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Strategies & Market Trends : Investor's Business Daily

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To: -Mad-Jon who started this subject11/29/2000 3:18:09 PM
From: - with a K  Read Replies (2) of 164
 
I just discovered this thread and was disappointed to see it become inactive. Therefore, I offer the following as an attempt to revive it. It is from some notes of a presentation I did to my investment club a few years ago.

OVERVIEW:
William O’Neill & Co.
Investor’s Business Daily

C-A-N-S-L-I-M

The Record Book of Greatest Stock Market Winners
· Analyzed over 500 of the biggest winning companies from 1953 to 1993
· Common traits:
· Accelerating earnings
· High relative strength
· Favor limited float
· Some institutional ownership; not excessive coverage (Lynch)
· Price near high
· Sell worst-performing stocks; let winners run

C = Current Quarterly Earnings Per Share
· Significant increase in earnings acceleration
· Look for at least 25% increase

A = Annual Earnings Increases (Look for meaningful growth)
· Consistent growth with increase over prior year
· Look for at least 25 increase
· P/E ratios not as important as change in EPS
· Earnings increases also more important than dividends or book value

N = New Products, management, or new highs
· Hot new product or service
· Major change within industry
· New management team

S = Supply and Demand (small cap plus volume demand)
· Small can be beautiful

L = Leader or Laggard
· Look for very best company, not the cheapest price
· Look for Relative Strength above 70 (probably good reason if below [laggard])
· Average Rel Str of greatest companies in last 40 years was 87

I = Institutional Sponsorship
· Takes big demand to move a stock price; institutional buyers are the largest source of demand
· Look for some sponsorship
· Buy stocks priced above $5

M = Market Direction
· Direction of general market should be positive
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