Re: [CANSLIM] Lessons Learned - 2 BO Failures Today

From: Tomas <tomas986@yahoo.com>
Subject: Re: [CANSLIM] Lessons Learned - 2 BO Failures Today
Date: Wed, 16 Jul 2003 10:46:39 -0700 (PDT)

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I would have to agree with Frik.  I noticed a lot of
people try to use CS, but only a portion of it (i.e.
good technical but not good fundies).  Sometimes I see
people asking opinions on a particular stock and when
I look at it, there is no way in he** that the stock
is a  CS candidate.  This event does not happen as
often on this list as on another list that I
subscribed to.

tomas

- --- Frik Lebom <talkcanslim@hotmail.com> wrote:
> Hi,
> 
> IMHO a real CANSLIM stock is not just a stock that
> have a nice technical 
> "entry point". I truly believe a canslim investor
> should look for powerful 
> growth stocks that have strength to drive the price
> higher. In the case of 
> HUM, the 1st and foremost fundamental consideration,
> "C" in CANSLIM is 
> simply not there. Not only the stock did not meet
> the 25% recent quarter 
> increase in EPS, it actually declined(for 2
> consecutive quarters comparing 
> to same quarter previous year). WON also try to look
> for stocks that have 
> good ROE and profit margin, in HUM's case, both of
> these figures are not up 
> to mark too.(I personally do not blindly chase a
> profit margin of 18% like 
> WON suggest, but it really seem too low in this
> case,same thing with ROE..)
> 
> Although I always get tempted to stocks that show a
> good "technical entry 
> point", I just try to remind myself I am a CANSLIM
> investor, not a "cup with 
> handle" investor. A good cup with handle stock might
> be able to show 
> nearterm increase in stock price but in my opinion a
> trueCANSLIM stock have 
> a much higher chance to be my BIG winner.
> 
> Thanks,
> 
> Frik
> 
> 
> >From: Bill Triffet <btriffet@earthlink.net>
> >Reply-To: canslim@lists.xmission.com
> >To: canslim@lists.xmission.com
> >Subject: Re: [CANSLIM] Lessons Learned - 2 BO
> Failures Today
> >Date: Wed, 16 Jul 2003 09:53:03 -0700 (PDT)
> >
> >Might I add the fundies on HUM were on the weak
> side for my taste. Handle 
> >was sloping up as well.
> >
> >Most of the recent BO's have had low fundies. Could
> be a sign?
> >
> >--
> >Bill
> >
> > >>For the group:
> >
> >I got stopped out today on two BO purchases: HUM
> and BSTE. I'll share my
> >"lessons learned" with the group so that hopefully
> someone will benefit 
> >from
> >my loss:
> >
> >I had done my usual due diligence on both stocks
> and had given them a
> >"green light with reservations". Turns out I should
> have given more 
> >credence to
> >the "with reservations" part. Upon further
> examination, I see that high
> >institutional ownership and strange action in the
> handle are common in both
> >stocks as shown below:
> >
> >HUM:
> >Institutional Ownership = 68%
> >Chart action = High volume in handle
> >
> >BSTE:
> >Institutional Ownership = 99%
> >Chart action = Wedging action in handle
> >
> >High institutional ownership places an equity at
> the mercy of institutions
> >who can sell of huge chunks at any given time and
> therefore put your
> >purchase in a free fall. High volume in the handle
> does not prove the 
> >sellers
> >are "drying up" to allow the stock to move upward.
> The wedging action in 
> >the
> >handle is a sell signal - a bad signal just before
> an expected breakout.
> >
> >These are my observations from my post-mortem of
> these two purchases. If
> >anyone else sees additional items, or disagrees
> with my reasoning above, 
> >I'd
> >love to hear your comments.<<
> ><< MESSAGE.HTML >>
> 
>
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