-ha" lesson - one of many =
that this=20
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>=20
wrote:</DIV>
<BLOCKQUOTE=20
style=3D"PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #1010ff 2px =
solid">
<META content=3D"MSHTML 6.00.2800.1170" name=3DGENERATOR>
<STYLE></STYLE>
<DIV><SPAN class=3D125404003-03062003>Hi Ann and all,</SPAN></DIV>
<DIV><SPAN class=3D125404003-03062003></SPAN> </DIV>
<DIV><SPAN class=3D125404003-03062003>I have to agree with Bill on =
this. By=20
the time something makes it to a list like the WR or the IBD100, =
they've=20
already *become* the leaders. It makes a heck of a lot more sense to =
catch=20
them as they're *becoming* leaders. That is, if RS>=3D85 is =
considered a=20
leader, then how the heck did they get there? They rose from a lower =
RSRank=20
to get there in the first place. If they were rising in RSRank, then =
they=20
were *rising in price.* While looking for outperformance to the =
market and=20
to other stocks is a cornerstone of CANSLIM investing, I've never =
agreed=20
that mining should only be done after the stock is at RSRank 80 or =
85. It's=20
true that leaders will pull back and offer new entry points, so =
having a=20
list of leaders is helpful. But the problem is, if you want to get =
the best=20
part of the move, you've got to be watching these guys as they set =
up and=20
start the lion's share of the move. The IBD started publishing an =
index of=20
the WR stocks over time, showing a mild percentage gain vs. =
a sink hole=20
return in the indexes during the Bear, but I suspect that if one =
were to=20
instead publish an index of stocks breaking out of sound bases =
starting at a=20
non-laggard RSRank>=3D70, then the index would be substantially=20
higher.</SPAN></DIV>
<DIV><SPAN class=3D125404003-03062003></SPAN> </DIV>
<DIV><SPAN class=3D125404003-03062003>Years ago, a friend of mine =
and I would=20
meet every Saturday for coffee and pour over the IBD together. At =
the time,=20
he kept asking why the heck all the stocks mentioned in the paper =
didn't=20
offer up a good entry point. Most of the time, the lists of stocks, =
the=20
minigraphs, etc. were already too extended. That meant that in order =
to use=20
the IBD itself for mining, we had to sift through the lilliputian =
stock=20
tables highlighting stocks from RSRank 70 and up, highlight up and =
coming=20
Industries, add the stocks from "Where the Big Money is Flowing"=20
then one by one look at all the charts. It was exhausting and=20
incredibly time consuming. My conclusion after practically loosing =
my=20
eyesight (and my Saturdays) was that while the IBD is an incredible =
resource=20
for current news, information on companies, keeping tabs on the =
Market and=20
learning about CANSLIM, it's a lousy mining tool.</SPAN></DIV>
<DIV><SPAN class=3D125404003-03062003></SPAN> </DIV>
<DIV><SPAN class=3D125404003-03062003>Once I'd figured that out, I =
set out to=20
instead devise a methodology that would let me mine for stocks that =
met the=20
minimum requirements for a CANSLIM-quality stock and were *just* =
beginning=20
to outperform and setup for a breakout. The goal was to own a stock =
before=20
it showed up in the IBD. Just as Bill suggested, seeing it in the =
IBD=20
*after* I'd found it was the ultimate test. Or, another way of =
saying it was=20
that I didn't want to see a single stock mentioned in the IBD that I =
didn't=20
already know about. For the most part, I think that implies that at =
the very=20
least, one needs some sort of technical software to do this. =
Many here=20
use HGS/Quotes Plus (QP2), DGO, Vectorvest and others to do this and =
each=20
has their own particular approach. But even with these tools, it =
still=20
requires looking through a lot of charts every day to make sure =
you're=20
seeing the stocks *as* they set up. As I'd rather be hiking the =
Grand Canyon=20
or having a margarita by the pool, that time spent motivated me to =
develop=20
even better tools for finding stocks setting up for a breakout, =
leading to=20
my partnership with Mike at the cwhcharts.com site. That means that =
there is=20
a third alternative to sifting through the IBD or through a lot of =
charts,=20
and that is to let a computer do all that time consuming work for =
you. Our=20
approach is to let the computer find *all* the non-laggard =
stocks currently setting up in cup with handle bases, put them =
on a=20
watchlist, and then let us know automatically if they are breaking =
out above=20
their pivots. Now *there's* an excuse to have another dip in the=20
pool!</SPAN></DIV>
<DIV><SPAN class=3D125404003-03062003></SPAN> </DIV>
<DIV><SPAN =
class=3D125404003-03062003>Katherine</SPAN></DIV></BLOCKQUOTE>
<P>
<HR SIZE=3D1>
Do you Yahoo!?<BR>Free <A=20
=
href=3D"http://us.rd.yahoo.com/mail_us/tag/*http://calendar.yahoo.com">on=
line=20
calendar</A> with sync to Outlook(TM).</BLOCKQUOTE></BODY></HTML>
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Next Article (by Author): RE: Re: [CANSLIM] breakouts to come Roger Tawa
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