RE: Beginners' CANSLIM Question (WAS: RE: [CANSLIM] What is your profession? - off list)

From: "Kelly Short" <kelly.short@fw.us.neoris.com>
Subject: RE: Beginners' CANSLIM Question (WAS: RE: [CANSLIM] What is your profession? - off list)
Date: Mon, 18 Aug 2003 14:57:09 -0500
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Steve,

I have found the fundamental data on breakoutwatch.com to be very =
accurate, and standardized to boot. I use the external links within =
breakoutwatch.com to check the institutional ownership, recent =
developments, and news on a stock. I then make sure the external data us =
jiving with the fundamental data from the breakoutwatch.com wrap sheet. =
Hope this helps.

Kelly



- -----Original Message-----
From: Steve Goodwin [mailto:sgoodwin@cfl.rr.com]
Sent: Monday, August 18, 2003 2:42 PM
To: canslim@lists.xmission.com
Subject: Re: Beginners' CANSLIM Question (WAS: RE: [CANSLIM] What is
your profession? - off list)


Kelly,

How do you do your fundamental due diligence?  By using the external =
links
via breakoutwatch.com and the internal site data?  Do you use any other
stand alone fundamental screener tool (tc2k) or just rely solely on
breakoutwatch.com?

Thanks!

- - Steve
sgoodwin@cfl.rr.com

- ----- Original Message -----
From: "Kelly Short" <kelly.short@fw.us.neoris.com>
To: <canslim@lists.xmission.com>
Sent: Monday, August 18, 2003 3:25 PM
Subject: Beginners' CANSLIM Question (WAS: RE: [CANSLIM] What is your
profession? - off list)


Bob and Harold,

I think your questions reflect the apprehension of many of the "newbies" =
on
the list that are probably "lurking" so I'm posting your questions and =
my
answer to the group.

Your collective questions were:
1) How'd you maintain the patience to study CANSLIM for a year before
jumping
in? Did you do a lot of paper trading?
2) How do you develop your Watch List
3) How and when are you alerted to breakout opportunities?
4) At what point do you buy?
5) Do you gradually increase your positions?
6) Do you follow the CANSLIM "stop" recommendations, or might you exit
earlier?
7) Do you buy only CWH breakouts?
8) I've seen a lot of discussion about developing your own style and =
process
of selection and it's seems like an overwhelming learning curve - Is =
that
what you did during
that year?
9) Are there particular tools you've found especially useful for
screening and analysis?

And in response:
1) How'd you maintain the patience to study CANSLIM for a year before
jumping
in? Did you do a lot of paper trading?
- - Three things made this easier: 1) The markets were not in a bull or
sideways fashion, so using the rules of CANSLIM I should not have been
making trades. This may sound odd since CANSLIM seems to say you HAVE to
have a bull market for BO's to occur, but I found this is not the case. =
You
just need a bull market to purchase BO's using CANSLIM. And since I was
trying to make actual trades, I could have 20/20 hindsight on the Monday
morning quarterbacking sessions. (That is, I waited till the stocks BO'd =
and
then did an analysis of them to determine if I would have purchased that
stock.) 2) Anything I do using my own money becomes very important to =
me.
Therefore, I am the type of person that feels extremely certain I know =
what
I'm doing before I go off and risk my money. 3) There are a lot of ways =
to
make money in this world, and using CANSLIM is just one of them. I =
got/get
more satisfaction out of knowing I made a proper trade than the =
financial
returns. So, the academic study of the BO'd equities kept me engaged.
2) How do you develop your Watch List?
- - One word: cumbersome. I first tried creating spreadsheets from the =
lists
contained within IBD. Then a combination of IBD, canslim.net, and the =
custom
screener on Moneycentral.com. After a while, I realized none of these =
were
producing good results, and certainly none better than the others. So, I
pulled back and looked at the forest for the trees and realized the "for
pay" services available for CANSLIM traders would be a much better use =
of my
time and effort. Therefore, I chose breakoutwatch.com as my watch list
source. There are a couple out there you can choose from. I thought this
site was best for my needs/price point.
3) How and when are you alerted to breakout opportunities?
- - Again, breakoutwatch.com provides me with email/mobile phone alerts. I
believe canslim.net also offers alerts, or you can create your own using
desktop software (e.g. TC2000)
4) At what point do you buy?
- - Follow the CANSLIM rule explicitly when you are starting out.
5) Do you gradually increase your positions?
- - I am still learning too (it never ends) and have the same question. =
Ask me
later...
6) Do you follow the CANSLIM "stop" recommendations, or might you exit
earlier?
- - Good question. Gene answered the same question from me a few months =
ago.
CANSLIM states the use of a 7% stop loss rule. But, you have to consider =
the
nature of the stock. Does it usually have a wider range that would set =
you
up for an immediate stop out? If so, then use a wider stop loss. Is the
market in a raging bull trend? If so, then why accept any loss? Set a =
stop
loss at 0% if you are certain you are getting in at the beginning of the =
BO.
The key is to first use a stop loss rule and stick to it, and secondly =
to
make the rule flexible for each stock.
7) Do you buy only CWH breakouts?
- - Yes. Ever use a metric socket to tighten a standard nut? It'll get you
close but not perfect. The old saying is that there are a lot more great
trading systems than great traders. Meaning, too many apply the wrong
trading style to the wrong stock, or don't follow the rules of the =
trading
system. If you want to use another trading style to follow breakouts, go =
for
it, just follow its rules and don't cross-pollinate between trading =
systems.
8) I've seen a lot of discussion about developing your own style and =
process
of selection and it's seems like an overwhelming learning curve - Is =
that
what you did during
that year of training?
- - This part always confused me too. How can I explicitly follow the =
CANSLIM
rules and develop my own trading style? Don't these two philosophies
contradict each other? No. What I found is that you learn from =
experience
(paper experience is cheaper than real world experience...) that certain
elements of the CANSLIM evaluation are more important than others. (The =
list
changes as the market shifts its focus...) Therefore, you may experience
that you always demand stocks have an unusually high quarter over =
quarter
sales growth rate, etc., but are willing to allow other elements to =
barely
meet the CANSLIM criteria. Also, you will never find a "perfect" CANSLIM
stock and therefore you must choose which elements of the system are =
most
important at that time in the market. You will develop this "style" on =
your
own. Trust me.
9) Are there particular tools you've found especially useful for
screening and analysis?
- - There are many useful tools on the market. But let's face it, I have a
limited amount of time and I place a high value on my time so I go for =
what
gets the job done in the least amount of time. In my case, I chose
breakoutwatch.com as my tool of choice. It gives me alerts, watchlists, =
and
other nice features, all in a very user friendly and comprehensive =
summary
that doesn't require me to jump all over the Internet tracking down that =
one
piece of information. Other tools include canslim.net, TC2000, and other
platforms. If you go this route, pick the one that makes the most sense =
for
you.

In summary, 1) you never stop learning this system, 2) its all about =
supply
and demand (critical!), and 3) this is a great group to learn with. I =
have
learned more from this group than I ever could have from a book or IBD.
Don't be afraid to ask questions if you don't understand what WON is =
saying,
or CANSLIM's use on a particular stock. Best of luck to you both. I =
invite
the group to add/contradict any of my answers above.

Kelly

- -----Original Message-----
From: RSCARDAMALIA@EMPIRE.STATE.NY.US
[mailto:RSCARDAMALIA@EMPIRE.STATE.NY.US]
Sent: Monday, August 18, 2003 1:44 PM
To: Kelly Short
Subject: RE: [CANSLIM] What is your profession? - off list



Kelly,
Sending this off-list because I'm an even newer newbie than you - about =
2
weeks! You note that you studied CANSLIM for a year before starting. =
First
question, how'd you maintain the patience for that long instead of =
jumping
in? Did you do a lot of paper trading? I've seen a lot of discussion =
about
developing your own style and process of selection and it's seems like =
an
overwhelming learning curve - lucky to understand what others are saying
about the charts let alone have my own style. Is that what you did =
during
that year? Are there particular tools you've found especially useful for
screening and analysis?

Thanks in advance for any advice.

Bob Scardamalia
Empire State Development
State Data Center
Phone: (518) 292-5300
Fax: (518) 292-5806
E-mail: rscardamalia@empire.state.ny.us
http://www.nylovesbiz.com/nysdc/default.asp

> -----Original Message-----
> From: Kelly Short [SMTP:kelly.short@fw.us.neoris.com]
> Sent: Friday, August 15, 2003 9:08 AM
> To: canslim@lists.xmission.com
> Subject: RE: [CANSLIM] What is your profession?
>
> Non-retired. Heck, just getting started (put me in the under 30 =
category).
> Technology, business development.
>
> Studied CANSLIM for 1 year before implementing. Very high degree of
> success since then. Currently at over 100% annualized return using
> CANSLIM. Plan to retire early!
>
> Kelly
>
> -----Original Message-----
> From: Davellil5@aol.com [mailto:Davellil5@aol.com]
> Sent: Thursday, August 14, 2003 5:42 PM
> To: canslim@lists.xmission.com
> Subject: Re: [CANSLIM] What is your profession?
>
>
> Retired!
>
> Formerly food product manufacturing, product development, and =
purchasing
> executive.  Also, enjoyed a career in industrial quality control.
>
> Using CANSLIM and variations thereof to maintain and improve net worth =
of
> assets in retirement.
>
> I'll bet the answers you receive to your email will reveal a =
fascinating
> variety of high accomplishments by our pals in CANSLIM -- because it
> requires such
> intensive intellectual effort.
>
> Regards,
>
> Dave S.
>
>
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