From: canslim-owner@xmission.com To: canslim-digest@xmission.com Subject: canslim Digest V1 #19 Reply-To: canslim@xmission.com Errors-To: canslim-owner@xmission.com Precedence: canslim Digest Friday, 6 December 1996 Volume 01 : Number 019 In this issue: Re: [CANSLIM] Computer Industry [CANSLIM] More commentary on "M" Re: [CANSLIM] More commentary on "M" [CANSLIM] Bad Call? re: [CANSLIM] Bad Call? Re: [CANSLIM] Bad Call? Re: [CANSLIM] Bad Call? Re: [CANSLIM] 2 comments & a [CANSLIM] Bear Stearns coverage of computer industry Re: [CANSLIM] Bad Call? [CANSLIM] Market comments 12/6 Re: [CANSLIM] Bad Call? [CANSLIM] Bad Call? See the end of the digest for information on subscribing to the canslim or canslim-digest mailing lists and on how to retrieve back issues. ---------------------------------------------------------------------- From: berntes@ibm.net (Bern) Date: Fri, 06 Dec 1996 10:26:00 GMT Subject: Re: [CANSLIM] Computer Industry On Thu, 5 Dec 1996 20:36:28 -0500, you wrote: >I've got the book at home, anyone who wants to hear Bear's comments on >specific cos, email me. Ones covered are Adaptec, Apple, Compaq, Dell, >Digital, Gateway 2000, HP, IBM, Intel, Quantum, Seagate, Silicon = Graphics, >Sun, and Western Digital. > >tom w > Perhaps it would be of interest to the LIST to know just roughly if they say it's a buy, hold, sell, et cetera. if you don't want to go into long typing. Gui M ------------------------------ From: "David F. Cameron" Date: Fri, 6 Dec 96 7:37:24 CST Subject: [CANSLIM] More commentary on "M" Its early in the U.S. - an hour before the market officially opens, but I'm about ready to say charts be damned I'm getting out. This is not good, because I bought yesterday - and on margin to boot - but Mr. Green- span must want to cover his shorts. His comments seem to have sent the "M" part of CANSLIM into a tailspin overseas - so.... one thing we've all agreed on is DON'T FIGHT THE MARKET (emphasis is O'Neils' not mine...) Dave Cameron dcameron@harper.cc.il.us p.s. I just found out there is a Zoran Corp. trading under ZRAN. Have you been holding out on us, Zoran? ------------------------------ From: Zoran Mitrovski Date: Fri, 6 Dec 1996 09:56:43 -0500 (EST) Subject: Re: [CANSLIM] More commentary on "M" Dave wrote: > Its early in the U.S. - an hour before the market officially opens, but > I'm about ready to say charts be damned I'm getting out. This is not > good, because I bought yesterday - and on margin to boot - but Mr. Green- > span must want to cover his shorts. His comments seem to have sent the > "M" part of CANSLIM into a tailspin overseas - so.... one thing we've > all agreed on is DON'T FIGHT THE MARKET (emphasis is O'Neils' not mine...) I don't want to sound like a rude imbecile around here, but I have been sorta wishing for something HUGE to happen with the market so that I can experience and study all the associated phenomena around it. I've been reading lately quite a lot of derogatory comments about individual investors (amateurs) all coming from "seasoned experts" mainly saying that anybody could earn good money in a flying market like this. I am worried because I don't want to give too much weight to my trading abilities now, only to be convinced in their non existance when the "going gets tough". I wana see the "tough" and see myself in it, too. And I want it as soon as possible -- at least before I decide I could perhaps even trade for a living. ;^) > Dave Cameron > dcameron@harper.cc.il.us > > p.s. I just found out there is a Zoran Corp. trading under ZRAN. Have > you been holding out on us, Zoran? What can I say -- you caught me, Dave. ;^) Seriously now, I was surprised myself when I found about ZRAN last summer. And it is in the chip industry. I think the CEO's name was not Zoran though. I would be interested to find out how that co got it's name. Anyway, they snatched the name before I could do anything with it. Btw, Zoran is a very common name where I come from. "Zora" means "dawn" in Macedonian, and it is the female version of my name. Cheers, Zoran http://www.seas.rochester.edu:8080/ee/users/zmitrov/home.html ------------------------------ From: "David F. Cameron" Date: Fri, 6 Dec 96 13:45:46 CST Subject: [CANSLIM] Bad Call? OK... so I sold a lot this morning - at the open - and at the low. I thought CANSLIM was supposed to say get out with an 8% drop. Well, HELL, half my stocks were down 8% at the open - now they've all bounced back. Is this still a good rule? I think so. Did it work today -- not really. I'm curious to know what the rest of you did. I've been hearing from the experts here in no uncertain terms: Cut your losses - cut your losses - cut your losses. If you practice what you preach, certain of you - esp. Craig Griffin, Patrick Wahl, Tom Worley, and Mike Langston had to have some stops hit - and got out at the open as well. If so, did you really follow through? I did - I'm feeling kinda dumb right now - but not totally because I was margined - and didn't want to risk losing more capital than I already had. This group has been awfully silent of late - but inquiring minds want to know. Thanks, Dave "a little poorer" Cameron dcameron@harper.cc.il.us ------------------------------ From: Michael A Langston Date: Fri, 06 Dec 1996 16:50:20 -0500 Subject: re: [CANSLIM] Bad Call? dave cameron writes: > If you practice what you preach, certain of you - esp. > Craig Griffin, Patrick Wahl, Tom Worley, and Mike Langston > had to have some stops hit - and got out at the open as well. not me, my trading account is 100% in cash -- but even if i had some HGS longs here, remember: pull the trigger quickly if bad news is specific to your stock; a little slower if specific only to your stock's industry; and slower yet if bad news applies only to the broad market -- the street utterly kills a disappointing HGS stock nowadays, but it continues to buy the broad dips -- one day it'll be wrong, but no one can say for sure just which day that will be btw, it looks to me like HGS "may" be just about ready to go again, am keeping an eye on the russell 2k to see if can really begin to outperform -- might be a good weekend for sipping some single malt and running charts :) i was tempted to gamble a little on the possible MTC spinoff today, but sat on my hands -- sigh, this one could go either way on monday when the news hits mike ------------------------------ From: Jeff Beckham Date: Fri, 6 Dec 1996 15:19:20 -0700 Subject: Re: [CANSLIM] Bad Call? >I'm curious to know what the rest of you did. I've >been hearing from the experts here in no uncertain >terms: Cut your losses - cut your losses - cut your >losses. I for one hit all my stops today. aka-no stocks, lots of cash. I didn't have any "losses" per se, as I continued to move my stops up as my stocks went up. I do have some nice gains that were wiped out though. This gives me a chance to review my old holdings along with some new prospects, for when I jump back in. I think I'll watch for a while though until that "perfect" stock grabs my attention. The M in CANSLIM is acting very poorly as of late!! Jeff Beckham ------------------------------ From: Zoran Mitrovski Date: Fri, 6 Dec 1996 18:11:19 -0500 (EST) Subject: Re: [CANSLIM] Bad Call? Dave wrote: .. > I thought CANSLIM was supposed to say get out > with an 8% drop. Well, HELL, half my stocks were down > 8% at the open - now they've all bounced back. .. > Is this still a good rule? I think so. Did it work > today -- not really. .. > I was margined - and didn't want to risk losing > more capital than I already had. Dave, I'm no expert but I'd like to say what I learned about this. The "cut losses" rule to me is THE BEST of all. Protecting your play money while perfecting your skills and instincts seems to be the name of the game. I simply cannot watch a losing stock that struggles below my buy point (and on a high volume, to boot) while knowing that there are at least dosens of winners breaking out at that very same moment; being kicked up by nice volume spikes; and never intending to look back (well not at least for the few days/weeks of the best ride up). Now, there's a question I wanted to ask. When we talk about cut-loss rules, where does margin go into play here? Shall one cut them at 8% NET loss (with the margin part included) or the 8% is strictly related to the price movement (which would then imply higher NET losses because of the margined purchase). For me personally, 8% price loss is too much when you are on margin. I also wouldn't stick to that number religiously. With this I mean, I would cut the losses even sooner (much sooner) if something else tells me something is not going as planned with that stock. For example, if it has been trading within tight day ranges for months before, and it suddenly decided to make deep swings with a downward momentum (and, perhaps, on high volume chunks), I'd dump it even before the 8% level and start looking for a more consistent performer. I just can't stand watching a looser when I know I'd rather have my money elswhere (even cash, if I didn't have the time to do proper research), and $20/$40 is all it would take to make the switch. Try to see the stocks you own as if you never owned them. Would you buy them today, if you had the cash to do so? If not, why is your money where you wouldn't want it to be? Hell, I got in PBK at 26 and got out at 25 5/8, and I never regreted it, although it went to 26 1/4 the next day. So what? I'm not saying that was the right thing to do, but maybe buying it at 26 wasn't either. Now, this specific market plunge was caused by Greesnspan's statement, and there are hints of interest rates being raised on the Dec. 17 meeting, and you did a smart thing getting out and cutting your losses. The rule works. Read again the O'Neil's reasoning behind it. By getting out you just paid a premium on your insurance against a steeper market plunge. Hell, the market could have easily gone 10-15% down today and never returned in the next year for all we know. Now if that happened, you'd be feeling much dumber for not being disciplined, and cut your losses. And to finish...After playing HDCO up 1.5 points for coupla days last week, of course, I'm in cash again. As I said before, being a novice, I can gain much more by watching and learning in times when there are so many signs of a market correction. Quick ins and outs is what I would perhaps try to do occasionaly when I sense the momentum on a canslim stock going. > Dave "a little poorer" Cameron > dcameron@harper.cc.il.us Cheers, Zoran ------------------------------ From: Johan Van Houtven Date: Sat, 07 Dec 1996 00:57:54 +0100 Subject: Re: [CANSLIM] 2 comments & a At 03:02 PM 12/4/96 GMT, you wrote: >I bet 90% of my ideas come out of the Daily Graphs. I add the things >that look good to the list of stocks I track with TC2000 and wait for >breakouts. I'm pretty simple-minded about this stuff. > >As far as what I think looks good - the usual stuff, pretty much. First >is a good chart pattern, such as Safeskin formed in the last few months, >then all the Canslim things, high EPS, RS, etc. I also look at the chart first. Take a look at APCC. Building a firm base. Looks like a low risk, nice potential reward situation to me. APCC make UPS's. Uninteruptable power supplies. A few years ago only one distributor here in Belgium was selling APCC UPS's. Now the 4 biggest are all selling them. There products are excellent. Also recovered very nicely today (Friday 12/6), after the Greenspan induced mini-crash. Disclaimer: I already have a starting position at 24.75 in APCC. Made good money on AALR. Bought at 12 on 11/26/96 sold at 13.625 12/5/96. Sold too soon, could have sold at 14 or 14.124. Nevertheless, I'm happy. Approx 10% in two weeks. Currently researching ALPH. Anyone else in APCC? ------------------------------ From: "tom worley" Date: Fri, 6 Dec 1996 20:40:10 -0500 Subject: [CANSLIM] Bear Stearns coverage of computer industry There have been several requests for info on Bear's review of this group. The book itself is 80 pages long, and I have no scanner, so much as I like typing, forget the entire book. I have had several requests for a specific stock, and will respond individually to them. One good suggestion was a kinda summary, which follows here for those interested: Following is quoted from Bear Stearn's "Computer Quarterly" dated Dec 2, 96 Continuing improvements in price performance, owing to gains in semiconductor process technology, mean that every new "turn of the crank" in process technology results in products that are faster, cheaper, smaller, and/or easier to use. These advances have increaed productivity in corporate environments. Two significant shifts in buyer behavior have resulted in accelerating demand. First, information technology spending has gone from being perceived as a "necessary evil" to automate office functions to being viewed as a means to offer a competitive advantage or to maintain competitiveness. This change has led to greater demand for higher=performance systems. Second, the focus on "total cost of ownership" has highlighted the relatively low cost of hardware relative to total info tech costs, which has reduced the impediments to spending on hardware. There is also great interest in using technology to manage technology, or "computers managing computers". Indeed, we believe that unit demand in 1997 may continue at this year's pace owing to multiple product cycles, favorable pricing, and replacement cycles. In 1997, we expect to see new product cycles based on Intel's multimedia-enhanced Pentium (i.e. MMX) in Q1, 97, followed by "Klamath" the MMX version of Pentium Pro. Intel is expected to launch its 64 bit "Merced" chip in 1998, which will have significant impact on the workstation market. (author's note: above para clearly covers O'Neill's reference to new products/competitive edge) Looking at 1997, we could see a continuation of the solid unit growth of 1996, with gains in the 15%-20% range as a result of continued elasticity, new product cycles (Pentium MMX, Pentium Pro) and replacement cycles. SUMMARY: Company Rating Q1 Rpt Est Q1Y6 1st Call FY96 FY97 PC Companies Apple Neutral 1/16 .06 -.56 -.04 1.00 1.50 Compaq Buy 1/16 1.53 1.17 1.49 4.60 5.60 Dell Buy 2/12 .80 .35 .79 2.57 3.20 Gateway 2000 Neutral 1/23 .96 .74 .99 3.05 3.80 Enterprise-wide Systems Digital Neutral 1/22 .12 .91 .14 .50 2.50 Hewlett Attractiv 2/17 .70 .75 .76 2.80 3.35 IBM Attractiv 1/12 3.82 3.66 3.87 11.00 12.75 Silicon Graph Neutral 1/16 .22 .30 .24 1.15 1.50 Sun Attractiv 1/15 .41 .32 .42 1.68 2.00 Disk Drive Cos Quantum Attractiv 2/4 .52 .36 .48 1.45 2.90 Seagate Buy 1/09 .69 .67 .73 2.95 3.75 Western Dig Attractiv 1/23 .94 .44 .90 3.90 5.25 Computer Related Semis Adaptec Buy 1/17 .44 .34 .42 1.66 2.05 Intel Buy 1/14 1.72 .98 1.76 5.40 7.50 Please remember that Bear Stearns is a market maker in many of these and/or has an investment banking relationship. I cannot be responsible for the accuracy of the above, including any typos in the book or that I made. I am making no recommendations, am simply providing this info as a courtesy in hopes it helps all of us get a broader view of this group in particular, and the market in general. REMEMBER, CANSLIM is not intended as a daytrading tool, O'Neill works for mutual funds and institutional money managers, he looks, like the Feds, long term. He is a buy and hold kind of guy so long as the stock behaves. I will post any coverage/response on a specifically requested stock this weekend as time permits. Unfortunately, got a lot of domestic stuff to take care of, along with the usual football games, but will try to get it all out by Sun evening, so stay tuned. Will post to the individual unless I have received multiple requests. Hope this helps good luck tom w ------------------------------ From: "tom worley" Date: Fri, 6 Dec 1996 20:51:51 -0500 Subject: Re: [CANSLIM] Bad Call? Good answer, Mike, I think you said what I was trying to say but in a hell of a lot less words and much more to the point. Altho, not to just be a contrarian, I am almost 100% invested, so just goes to show how two different CANSLIMers can view the market. Actually, I suspect Mike was in larger cap, more liquid stocks while I am still fighting the doldrums in the microcaps. The effect on them from a day like today is radically different. tom w - ---------- > From: Michael A Langston > > not me, my trading account is 100% in cash -- but even if i had some > HGS longs here, remember: pull the trigger quickly if bad news is > specific to your stock; a little slower if specific only to your > stock's industry; and slower yet if bad news applies only to the > broad market -- the street utterly kills a disappointing HGS stock > nowadays, but it continues to buy the broad dips -- one day it'll > be wrong, but no one can say for sure just which day that will be > > btw, it looks to me like HGS "may" be just about ready to go again, > am keeping an eye on the russell 2k to see if can really begin to > outperform -- might be a good weekend for sipping some single malt > and running charts :) ------------------------------ From: "tom worley" Date: Fri, 6 Dec 1996 20:01:31 -0500 Subject: [CANSLIM] Market comments 12/6 Today was one of those days where I REALLY wish I had access to my home computer before I get home at night, I might have been able to save Dave and others some bucks. I will repeat here what I was saying this am at about 9 am: First, having long studied Greenspan, I know him to be a cautious speaker. He actively does not want to say something that will, by itself, move the bond or equity mkt. Reading his comments and the interpretations being placed on them, I knew (and was proven right) that he would be on air today trying to explain more clearly what he REALLY meant. Second, even more unlikely is that Greenspan would make specific mkt comments at an hour which would allow Japan and Europe to front run the US mkt. Third, unemployment nrs were released before the opening and were below expectations both in terms of the unemployment rate overall as well as jobs created. This was one more verification of the Fed's position that the economy is slowing AS THEY EXPECTED. It is also significant that this close to Christmas (when a lot of temps are hired) that it was below expectation, even tho seasonal sales so far appear ok. Fourth, the equity mkt at times like this will tend to take its lead from the bond mkt, esp where Greenspan and important economic reports are involved (here we had both). The bond mkt opens before the equity mkt, had been down over 32 ticks, and before 9:30 had already reversed to down 14 ticks. This clearly indicated a strong down opening followed by a reversal. Fifth, I fortunately had the time at the opening to follow the Dow 30 closely (since it is the most closely watched index). It was over two minutes into the opening before the first one opened for trading (KO, down 1.5). Five minutes into the market, only 8 had opened, all naturally down most over a pt. At that point, the index was down over 28 pts. For those who, like me, compared the opening of the Dow 30 in real time with the dow index, it was apparent that the Dow was not falling/collapsing, just simply reflecting the additional effect of each indexed stock being added to the composite. By the time most of the 30 (28 total) were open, each were down and almost all (or even all) over a pt. The index now was at minus 80 plus, approaching 90, and the circuit breakers had been in place for over 10 minutes. Had all 30 opened simultaneously, the opening would have been about a minus 90, followed by a small slippage to minus 110, then by 10:30 or so a strong reversal taking it back to about a minus 50. I think at one point we actually came back within 25 points of yesterday's close and the circuit breaker was taken off. LESSON TO BE LEARNED: CANSLIM is a theoretical approach to analyzing individual stocks, not judging the market action. To grasp the subleties of Greenspan/Fed Reserve words and actions, you have to try and think like them. Their focus is not on today's reports, it is on whether today's reports fits their models they developed six to nine months ago. They have been saying the economy is slowing into the range they seek to avoid inflation without slipping into a recession. Today's report showed exactly that. Therefore, Greenspan's remarks last night were out of character and had to be taken with caution. Combined with the unemployment nrs, today's action, while on the neg side, was not a collapse and very temporary. CONCLUSION: today was a Kmart blue lite special, let the panic subside, then buy quality. Most of the techs went down 4-5 pts, then rallied at least 2-3 pts, great time for day trading if you have large capital and courage. There were some notable examples, DELL stands out. Dropped about 5 pts, then rallied to multiple new highs, up over plus four pts in the afternoon. CPQ, TXN, MSFT and many other techs actually did very well, either closing up for the day or at least recovering most of their early losses. Because of the conflict between the apparent bad news (Greenspan) and the good news (unemployment nrs), there was general chaos on the exchanges. I generally am not willing to throw in a market order at the open without some idea of where my order will be executed. This goes for both a buy and sell. The brainless brokers I support who did this today were universally wrong, worst case was 2500 MU sold on the open 2.5 pts below where it closed. My best advice in a chaotic mkt like this is hold your sell order at least until the stock is trading. Most of the damage will be on the gap down, and you can't avoid that. Once it is trading, assess the situation and see if you still want to sell. In today's case, because of the countering good news, I saw it solely as a buying opportunity. Was I stopped out on anything? No. As I have mentioned before, finances have prevented me from trading the higher priced stocks that I like. The small caps were barely affected by today. If it goes on for another 2-3 days, then I may get hurt. I currently only hold one large cap, and it only dropped about 5%, then recovered about half of this. I did attempt to add to two small cap positions, but neither dropped measurably and I was not filled. I will admit I have an advantage over most brokers and investors, during seven years as an active broker and 30 as an investor, I have made it my priority to understand how the market trades and what influences it. I have watched the character of the Fed Reserve change as well. During the Carter years, it was knee jerking, doing gross adjustments in an attempt to move the economy. All this ultimately accomplished was high inflation and interest rates. During the Nixon years, the Feds started to understand their job, but back then they were typically looking out no more than 3 months. By the end of the Bush era, the Feds were starting to plan their models on 5-6 months out, and currently they are looking at almost 9 months. Bottom line, they are now, and have been for over 18 months, fine tuning the economy. For the past two years I have been in sync with their actions. My only error two years ago was that I was about three months off in timing because I didn't realize just how far out the Feds were looking. Will the Feds increase interest rates in Dec, IMHO, absolutely not! How about the Jan/Feb period, I see zero likelihood at this time. When economic reports are published, it is important to measure them not just in their content but how they stack up to what the Feds had already expected those reports to show from about 6 months or so ago. Remember it was back in July or August that the Feds indicated the economy (which then was running ahead of growth expectations) to slow down in Q4. Reports for the past 3 mos have shown this to be the case. Therefore I read the Feds as taking no action for the present. In fact, if productivity in Q1 and Q2 does not show at least a small increase before the summer doldrums, the Feds may even cut rates by 25 basis pts. Remember, if I am right you heard it here first, if I am wrong, I get to do the Garzarelli spin and change my timing. When you try to assess the "M" of CANSLIM, it is important to step back from our usual mentality which is focused on specific stocks (usually techs, which by themselves are volatile) and look at the overall picture. Most important of these views is whether the mkt is bull/bear, and short term is up/down. However, you also have to try to understand why the mkt is behaving so. When you consider actions by the Feds (at least the group we have currently), one thing is for sure, they do not knee jerk. Sorry for running on like this, I guess this is my record post. Probably should get a job writing a newsletter, but no one would pay me what I think I am worth. Oh well. Hope there are at least a few thoughts here that will help you put today's action into perspective. Every day is a learning experience or else it was wasted. good luck tom w ------------------------------ From: "Richard S." Date: Fri, 6 Dec 1996 23:19:21 -0600 Subject: Re: [CANSLIM] Bad Call? I running my stops a little looser than the 8%, but I have several that are within 1/4 to 1/2 of popping. One more bad day like today and I'll be about 70% in cash, which might not be so bad, there could be some good buys coming up pretty quick. Richard - ---------- : From: David F. Cameron : To: canslim@xmission.com : Subject: [CANSLIM] Bad Call? : Date: Friday, December 06, 1996 1:45 PM : : OK... so I sold a lot this morning - at the open - and at : the low. I thought CANSLIM was supposed to say get out : with an 8% drop. Well, HELL, half my stocks were down : 8% at the open - now they've all bounced back. : : Is this still a good rule? I think so. Did it work : today -- not really. : : I'm curious to know what the rest of you did. I've : been hearing from the experts here in no uncertain : terms: Cut your losses - cut your losses - cut your : losses. If you practice what you preach, certain of : you - esp. Craig Griffin, Patrick Wahl, Tom Worley, : and Mike Langston had to have some stops hit - and : got out at the open as well. If so, did you really : follow through? : : I did - I'm feeling kinda dumb right now - but not totally : because I was margined - and didn't want to risk losing : more capital than I already had. : : This group has been awfully silent of late - but : inquiring minds want to know. : : Thanks, : : Dave "a little poorer" Cameron : dcameron@harper.cc.il.us ------------------------------ From: patrick.wahl@unpcbbs.cts.com (Patrick Wahl) Date: Fri, 6 Dec 1996 14:21:00 GMT Subject: [CANSLIM] Bad Call? DC>From: "David F. Cameron" DC>Date: Fri, 6 Dec 96 13:45:46 CST DC>Subject: [CANSLIM] Bad Call? DC>OK... so I sold a lot this morning - at the open - and at DC>the low. I thought CANSLIM was supposed to say get out DC>with an 8% drop. Well, HELL, half my stocks were down DC>8% at the open - now they've all bounced back. DC>Is this still a good rule? I think so. Did it work DC>today -- not really. One thing I am not clear on is if you sold 8% from your buy point. If so, then you did the correct thing. Who knew where the market would go from the open? However, if you were just selling because things were looking a little spooky and prices of your stock were down 8% from some point yesterday, say where you were already sitting with a 20% profit, then you should have held on. One thing I try to keep in mind when you have these scary looking 2 or 3% drops in the overall market in one day, is that markets don't go straight down, they don't turn on a dime, and if there is a bear market ahead, it takes time for the market to top out and start down. A person should have time to get out, and meanwhile, if holding a strong stock, it seems best, to me anyway, to hang to it as long as possible. A couple of things to keep in mind for the M in canslim are that we are in a seasonally strong period, Dec-Feb, so that should keep the market from going down too far, barring the development of any sort of extreme situations. Also, interest rates are low and generally bond prices are in an uptrend, and that is usually a positive for the market. DC>you - esp. Craig Griffin, Patrick Wahl, Tom Worley, DC>and Mike Langston had to have some stops hit - and DC>got out at the open as well. If so, did you really DC>follow through? I guess I pretty much explained this above. I deviate just a tiny bit from the usual 7% rule on loss cutting in thinking that you can fudge it just a bit, say up to 10% loss before bailing out. 7% is somewhat arbitrary, and if you buy a bit off the exact pivot point, and that can be just a matter of being a few hours late in buying a stock, then you may need to give a stock a little more slack. If possible, I like to pick a chart point that makes sense and use that if it permits tight enough risk control. As an example, I just bought a stock at 22 and change, the base formed at 20 3/4 to 21 1/2 or so, and a 7% stop means only a pull back to the base, not necessarily a meaningful price move. I'm keeping a stop just under the recent base, which works out to 10%. But if it hits that I am definitely out, and if the stock hasn't shown any progress in a week or two I may sell it even at a 2% loss, or whatever it may be. I hope all this is somewhat useful. ------------------------------ End of canslim Digest V1 #19 **************************** To subscribe to canslim Digest, send the command: subscribe canslim-digest in the body of a message to "majordomo@xmission.com". If you want to subscribe something other than the account the mail is coming from, such as a local redistribution list, then append that address to the "subscribe" command; for example, to subscribe "local-canslim": subscribe canslim-digest local-canslim@your.domain.net A non-digest (direct mail) version of this list is also available; to subscribe to that instead, replace all instances of "canslim-digest" in the commands above with "canslim". Back issues are available for anonymous FTP from ftp.xmission.com, in pub/lists/canslim/archive. These are organized by date.