[CANSLIM] AAII letter to the editor

From: "John Solarno" <workvirt@workvirtual.com>
Subject: [CANSLIM] AAII letter to the editor
Date: Sun, 13 Jul 2003 21:40:44 -0400

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I just received my July copy of the AAII Journal (published by the American
Association of Individual Investors.)  In the letter to the editor section,
there is a blistering objection to an article in the June issue by William
O'Neill called "The Big Picture: How to Determine the Stock Market's
Direction."

The letter, written by a Jon A. Ford, says that O'Neil acknowledged, in his
June article, that the bear market began in March of 2000. "What he doesn't
say," writes Ford, "is that his Investor's Business Daily failed to notify
investors that it was time to go into cash until February 13, 2003 - long
after a large chunk of investment savings had gone up in smoke.

"O'Neil's 'cut your losses at 7% rule' did not help," Ford continues,
"because for almost the entire duration of the bear market, the
encouragement was to continue buying newly identified stocks with sale
proceeds. This effectively sets up a series of 7% to 8% stock market
losses."

Ford reminds readers that "as good as CANSLIM and related O'Neil media may
be, the bottom line is for people to buy and sell stocks - and surpass
others- but using O'Neil and company's merchandise."

"Finally, after three years and 25% to 35% or more annual deterioration in
investors' stock portfolios," says Ford, "Investor's Business Daily finally
advised readers to go to cash - a recommendation that, if acted upon, would
have effectively crystallized losses and kept investors from participating
in the market increases only a month later."

Ouch!  

I thought I'd throw this out to the group for comment.

John Solarno





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