Go to Jeff Salisbury LWGate Home Page.From: "Harold Josephson" <hj@hjosephson.com>
Subject: RE: Beginners' CANSLIM Question (WAS: RE: [CANSLIM] What is your profession? - off list)
Date: Tue, 19 Aug 2003 15:12:50 -0700
Next Article (by Author): RE: [CANSLIM] SHFL "Katherine Malm"
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Actually, Kelly, I have read "Reminiscences . . . " and a number of = other writings on the topic of Supply & Demand. I also touched upon the = subject during my brief posting teaching Corporate Finance to MBA students. But = I was wondering how you pragmatically apply these well-worn concepts to = your trading practices. Cheers, Harold Harold Josephson Tel: 323.850.1333 Fax: 323.512.8968=20 hj@hjosephson.com - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com] On Behalf Of Kelly Short Sent: Tuesday, August 19, 2003 11:06 AM To: canslim@lists.xmission.com Subject: RE: Beginners' CANSLIM Question (WAS: RE: [CANSLIM] What is = your profession? - off list) Harold, Yeoman? Second rank private is a better descriptor! And even that might = be overselling it! As for Supply and Demand, learning the CANSLIM trading system has taught me more about supply and demand than ever before. If = you haven't already, I highly recommend you read "Reminiscences of a Stock Operator" by Edwin Lef=E8vre. "http://www.amazon.com/exec/obidos/tg/detail/-/0471059706/qid=3D106131612= 6/sr=3D 1-1/ref=3Dsr_1_1/002-2534254-2664801?v=3Dglance&s=3Dbooks" It gave me a = great understanding of why the movement of any stock, whether up or down in = price, is a result of supply and demand. This relationship forms the = underpinnings of the CANSLIM trading system. Enjoy! Kelly - -----Original Message----- From: Harold Josephson [mailto:hj@hjosephson.com] Sent: Monday, August 18, 2003 11:12 PM To: canslim@lists.xmission.com Subject: RE: Beginners' CANSLIM Question (WAS: RE: [CANSLIM] What is your profession? - off list) Hi Kelly, Special thanks for the time and yeoman effort you spent compiling your = reply to our questions. It's such personal input that gives this group its uniquely delightful flavor. Harold P.S. I wasn't clear what you meant by it's all about Supply & Demand. Harold Josephson Tel: 323.850.1333 Fax: 323.512.8968=20 hj@hjosephson.com - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com] On Behalf Of Kelly Short Sent: Monday, August 18, 2003 12:25 PM To: canslim@lists.xmission.com 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?=20 2) How do you develop your Watch List 3) How and when are you alerted to breakout opportunities? =20 4) At what point do you buy? =20 5) Do you gradually increase your positions?=20 6) Do you follow the CANSLIM "stop" recommendations, or might you exit earlier?=20 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?=20 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.=20 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.=20 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.=20 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? >=20 > Non-retired. Heck, just getting started (put me in the under 30 = category). > Technology, business development. >=20 > 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! >=20 > Kelly >=20 > -----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? >=20 >=20 > Retired! >=20 > Formerly food product manufacturing, product development, and = purchasing=20 > executive. Also, enjoyed a career in industrial quality control. >=20 > Using CANSLIM and variations thereof to maintain and improve net worth = of=20 > assets in retirement. >=20 > I'll bet the answers you receive to your email will reveal a = fascinating=20 > variety of high accomplishments by our pals in CANSLIM -- because it > requires such=20 > intensive intellectual effort. >=20 > Regards, >=20 > Dave S. >=20 >=20 > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. >=20 > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. *************************************************************************= *** ***************************************** IMPORTANT: This e-mail message and any attachments contain information intended for the exclusive use of the individual(s) or entity to whom it is addressed and may contain information that is proprietary, privileged, confidential and/or exempt from disclosure under applicable law. If you = are not the intended recipient, you are hereby notified that any viewing, copying, disclosure or distribution of this information may be subject to legal restriction or sanction. Please immediately notify the sender by = electronic mail or notify the System Administrator by telephone (518)292-5180 or e-mail (administrator@empire.state.ny.us) = and delete the message. 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