Well I got out my old (1995 seems like an eon now that the internet has taken hold) copy of "How to Make Money in Stocks", to answer some of my own questions, and WJO has this to say, on p.77: "Is C-A-N-S-L-I-M Momentum Investing? No, CANSLIM has absolutely nothing to do w/ momentum investing. In fact, I'm not even sure what momentum investing is. Some analysts and reporters, who have no idea at all how we invest, have referred to what we're suggesting as momentum investing and have said that it's buying the stocks that have gone up the most and that have the strongest relative price strength. No one in their right mind invests that way.
That is not what we're doing. We're buying companies with strong fundamentals, large sales and earnings increases resulting from unique new products or services and trying to time the purchases at a correct point as the company consolidation periods and before the stock runs up dramatically in price.
To summarize this vitally important and rather complex subject [market direction], learn to interpret the daily general market indexes and action of the individual market leaders. Once you know how to do this correctly, you can stop listening to all the uninformed,costly, personal market opinions from amateurs and professionals alike." |
