Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Investor's Business Daily -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (69)	8/19/2000 1:57:58 PM
From: luis a. garcia	Read Replies (1) \| Respond to of 164

Paul you and I sound like kindred spirits... nobody seems to care about our stocks... It may help you to just concentrate on eliciting a response on one at a time... a list requires a lot of research. Canslim works if you understand it properly.... but I think it suits best the fat portfolios not the average investor with time to reasearch and a little cash to invest. Canslim picks out stocks that got on the train and left the station ....and will motor on forever like msft,sunw,intel etc....Canslim will give you a world of hurt if you pick stocks LATE in their cycle. So you stress over wether your stock that you OVERPAID a premium to get in on is basing or distributing and since the professionals know their biz and paint the tape you DON't KNOW....(remember all wars are based on DECEPTION every battle is won before its fought) and that is why bill o'neils method is of LIMITED use. IT DOESN'T HAVE AN EXIT STRATEGY. good luck luis ps In all fairness I don't think anybody can follow more than six stocks properly so its understandable the focused and committed investors get all bothered with new prospects....they either find it bad luck or a threat to them or a distraction that puts them off their game....

To: Paul Senior who wrote (69)	8/19/2000 6:40:57 PM
From: -Mad-Jon	Read Replies (2) \| Respond to of 164

Paul Senior - You'll read about HUF in IBD after it's posted 8 sequential quarters of accelerating earnings growth, and its price has been appreciating faster than 99.9% of the equity universe for 2 straight years; it will then be a suitable CANSLIM candidate. Meanwhile, the scooters, millions of them, will have started to become cobweb farms in attics across the nation, and HUF will be on the verge of preannouncing a profit disappointment, which will then reset its ratings to numbers approaching zero - after millions of CANSLIM investors have taken their positions. Fortunately, we will all have 8% downside stops set, so if we can get timely fills when HUF crashes, we will have followed the CANSLIM method and escaped with our collective hides. This is an exaggeration, of course, but something that is entirely possible in the IBD/CANSLIM universe. I remember seeing HAUP at the top of the lists repeatedly; I bought, got shaken out during a little correction while HAUP was in the 30s, pre-split; it ran up to 74 or something immediately after I sold. Then, they announced a split, then missed their number; they're now trading at 6. The inviting ratings of IBD are backward-looking, and can be a dangerous trap. There are many potential big winners not on the lists, that aren't highly rated because of their price, or lack of earnings; that doesn't mean they're worthless stocks, or that they won't go up - they just don't fit O'Neil's CANSLIM recipe. As far as I'm concerned, all stocks are potential investment candidates; given the size of that field, I welcome any set of screens to narrow the field to likely winners. As it happens, IBD is a good set of screens; except for some of the IPOs I've gotten from Wit, my best performing holdings are in the IBD top 200; most are in the top 50. Having said all that, I've got an eye peeled now on HUF - and SMRA, and AVN; AINN is currently being very nice to me. If I see them start acting nice, I might jump in. With 8% downside stops set, of course . . . Regards, Jon

To: Paul Senior who wrote (69)	8/20/2000 11:26:12 PM
From: adairm	Respond to of 164

Hi Paul! Nice to hear from you. Yes, I have a MBA in Finance and Accounting. (Double Major.) Yes, I know all about discounted cash flow, Return on Equity, and traditional fundamental analysis. But, I've learned something else. Fundamentals don't move stocks. Oh, eventually, earnings will. Let me repeat that, Eventually, earnings will move the price of stock. Either up or down. But the price on any given day is set by emotions. It's the perception of the value (as represented by the price) that is bid by traders of the stock. Those traders who think the value will go up in the future (ie. earnings will rise or the 'discount rate' goes down) bid the price up. Those that think future earnings will go down or the discount rate to go up, sell. A lot of traders don't know that's what they're doing. They buy (or sell) because they think the PRICE is going up (or down). Few stop to consider that they're bidding the value of the company higher or lower. That is how stock get 'overbought' and 'oversold'. So what? I decided to become a 'growth investor' rather than a 'value investor'. Why? The really great fortunes are made with growth stocks. Sure Warren Buffet has done great. How much better would he have been had he invested in MSFT rather than KO? Suppose he bought CSCO rather than G? Did he have DELL in his portfolio? Nope! Does he have SUNW now? Sorry! I'm not here to bash Mr. Buffet, but I want to focus on those stocks that have a chance to seriously outperform. Before you write me off as a gambler, I must say I look at the fundamentals of a company and I have to understand and believe in its business plan. I could never bring myself to buy Amazon, for example. I couldn't see buying a company that loses money on every book it sold. Now for a couple of points on CANSLIM. The 8% sell rule is for new purchases. It does not dictate a sell whenever a wining stock drops 8%. However, it calls for an 8% stop to keep you from making a serious mistake. I will agree the buy rules are easier to understand and implement than the sell rules. Personally, I find selling the most difficult part of investing. So, what I've taken to doing is to take partial profits in one of my winners if I find there may be new opportunities that I should be investing in. JDSU was one of those I bought last fall. Paul, there's no one way to invest and be successful. I'll be frank: I haven't heard of most of the companies you mentioned. I wish you well with them. CANSLIM can be used as a method to assist you in timing when to buy the great growth companies: MSFT, CSCO, EMC, ORCL, HD, PFE, etc. If you choose to ignore it, well, that's your choice. Best, Adairm