Go to Jeff Salisbury LWGate Home Page.From: "Dan Sutton" <dsutton@uswest.net>
Subject: RE: [CANSLIM] Starter Kit
Date: Mon, 2 Aug 1999 17:54:25 -0600
Previous Article (by Subject): RE: [CANSLIM] Starter Kit Pinakin Patel
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Pinakin I think that at some point in most investor's lives, there comes a time when following the latest guru appears very attractive. Whether subscribing to their newsletter or simply following the philosophy espoused therein, it will soon become evident that investing principles and techniques developed by someone else are not the best avenue to investing success. Blindly following tip, suggestions and blackbox secrets will lose your money faster than bad luck at the blackjack table. CANSLIM is no exception. My experience with pure CANSLIM techniques has been less than a resounding success. Whether I read a chart wrong, placed a stop at the wrong point, missed a count on a distribution day or didn't spin around three times while holding my nose...there always seemed to be some arcane detail that I missed. I will admit that I may have not fully understood and applied all the proper analysis, but I did not have the free time to do all the work. After a few winning trades and an equal number of losing trades, I began to research other types of stock selection and investing. I have a rather large database in MSACCESS that I put all interesting investing articles into. As a new concept comes up, I will look through the database to compare that to what I have already saved from different writer's perspective.. The most important concept derived from all books, magazines and letters is to stick to your plan. Whether it be CANSLIM, HGS (High Growth Stock ala Ian Woodward), Motley Fools, Mutual Fund switching, buy and hold...whatever, stick to your plan. Do not jump around between different stock selection methods, or various entry and exit strategies. Stick to one and don't change. Your investment style and success is determined by a number of factors including your willingness to take risk. If you follow a guru, there will be times when you can't stomach the drawdown and you will make a change to the investing plan. At the risk of igniting a flame war, following is how I invest (even though it is not strictly CANSLIM) and the tools I use. Software:TELESCAN, Supercharts and TC2000 TELESCAN allows me to search all stock for certain fundamentals. TC2000 allows me to search all stocks for technical patterns and to download any price history quickly. Supercharts alerts me to the particular buy and sell signals that I have programmed in. Both TELESCAN and Supercharts allow extensive backtesting of your ideas. Broker: Waterhouse I trade online and only make decisions after the market close. I do not daytrade and do not make buy or sell decisions during market hours. All orders are keyed outside market hours. I have used Waterhouse for five years and am happy with them. I have had several favorable fills (less than the limit price I had keyed in), but as in many things in life...nothing is perfect. Stock selection: I construct a watch list using a number of criteria. Most have evolved from CANSLIM and HGS. I look for improving quarterly earnings, improving sales, good ROE, history of positive earnings surprises, history of increasing earnings, and a few other minor items. As these stocks appear I put them into a Watchlist in TC2000. The point being that purchase candidates are usually made far in advance of the actual purchase, and a candidate only makes the list if it passes the initial screening process. Making the list does not mean I will buy it. I currently have about 100 stocks in the list. Any one of them would probably fail a pure CANSLIM approach to be a candidate. I review the candidates to add or remove them on an ongoing basis, but since the basis for adding a candidate depends heavily on quarterly data, changes to the watchlist are not done on a daily basis. Buying and selling: After each evening's price download, I run the prices through Supercharts and have the program scan for a predetermined buy signal. The exact signal or trigger is a personal decision, Vic Sperandeo's 7 point trigger works well, Connie's EMA approach works well as do a number of other methods. I use one based on the Stochastic RSI, but again the exact method is a personal choice. The buy trigger needs to be an unemotional decision that you are comfortable with based on backtesting and your own willingness to accept risk and drawdown. There is no Holy Grail. Guru opinions: I do not subscribe to any newsletters, I do not listen to CNN, I do not look at any chat rooms, I do not solicit advice from a broker or any other vehicles that push somebody else's opinion. All specific opinions or recommendations from external sources only seem to muddy the water. Do all these things make me a great investor? Nope..all I want is an advantage over the house. How's that for a start? - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com] On Behalf Of Pinakin Patel Sent: Monday, August 02, 1999 8:04 AM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] Starter Kit John, Patrick Thanks for your comments guys. John, You say that your also a 'foreign' trader in the US market, so I presume that you also dont have access to things like the IBD? So how do you pick (research) your stocks? May I ask if you would be kind enough to give a quick note of the tools which would be useful (I know from the posts that a lot of the members are using tools such as BigCharts, I'm not sure if this is a freebie or subscription service). PS I am still interested in knowing how effective in your opnions CANSLIM is in practice! PPS Are there any other members out there who are using CANSLIM techniques to invest in other markets than the US? Regards Pinakin >>> "John Lynch" <johlynch@cisco.com> 08/01 2:04 am >>> Pinakin, As a Kiwi trading in the US (sometimes CANSLIM, more technical at present) I recommend using a broker like DATEK (my choice) or ETRADE who supports Internet trading. Sign on to DATEK online and print out the various forms. Mail these (including the W-8 form which lets the US Tax Department know where you'll be paying tax) to Datek. Then either wire or mail a check to Datek. At that point you can start trading. Regards, John - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Patrick Wahl Sent: Saturday, 31 July 1999 16:21 To: canslim@lists.xmission.com Subject: Re: [CANSLIM] Starter Kit > I am slightly confused, it seems to me that some of you are day trading but I dont see how canslim techniques can be of any help here? Again I would be interested to find out what sort of tools you would require for this sort of trading! There is a small but voluble group of daytraders on the list, and it really does not have anything to do with CANSLIM. You should be aware that if you decide to follow this discussion it is a completely different discipline. Don't know how to help a UK guy with a broker questions. Only thought is to find a broker that allows you to place orders both via phone and over the internet, you can then dump orders in at night on the internet, or adjust stops and so on at home after doing your analysis. - - - - - ---------------------------------------------------------------------------- - - CRESTCo Ltd. The views expressed above are not necessarily those 33 Cannon Street. held by CRESTCo Limited. London EC4M 5SB (UK) +44 (0) 171 849 0000 http://www.crestco.co.uk - ---------------------------------------------------------------------------- - - - - - -
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