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 : CANSLIM - COAST TO COAST -- Ignore unavailable to you. Want to Upgrade?

To: Bruce A. Brotnov who wrote (3182)	3/22/1998 9:27:00 PM
From: ftth	Read Replies (1) \| Respond to of 6445

Hi Bruce, boy I guess I need to start reading my IBD again, rather than letting them pile up in a corner. I'm using dailyGraphs on-line, so I've been slackin' off in the IBD reading department. Sorry to rehash something you'd already talked about, but I did a quick scan and didn't see it mentioned before. So, judging from the chart, it must have been in Wednesday's IBD. Hopefully that means in will be on (or already is on) O'Neils institutional BUY list. I'll find out and let you know. Bummer (for me) on the oil production cutbacks. I sold my MDCO Friday and rolled it into RADAF. dh

To: Bruce A. Brotnov who wrote (3182)	3/22/1998 10:46:00 PM
From: ftth	Read Replies (1) \| Respond to of 6445

Hi Bruce, if you get a chance, and if it is a relatively straight-forward calculation, can you explain how you arrived at your price target. I always like to see different methods of arriving at price targets. I have a real tough time coming up with accurate price targets for stocks that haven't really gone down. I sort of view it as, sure, I could come up with a fundamental-based price target based on, e.g. PEG ratio reaching some level, but that would be MY target, not necessarily the market's target--and the market doesn't know or care what I think. When there's been a decline in the past, I can go back to that point and figure out what certain heavily-followed ratios were at, and use that as a confirmation for future selloff points (or when the same group would find valuations attractive again) along with the technical picture. This naturally all falls apart if the chart shows a clear change of character in the interim, meaning that a different set of people are the dominant hands, and their sell discipline is probably different. Also, depending on the absolute levels of some of the heavily-followed ratios, I can sometimes eliminate them as possible sell influences simply because this type of crowd doesn't know, care, or look at that particular ratio. For example, if the PE on most recent fiscal year is 500, and on next FY estimates its 60, it's a pretty safe bet that there are no pure value players in the stock, so the types of things that would cause that type of invesor to sell would not be sell triggers in this stock. In general, this only works on stocks with relatively small floats and relatively small institutional sponsorship; stocks with large floats and dozens of institutional investors have too much variety in their investor's investment methods. For those cases, the technical picture is the only way. Also, once the momentum crowd takes over, fundamental-based ratio sell points don't work very well I've found, with one exception: PEG on next FY's estimated earnings. This seems to me the "in" ratio for the momentum crowd, and since "the chart looked toppy" doesn't fly as a reason to sell (at least publicly), they need to "announce" their reason for selling using some fundamental-sounding" reason. dh