Re: [CANSLIM] New Investors needs help... a short story

From: Fanus <fanus13@yahoo.com>
Subject: Re: [CANSLIM] New Investors needs help... a short story
Date: Mon, 4 Aug 2003 14:18:30 -0700 (PDT)

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Well, of course stop loss orders are important, but
you still need to decide on something to buy before
you can put your stop loss in place.   So, I'd say
first rule is to buy correctly, i.e. not over extended
stocks and the 2nd rule is your stop loss.  If you are
not buying correctly, stop loss orders are not going
to save you.  They will just get hit time after time
after time.

I also respectfully disagree that the main goal is to
protect your money.  Of course it is important to
protect your money, but the main goal for me is to
make money. If your main goal is just to protect your
money, then a CD would do just fine.

Just my 2 cents.
- - Fanus


- --- joe <lakbossa@hotmail.com> wrote:
> first rule...always use a stop loss! i dont care
> what people say, the main goal is to protect your
> money.
>   ----- Original Message ----- 
>   From: Yien T Lung 
>   To: canslim@lists.xmission.com 
>   Sent: Monday, August 04, 2003 12:47 PM
>   Subject: [CANSLIM] New Investors needs help... a
> short story
> 
> 
> 
>   Hi all,
> 
>   I am quite new to this forum and I was hoping that
> some of you, more
>   experienced canslim users, would kindly offer me
> some starting tips or
>   share your procedure in the search for new
> potential buys.
> 
>   Let me continue by sharing my initial experience
> with you guys. I started
>   investing 2 years ago after my friend recommended
> me to read books about
>   Value Investing, more specifially, books about
> Warren Buffett. I read and
>   summarized almost every single book I could get my
> hands on about Warren
>   Buffett...and was almost too eager to start my
> road to be a millionaire.
> 
>   So what is value investing? Basically, I intepret
> it as investing in
>   securities that are currently being traded at a
> value below its true
>   "intrinsic value". The idea is that the market has
> been too harsh and
>   pessimist about the prospects of a particular
> stock,..and you as a
>   investor believes that this company has the
> potential to get back on track
>   and that the current problems it is facing is only
> temporary.
> 
>   Sounds easy, but I found the hard way that it is
> not.
> 
>   In my impulsive and eagerness to make money? I
> plunged my hard earned cash
>   into securities like Qwest (Q), Tyco
> (TYC),...among others. I bought Q
>   when it was trading around 8.50. I thought to
> myself...this is a company
>   that has a book value of at least 20 dollars. If
> only half of that book
>   value is written off, I will still be safe. So I
> bought the stock, and saw
>   it plunge in value to less than 1 dollar. Again, I
> thought it was ok
>   because I am a "value investor"...and I need to
> hold my buys for the "long
>   run"... A new management comes in and the stocks
> starts doing better...
>   However, the new management finds out that there
> are a lot of improver
>   entries and must restate earnings. That
> restatement totally wipes out the
>   book value of the company!!! This taught me never
> to believe on BS alone.
>   Now, even after two full years, the stock has not
> yet recouped to my
>   entry level.
> 
>   My other experience was TYC. I bought it when it
> was 26. I read a lot of
>   news from respected value managers that Tyco is a
> very sound company with
>   a lot of small businesses that generate lots of
> free cash flow. Good hein?
>   Well, I thought so too. I bought it and it went up
> all the way to 35. I
>   thought, I should "stay for the long run" and let
> it run its way up.. But
>   the next thing, the stock began to go south. That
> was the time when there
>   was a lot of talk about the ex CEO being a crook
> and stuff like that. I
>   held the stock for quite some time...and I will be
> very hopeful if the
>   stock trades at around the price I got in....
> 
>   So here I am today. After losing a lot of hard
> earned cash, I decided to
>   give Mr. O'Neill's methodology a try. If you read
> some of this value
>   investing, a lot of these people dont believe that
> technical analysis
>   works..and my friend (a Buffett believer) doesnt
> think too highly of Mr
>   O'Neills methodology. But I am willing to give it
> a try. Please help me
>   get started.
> 
>   Thanks
> 
>   Yien
> 
> 
> 
> 
> 
> 
> 
> 
>   -
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> "majordomo@xmission.com"
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>   -"unsubscribe canslim".  Do not use quotes in your
> email.
> 


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