RE: [CANSLIM] Market Trend Charts

From: Dave Stem <canslimdave2003@yahoo.com>
Subject: RE: [CANSLIM] Market Trend Charts
Date: Wed, 16 Jul 2003 00:17:50 -0700 (PDT)

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Pritish... 
 
A good idea is to focus almost solely on risk and let the profits take care of themselves... which is what the 2% or less risk rule allows  you to do.  In his book, WON talks about how if you are alert, you will actually be out of many stocks before the 7-8% loss because you will be able to tell when a stock is not acting right.  The 7-8% loss is the maximum.  It's not a blind rule to follow.  
 
David Ryan, in Market Wizards, said he would sell half of any position that fell back to the pivot point.  I highly recommend the interview with him.  He talks very specifically about how to trade using CANSLIM.  And he won some sort of investing championship 3 years in a row... which is not bad.  Returns well over 100 percent each year.
 
Personally, I think if you just buy breakouts and blindly use a 7-8% stop over the next few years, there is a good chance your portfolio will be eaten away... particularly if you are so naive as I was last year... to buy many stocks simultaneously without waiting for profits to show up first.
 
Dave


Pritish Shah <pshah@lason.com> wrote:
I am still learning and the idea of "8% loss in a stock should not be greater than 2% of total portfolio" is a great. So at minimum, I should not invest more than 1/12th of my total portfolio in any individual stock.


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<DIV>Pritish... </DIV>
<DIV>&nbsp;</DIV>
<DIV>A good idea is to focus almost solely on risk and let the profits take care of themselves... which is what the 2% or less risk rule allows&nbsp; you to do.&nbsp; In his book, WON talks about how if you are alert, you will actually be out of many stocks before the 7-8% loss because you will be able to tell when a stock is not acting right.&nbsp; The 7-8% loss is the maximum.&nbsp; It's not a blind rule to follow.&nbsp; </DIV>
<DIV>&nbsp;</DIV>
<DIV>David Ryan, in Market Wizards, said he would sell half of any position that fell back to the pivot point.&nbsp; I highly recommend the interview with him.&nbsp; He talks very specifically about how to trade using CANSLIM.&nbsp; And he won some sort of investing championship 3 years in a row... which is not bad.&nbsp; Returns well over 100 percent each year.</DIV>
<DIV>&nbsp;</DIV>
<DIV>Personally, I think if you just buy breakouts and blindly use a 7-8% stop over the next few years, there is a good chance your portfolio will be eaten away... particularly if you are so naive as I was last year... to buy many stocks simultaneously without waiting for profits to show up first.</DIV>
<DIV>&nbsp;</DIV>
<DIV>Dave</DIV>
<DIV><BR><BR><B><I>Pritish Shah &lt;pshah@lason.com&gt;</I></B> wrote:
<BLOCKQUOTE style="PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #1010ff 2px solid; WIDTH: 100%"><BR>I am still learning and the idea of "8% loss in a stock should not be greater than 2% of total portfolio" is a great. So at minimum, I should not invest more than 1/12th of my total portfolio in any individual stock.</BLOCKQUOTE></DIV><p><hr SIZE=1>
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