RE: [CANSLIM] Opportunity Cost

From: "Katherine Malm" <kmalm@earthlink.net>
Subject: RE: [CANSLIM] Opportunity Cost
Date: Thu, 26 Jun 2003 18:19:14 -0500

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Hi Harold,

Yes, as I am a purist CANSLIM investor when making long trades, I look for
intermediate term bases and proof that the stock is breaking above the
resistance at the pivot set for each particular style of base. I also buy on
pullbacks when it's appropriate, as a pullback to logical support when
technicals are favorable is a valid entry point as well. Over the years,
this has proved to be an extraordinarily profitable methdology for me, so I
know from experience that it works.

I discontinued using Vectorvest for long positions last Fall after joining
Mike Gibbons at cwhcharts.com. Though, until fairly recently, I was still
using it for finding positions for shorting (not a CANSLIM methodology). As
I've developed a methodology using paricular price action that is more than
sufficient for  finding candidates, I no longer need it for that, either.

I used to use VV for mining for stocks, after beating it into submission for
use as a CANSLIM mining tool. There, I'd look for particular technical
action to determine whether the stock was showing some recent oomph to the
upside. VV has a proprietary indicator called RT, relative timing, which
acts as a summary proxy for technical action. If you can imagine a
rubberband attached to a 13 week EMA, RT is an indicator that tells whether
the price is above or below the EMA and how far it is stretched from that
line. Values are then set from 0 = high velocity (stretch) to the downside,
to 1 = neutral, to 2 = high velocity (stretch) to the upside. Unfortunately,
VV doesn't contain actual fundamental data (they use proprietary proxies
again), so it required that I use DGO for both preponderance of evidence
fundamental evaluation and, at the same time for determining an entry point.
The process that I used for determining fundamental health is now reflected
in our site's CEF (Canslim fundamental evaluation score).

Our methodologies at cwhcharts.com are significantly superior, as we don't
use proxies for basing action, but instead use computer algorithms to search
for actual basing patterns, so you can probably see why VV is no longer a
necessary tool for me.

Katherine


- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Harold Josephson
Sent: Thursday, June 26, 2003 4:34 PM
To: canslim@lists.xmission.com
Subject: RE: [CANSLIM] Opportunity Cost


Hi Katherine,

Do you buy only breaking out or likely to breakout stocks?

Some time back, you mentioned VectorVest.  How do you use it?

Thanks

Harold

Harold Josephson
Tel: 323.850.1333
Fax: 323.512.8968
hj@hjosephson.com

- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com] On Behalf Of Katherine Malm
Sent: Thursday, June 26, 2003 3:09 PM
To: canslim@lists.xmission.com
Subject: RE: [CANSLIM] Opportunity Cost

Hi Scott,

This used to be a problem for me, but several years ago, I buckled down and
set a very clear set of guidelines for mining, buying and selling stocks.
When I sell, I do a post analysis to determine what I did right and what I
did wrong. That helps me continuously improve both my process and my
execution and removes the  emotional elements from the trade itself. At that
point, the market knows and remembers nothing of what I did on the previous
trade, so I figure both the pocketed money and the mental effort is best
spent on the next trade.

Katherine

- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Logan, Scott L.
Sent: Thursday, June 26, 2003 3:50 PM
To: 'canslim@lists.xmission.com'
Subject: [CANSLIM] Opportunity Cost


I just make a great gain on a stock after being out of the market for a
while. My problem is that the thoughts of "what if" keep popping up in my
mind. Does any one else have a problem with letting go after selling a
stock?

Emotions need to be excluded from the process...

Thanks,
Scott

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