From: canslim-owner@xmission.com To: canslim-digest@xmission.com Subject: canslim Digest V1 #25 Reply-To: canslim@xmission.com Errors-To: canslim-owner@xmission.com Precedence: canslim Digest Wednesday, 18 December 1996 Volume 01 : Number 025 In this issue: [CANSLIM] Investor/Trader and Canslim Re: [CANSLIM] Introduction [CANSLIM] SEMX trading vs investing (was re: [CANSLIM] Introduction) [CANSLIM] Commentary on 'M' Re: trading vs investing (was re: [CANSLIM] Introduction) Re: [CANSLIM] SFAM running up Re: [CANSLIM] Introduction Re: [CANSLIM] Investor/Trader and Canslim Re: trading vs investing (was re: [CANSLIM] Introduction) Re: [CANSLIM] Re: Trailing PE Re: [CANSLIM] Introduction [CANSLIM] Re: Investing ( Was:Introduction) Re: [CANSLIM] Introduction Re: [CANSLIM] Re: Investing ( Was:Introduction) [CANSLIM] COMS [CANSLIM] Market Comment from DBC Re: [CANSLIM] Market Comment from DBC Re: [CANSLIM] Re: Investing Re: [CANSLIM] Re: Trailing PE Re: [CANSLIM] Re: Trailing PE [CANSLIM] COMS 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: "fjsabour" Date: Mon, 16 Dec 1996 10:07:02 -0800 Subject: [CANSLIM] Investor/Trader and Canslim Tom, Right on. Every investor needs an approach to ENTRY and EXIT points. It can be technical evaluation of the chart (which I like, and CANSLIM recommends, such as double bottom, cup and handle, head and shoulder, etc.), or fundamentals (such as projected earnings, or visiting the store and checking out the number of parked cars in the parking lot!!). I'm with you so far. EXIT should be as methodical as ENTRY. I personally draw two medium term moving averages and when they cross, I'm out. That is my *fluid* stop. A more mechanical approach is what Canslim recommends (8% or so). So far so good! Now, if I watch the tape and see a couple of large trades on down tick, and decide to EXIT( ignoring my pre-set or previously decided stops), then I am not a Canslimmer. I'm a true stock trader. Nothing wrong with that. It is not Canslim. If I choose a company with a large debt(ex. SGMA), or too much institutional followers(ex. IOM), then I'm not a Canslimmer either. Again nothing wrong with that method. I do it sometimes when the chart pattern looks solid and attractive. But it is not investment and surely is not Canslim. My 2 cents. Fred - ---------- > From: tom worley > To: canslim@xmission.com > Subject: Re: [CANSLIM] Introduction > Date: Monday, December 16, 1996 3:11 AM > > I think this is a decent explanation of the difference between a trader and > an investor. What is missing is that this is a CANSLIM based group, and one > fundamental of CANSLIM is buying on breakouts, which means the "watch" > candidates are not overlooked, they do not have unrecognized assets, if > anything they are already overhyped and trading at premiums. This puts this > philosophy much closer to the trader than would be the case for a value > based or a bottom fishing approach. Yes, CANSLIM is designed for everything > from short to medium to long term hold. On the other hand, probably the > most important rule is not to let losses get large. The typical investor, > with a stock showing what the investor believes to be good fundamentals, > will typically try to fight the market with logic and sound reasoning. > Result: often he's steamrollered. I have had, too often, a stock go against > me with no bad news or market conditions. If I didn't limit my losses, it > would have been too late when the news was finally released to the general > public regarding why the stock went down. This isn't to necessarily say the > slide was caused by insiders, it only takes one analyst reading a just > released 10Q a day or so sooner than I, and discover slipping profit > margins, or increased inventory, or higher rate of returns, or mention of a > future secondary, etc then drops his rating on the stock and sets off an > avalanche of selling. By the time the downgrade is reported, the damage is > done. > Because CANSLIM is based on breakout, it also works for traders since, > theoretically, at breakout point there is no overhead resistance, therefore > a quick couple of points is possible even the same day. > The diferences between traders and CANSLIMers mostly has to do with looking > at momentum vs momentum combined with future fundamentals. The difference > between traders and investors is far greater. > Just my thoughts, having watched all types of players in the market. > tom w ------------------------------ From: Zoran Mitrovski Date: Mon, 16 Dec 1996 13:56:17 -0500 (EST) Subject: Re: [CANSLIM] Introduction Fred wrote: > Please go back and re-read the original message. I was talking > about the trader's attitude in approaching, buying, and selling > stocks. This is not a personal issue. If it was, it would have > been addressed as such. > So, calm down. I didn't see anything personal. If it was, it would have been addressed as such. So calm down. More follows... > This is my answer to your fair question about traders and > investors: > As you know, stocks go up when there are more buyers than > sellers, and they go down when pressure from sellers exceed > buying interest. When as an INVESTOR you pick a stock for > purchase, you are > in essence saying, " I believe that this company's earnings will > rise over the years " or " I believe the glamour status of this > company will improve as time goes on," or " I expect the > understated asset value to be recognized " or a combination of > these three statements. You conclude these favorable > fundamentals will create more buyers for the stock than sellers > and that the stock will therefore go up in price. > When you choose a stock for quick profits (say a few weeks, or > in your case few days), it is another matter. Then you are > saying, " I believe there will be more buyers than sellers in > this stock in the next few weeks/days " Well isn't the "investor" saying the same thing about his picks: "I believe there will be more buyers than sellers in this stock in the next X amount of time"? It is the amount of buyers vs. sellers that ultimately define the price of the stock -- not the levels of the earnings or the glamour of the company. Both 'traders' and 'investors', the way you defined them, count on an increased ratio of buyers vs sellers to push the price up. > How can you know what > other people are going to do with this stock over the next few > weeks? To be truthful, you can not. So you are basicaly saying that the further the phenomenon into the future the better prediction of its behavior can you make. I respectfully beg to differ. If it is hard for me to predict what people will do with a stock in the next few weeks, then it would be many times as hard for you to predict what people will do with a stock further ahead in the future. > Just when you are convinced that a mass of buying interest will > build up in a stock over the near term, someone with a large > block of stock may want to sell. Countless elements can make it > difficult to predict stock actions over a short period. Noone said making money was easy. Why should less than "countless" elements be involved when a longer period of time is in question? The way I see investing (i.e. both 'trading' and 'investing' in your case) it is all a matter of maximizing the predictability of the price moves so that you can distribute your assets along the "TIME" and the "STOCKS" axes accordingly as to maximize your profits. There is one single 2-D time-stocks continuum (chessboard). The modern mantra preached to the "individual investor" is 1) go for the long haul and 2) diversify, and if you disregard it than you are either too stupid not to listen what the "wise men" are telling you or you are too greedy and agressive and will pay for those sinns eventualy. To me that's all a bunch of crap. If what really worked on the market was the same thing that was accepted by the masses then everybody would win on the market, and we all know that that's impossible. Btw, you avoided the answer to my question. Seems that the time-length is the only parameter that distinguishes a trader from an investor. What is the threshold timelength? Define "short period". > Traders > job is just about the most difficult way to make a buck! Speaking from experience, or is this some common market wisdom that I have yet to comprehend? And "investors" have it much easier with higher profits to boot, right? For those of you that got down to here. I APOLOGIZE for the lengthy article. I'll try not to waste your time like this again. Cheers, Zoran ------------------------------ From: "Michael R. Jeffers" Date: Mon, 16 Dec 96 12:43:29 PST Subject: [CANSLIM] SEMX To Zoran and all others that touted this stock, THANKS! I purchased a lot (which is a lot for me) at 14.25. Although I fit more into the lurker (which rhymes with shirker) mode, I appreciate the hard work all of you do in researching good picks, and then tell us about them. Whether or not this stock blasts through the roof, or falls into the cellar doesn't really matter. This is the type of company that has all the technical and fundamental properties I like, in particular a discounted PE relative to it's group and a strong group. Had I known about the stock myself, I would have bought it anyway. You guys just brought it to my attention. Of course three months down the line should the stock fail, I'll be kicking myself in the lower regions since I did only real quick checking on the company. (smile) There is one question I have however. I noticed in the IBD that it's group strength has advanced in three months from a low 100+ to a single digit high. I would think that group advance is a bit too fast for proper validation. Is that what others think, or do you think that the quick group rise is due to the beginning of a long term strong upward trend? Once again, thanks for being the great gals and guys you all are! Just Little 'Ole Me, Michael R. Jeffers ------------------------------ From: Michael A Langston Date: Mon, 16 Dec 1996 16:05:14 -0500 Subject: trading vs investing (was re: [CANSLIM] Introduction) ok fellas, mainly zoran and fred, i ain't gonna get into this argument -- we all know that canslim has momentum as one of it's components, and thus it's stop-loss rules force us all to act like traders at times (esp on failed b/o's) but i do think one of zoran's comments deserves a response: > If what really worked on the market was the same thing that > was accepted by the masses then everybody would win on the > market, and we all know that that's impossible. impossible in zero-sum games like commodity futures, yes, but not impossible in long-side stock transactions over time -- you musta been thinking of something else when you wrote that btw, seasons greetings to posters and lurkers alike! mike (who's still in cash, and still not encouraged by the recent "open-up-but-close-down" scenarios we've been seeing) ------------------------------ From: Linda Thomas Date: Mon, 16 Dec 1996 18:05:45 -0500 Subject: [CANSLIM] Commentary on 'M' I've been meaning to post this since Friday, but this was my first = opportunity. I've noticed that five month long trend lines on the Dow, S&P 500 and = NASDAQ have all been broken in the last few days of last week. The S&P = line was broken on Wednesday, the Dow on Thursday, and the NASDAQ on = Friday. With today's 23 point drop in the NASDAQ, it is now back to where it was = in the beginning of November. This seemed like a serious resistance = level at the time since it took three tries to get the NASDAQ composite = over 1260. From a chart perspective, if we drop below 1260, it looks = like we could go all the way to 1200. The Dow looks like it could drop to 6060 and the S&P to 715. I'd guess = that if we can rally off these levels then this could be a short term = correction but if we break them, then it could be a long way down. Of course, take this with however many grains of salt you feel = appropriate. I make no claims of being an expert or even correct. It = just seems likely from my basic interpretation of the charts. -Linda ------------------------------ From: Zoran Mitrovski Date: Mon, 16 Dec 1996 20:50:17 -0500 (EST) Subject: Re: trading vs investing (was re: [CANSLIM] Introduction) Mike L. wrote: > but i do think one of zoran's comments deserves a response: > > > If what really worked on the market was the same thing that > > was accepted by the masses then everybody would win on the > > market, and we all know that that's impossible. > > impossible in zero-sum games like commodity futures, yes, but > not impossible in long-side stock transactions over time -- > you musta been thinking of something else when you wrote that I agree, Mike, it's not impossible in long-side stock transactions because there's always new value created by the companies that "spoil" he zero-sum. But just look at the pretty consistent 80% of money (or fund) managers that underperform the market and you'll catch my drift. Also if you look at the market volumes, you can sense that there is a pretty decent speculation involved in the stock market as well. I really wanted to say "beat" instead of "win on". Anybody care to tell me how "long" and "short" (a security) got their names? Cheers, Zoran ------------------------------ From: "tom worley" Date: Mon, 16 Dec 1996 21:20:06 -0500 Subject: Re: [CANSLIM] SFAM running up I wouldn't be surprised if WON likes it as well - ---------- > From: KNOWLES, RICHARD > To: 'canslim list' > Subject: [CANSLIM] SFAM running up > Date: Monday, December 16, 1996 10:09 AM > > Hey Canslimmers, > > Glance at SFAM. On the handle and running up after passing 26. > > Rich Knowles ------------------------------ From: "tom worley" Date: Mon, 16 Dec 1996 21:43:08 -0500 Subject: Re: [CANSLIM] Introduction I'll risk jumping in here just to say that EXPECTATION, not future profits, drives the price. - ---------- > From: Zoran Mitrovski > To: canslim@xmission.com > Cc: Zoran Mitrovski > Subject: Re: [CANSLIM] Introduction > Date: Monday, December 16, 1996 1:56 PM > > Fred wrote: > (snip) > The modern mantra preached to the "individual > investor" is 1) go for the long haul and 2) diversify, Zoran, I always preached diversification to my clients, and will continue to do so. On the other hand, I am well diversified in my "paper" trading contest, and getting my head handed to me by, I suspect, one or two stock portfolios. (snip) > For those of you that got down to here. I APOLOGIZE for the > lengthy article. I'll try not to waste your time like this again. Zoran, you haven't wasted my time yet, and I'm not worried you will in the future. BTW, good call on SEMX, it's another I suspect O'Neill likes currently. > > Cheers, > Zoran ------------------------------ From: "tom worley" Date: Mon, 16 Dec 1996 21:33:52 -0500 Subject: Re: [CANSLIM] Investor/Trader and Canslim There is a danger to "micro managing" a stock position, and when several large trades can influence your position (either to buy or sell), then you are in trouble unless you are a true "day trader". I say this in the context of the market place. Often when a large block is traded, it is already placed in opposing hands. I have frequently seen a large block, 50,000 or more shares, trade at the bid, followed within minutes by a 50,000 share block a sixteenth or an eighth above the bid. This tells me the block was crossed. Yes, this does diminish other buying out there, but also says the stock is being handled. O'neill doesn't look trade by trade, he watches to see if the price of a stock is violating certain resistance/support levels, if it has broken some limit. He looks at daily and weekly up/down vol, accum and dist nrs, group performance, etc. I think watching a stock this closely will lead to you more often being shaken out on a winner than protected from a major gap down. tom w - ---------- > From: fjsabour > To: canslim@xmission.com > Subject: [CANSLIM] Investor/Trader and Canslim > Date: Monday, December 16, 1996 1:07 PM > > Tom, > Right on. Every investor needs an approach to ENTRY and EXIT > points. It > can be technical evaluation of the chart (which I like, and > CANSLIM recommends, such as double bottom, cup and handle, head > and shoulder, etc.), or fundamentals (such as projected > earnings, or visiting the store and checking out the number of > parked cars in the parking lot!!). I'm with you so far. > EXIT should be as methodical as ENTRY. I personally draw two > medium term moving averages and when they cross, I'm out. That > is my *fluid* stop. A more mechanical approach is what Canslim > recommends (8% or so). So far so good! > > Now, if I watch the tape and see a couple of large trades on > down tick, and decide to EXIT( ignoring my pre-set or previously > decided stops), then I am not a Canslimmer. I'm a true stock > trader. Nothing wrong with that. It is not Canslim. > If I choose a company with a large debt(ex. SGMA), or too much > institutional > followers(ex. IOM), then I'm not a Canslimmer either. Again > nothing > wrong with that method. I do it sometimes when the chart > pattern looks solid and attractive. But it is not investment > and surely is not Canslim. > My 2 cents. > > Fred > > ---------- > > From: tom worley > > To: canslim@xmission.com > > Subject: Re: [CANSLIM] Introduction > > Date: Monday, December 16, 1996 3:11 AM > > > > I think this is a decent explanation of the difference between > a trader and > > an investor. What is missing is that this is a CANSLIM based > group, and one > > fundamental of CANSLIM is buying on breakouts, which means the > "watch" > > candidates are not overlooked, they do not have unrecognized > assets, if > > anything they are already overhyped and trading at premiums. > This puts this > > philosophy much closer to the trader than would be the case > for a value > > based or a bottom fishing approach. Yes, CANSLIM is designed > for everything > > from short to medium to long term hold. On the other hand, > probably the > > most important rule is not to let losses get large. The > typical investor, > > with a stock showing what the investor believes to be good > fundamentals, > > will typically try to fight the market with logic and sound > reasoning. > > Result: often he's steamrollered. I have had, too often, a > stock go against > > me with no bad news or market conditions. If I didn't limit my > losses, it > > would have been too late when the news was finally released to > the general > > public regarding why the stock went down. This isn't to > necessarily say the > > slide was caused by insiders, it only takes one analyst > reading a just > > released 10Q a day or so sooner than I, and discover slipping > profit > > margins, or increased inventory, or higher rate of returns, or > mention of a > > future secondary, etc then drops his rating on the stock and > sets off an > > avalanche of selling. By the time the downgrade is reported, > the damage is > > done. > > Because CANSLIM is based on breakout, it also works for > traders since, > > theoretically, at breakout point there is no overhead > resistance, therefore > > a quick couple of points is possible even the same day. > > The diferences between traders and CANSLIMers mostly has to do > with looking > > at momentum vs momentum combined with future fundamentals. The > difference > > between traders and investors is far greater. > > Just my thoughts, having watched all types of players in the > market. > > tom w ------------------------------ From: "tom worley" Date: Mon, 16 Dec 1996 22:01:05 -0500 Subject: Re: trading vs investing (was re: [CANSLIM] Introduction) Welcome back, Mike. Thought you'd gone to sleep on us (or worse still, become a lurker!!!) (BTW, that's a call to all lurkers to at least come forward, introduce yourselves, and tell us a little about your background (investing and/or job skills) which could help support this group). I agree with Mike's comments on opening up and closing down, it's a disturbing pattern we are seeing too much of. I am even more concerned with the poor showing by NASDAQ compared to the NYSE composite and the bond mkt. For NYSE (understand DOW 30) to have paralleled today's NASDAQ performance, it would have had to close down over 130 pts, instead it was down about 38 pts. After an initial strong opening, techs failed miserably. Granted, NYSE was buoyed by the oils and the McDonnell/Boeing deal, and inflation concerns were hurt by higher oil prices (is this logical with Iran starting to pump??) Can we say MANIPULATION, kiddies? What's going on here, folks? I'm getting tired of the overworn "profit taking". Who's got profits left to take, at least short term? tom w - ---------- > From: Michael A Langston > To: canslim@xmission.com > Subject: trading vs investing (was re: [CANSLIM] Introduction) > Date: Monday, December 16, 1996 4:05 PM > we all know that canslim has momentum as one of > it's components, and thus it's stop-loss rules force us all > to act like traders at times (esp on failed b/o's) > > but i do think one of zoran's comments deserves a response: > > > If what really worked on the market was the same thing that > > was accepted by the masses then everybody would win on the > > market, and we all know that that's impossible. > > impossible in zero-sum games like commodity futures, yes, but > not impossible in long-side stock transactions over time -- > you musta been thinking of something else when you wrote that > > btw, seasons greetings to posters and lurkers alike! > > mike (who's still in cash, and still not encouraged by the recent > "open-up-but-close-down" scenarios we've been seeing) ------------------------------ From: "tom worley" Date: Mon, 16 Dec 1996 21:23:50 -0500 Subject: Re: [CANSLIM] Re: Trailing PE As reliable as the analysts who made the projections, the data they worked from, the companies they analyzed, the market the businesses made projections on, the employees who made the products, the sales staff who told the company what they would do the next qtr, etc. Come on, it's a forecast, for gods sake, it's not set in concrete, what part of "estimate" don't you understand? Forecasted PE is one element of what should be your "Plan", it allows you to anticipate what the mkt will do cuz you have an "idea" of what the mkt is EXPECTING!. If the nrs are in line or below, the stock should tank, if they are way ahead of expectation, stock should rally, anything in between, anybody's guess. Estimates will vary from analyst to analyst and co to co. If you want to try and apply this, Three Com (COMS) is due to report on 12/19, stock tanked over 4 pts today, short base around 65, better bases lower, Barron's forecasts 55 cents/share vs 37, Bear Stearns forecasts 57 vs 37, how many tech stocks have we seen lately (such as MU today reporting 10 cents including a 3 cent gain vs $1.51 a yr ago, expectation was from flat to 4 cents) where yr to yr was dismal, but stock did better than a very poor expectation? Here's one that's expected to beat last yr, let's see how good the analysts are on it, and what the mkt reaction is. Let's apply your question to Navy budget estimates, how many times do projects get completed at or under budget? Same thing, someone made an estimate, and it was factored on a lot of items out of control of the estimator. All it did was set a level of expectation, which Congress funded, then paid for the overage out of our pockets to keep the project going. tom w - ---------- > From: shyu@ait.nrl.navy.mil > To: canslim@xmission.com > Subject: Re: [CANSLIM] Re: Trailing PE > Date: Monday, December 16, 1996 11:15 AM > ------------------------------ From: OWENTIME@delphi.com Date: Mon, 16 Dec 1996 23:08:56 -0500 (EST) Subject: Re: [CANSLIM] Introduction Re: discussions of traders vs. investors. I'm curious how many CANSLIMMERS out there prefer put/call options for leisurely strikes into their breakout stocks. ------------------------------ From: "fjsabour" Date: Mon, 16 Dec 1996 21:56:49 -0800 Subject: [CANSLIM] Re: Investing ( Was:Introduction) My apologies to list members. This is a long and BORING message!! Zoran, I will try to answer your questions and be brief at the same time. You know, I much rather be analyzing stocks :-) If after reading this message and the one I wrote this morning, you still have more questions or want to discuss this fascinating issue further, contact me directly. I will be more than happy to answer them the best I can, and spare the others from reading my long and boring messages. - ---------- > Well isn't the "investor" saying the same thing about his > picks: "I believe there will be more buyers than sellers in this > stock in the next X amount of time"? It is the amount of buyers vs. > sellers that ultimately define the price of the stock -- not the > levels of the earnings or the glamour of the company. > Both 'traders' and 'investors', the way you defined them, > count on an increased ratio of buyers vs sellers to push the > price up. Yep. Investors, day traders, night traders, mid-day traders; They all want the ratio to be in favor of the buyers in the market. If the company has good earnings, and glamour, then odds are in favor of increased buyer ratio. > So you are basicaly saying that the further the phenomenon into > the future the better prediction of its behavior can you make. Who said that? Select a Canslim, or any fundamentally sound stock. Over time, the market (supply and demand rule) will take care of short term price hops. As an example, look at the 50-day moving average of a stock. Compare it to the daily prices. Most of the peaks and valleys are absent from the MA. Time element is at work here!! So if you look at trades, tick by tick, and get IN or OUT because of a large block of share traded on an uptick or downtick, you ARE a trader not an investor. You have mentioned this reaction to block trades when you were getting Out of HDCO and again on Friday while talking about IOM. Of course INVESTOR does not mean someone who wants to lose money and is relaxed about a stock which is sliding to hell. On the contrary, he/she will place stops at logical and reasonable areas to protect himself from getting burned. At the same time he/she does not let these little blips in price prevent him from potential price appreciation. > The way I see investing (i.e. both > 'trading' and 'investing' in your case) it is all a matter > of maximizing the predictability of the price moves so that > you can distribute your assets along the "TIME" and the > "STOCKS" axes accordingly as to maximize your profits. And how do you propose to maximize the predictability of the prices? By jumping in and out of a stock? Did you know there are hundreds of traders at the floor of each exchange who follow and trade only one or two stocks all day long, and DO NOT pay any commissions? How can you compete with them? The large block of stock that you just saw on your screen is OLD news to them. You must treat their action as a blip (while above your stops), and do not run to exits. > The modern mantra preached to the "individual > investor" is 1) go for the long haul and 2) diversify, and > if you disregard it than you are either too stupid not to > listen what the "wise men" are telling you or you are too > greedy and agressive and will pay for those sinns eventualy. > To me that's all a bunch of crap. I'm glad you are open minded. > If what really worked on the market was the same thing that was accepted by the > masses then everybody would win on the market, and we all know that that's impossible. No we do not. You are absolutely wrong. Look. According to a recent study by Money magazine, even if you are the world's most unlucky investor (not trader), and you put $5000 into the market at the October 1987 peak just before the crash, and then added equal sums the very day the market hit a high ever since then ( most unlucky individual ). Today you have a nice ~10.5% annual return. > Btw, you avoided the answer to my question. Seems that the > time-length is the only parameter that distinguishes a > trader from an investor. Not exactly. In my opinion the name of the game is discipline and time. Do your research, choose your entry point logically, set stops where they make sense, and let the games begin!! Oh...and remember, do not change your rules at the middle of the game. > > Traders job is just about the most difficult way to make a buck! > > Speaking from experience, or is this some common market wisdom > that I have yet to comprehend? Both. Fred ------------------------------ From: "tom worley" Date: Tue, 17 Dec 1996 06:41:52 -0500 Subject: Re: [CANSLIM] Introduction I did very well in 1995 buying calls on the more expensive stocks, and would have done well in same way this year had I had the funds to use (on paper I got filthy rich). On the other hand, when I play options, it's anything but leisurely, mostly it's white knuckle cuz I'm betting on short term where time is my enemy.\ tom w - ---------- > From: OWENTIME@delphi.com > To: canslim@xmission.com > Subject: Re: [CANSLIM] Introduction > Date: Monday, December 16, 1996 11:08 PM > > Re: discussions of traders vs. investors. > > I'm curious how many CANSLIMMERS out there prefer put/call options > for leisurely strikes into their breakout stocks. ------------------------------ From: "tom worley" Date: Tue, 17 Dec 1996 06:57:01 -0500 Subject: Re: [CANSLIM] Re: Investing ( Was:Introduction) I'm still waiting for the day I am bored by either a short or long posting in this group. Every one has contributed something, if not knowledge and experience, then at least a fresh perspective or humor. And the latter, frankly, has been sorely lacking in this market. tom w - ---------- > From: fjsabour > To: canslim@xmission.com > Subject: [CANSLIM] Re: Investing ( Was:Introduction) > Date: Tuesday, December 17, 1996 12:56 AM > > My apologies to list members. This is a long and BORING > message!! ------------------------------ From: "tom worley" Date: Tue, 17 Dec 1996 07:26:02 -0500 Subject: [CANSLIM] COMS If anybody can find the time, how about reviewing Three Com by CANSLIM standards and advising the group. I will try to do my homework, but without an assistant it's hard to find the time during the day, and I got to go to a co party tonight. thanks tom w ------------------------------ From: Craig Griffin Date: Tue, 17 Dec 1996 21:07:51 GMT Subject: [CANSLIM] Market Comment from DBC See following URL for today's market comment: http://www.dbc.com/cgi-bin/htx.exe/newsroom/newsroom.html?source=core/dbc Regards, Craig ------------------------------ From: Craig Griffin Date: Tue, 17 Dec 1996 22:51:08 GMT Subject: Re: [CANSLIM] Market Comment from DBC Ooops, sorry, I read my own post and it sounded like spam. Meant to say, that the market comment section at this URL for today sounds bearish and verify the signs of distribution I was seeing. It also mentions head and shoulder patterns on some stocks. At 09:07 PM 12/17/96 GMT, you wrote: >See following URL for today's market comment: > >http://www.dbc.com/cgi-bin/htx.exe/newsroom/newsroom.html?source=core/dbc > >Regards, >Craig > > ------------------------------ From: Zoran Mitrovski Date: Tue, 17 Dec 1996 20:46:46 -0500 (EST) Subject: Re: [CANSLIM] Re: Investing Fred wrote: > Zoran, > I will try to answer your questions and be brief at the same > time. You know, I much rather be analyzing stocks :-) You're right Fred. It seems that we both knew what the other one was trying to say. Cheers, Zoran ------------------------------ From: Haw-Jye Shyu Date: Wed, 18 Dec 1996 10:00:50 -0500 (EST) Subject: Re: [CANSLIM] Re: Trailing PE Here is my thought on Three Com (COMS). They may not consist with CANSLIM: 1. Currently at $ 72 3/8, 52 week high is $ 81 3/8. From the peak, COMS got a 11% correction. (data from DBC) 2. Trailing P/E ratio is 60.31. (from DBC) Based on this number, the stock owner is expecting an earning growth rate of 60% a year. (I got this idea from an article in WORTH, how to evaluate a growth stock). 3. The annual earing at 5/31/96 is $1.01. (from Barron ON-line) Therefore, based on the P/E ratio, the earning should at least be $1.62 (=1.01 * 1.6). 4. Quartely, the earing per share is $0.52 at 8/30/96. Based on the P/E ratio, the expected earing for this quarter should be at least $0.60 (i.e. 0.52 * 1.15 = 0.60). 5. the Pre-tax margin is 20.4 at 8/30/96. If this profit margin shrinked and combined with a disappointing earning. I doubt it is a good time to buy this share. After all, no company can maintain that kind of growth rate for 5 years and beyond. On the other hand, I am an amature and have lost money in thestock. Don't take my word too seriousely. HJS ------------------------------ From: Haw-Jye Shyu Date: Wed, 18 Dec 1996 10:51:10 -0500 (EST) Subject: Re: [CANSLIM] Re: Trailing PE Oh, Yes! I forgot the sell figure. Their sell growth rate is 1) 80% from 95 to 96 2) 57% from 94 to 95 3) 34% from 93 to 94 4) 51% from 92 to 93 If COMS can maintain the sell growth rat, better yet can improve it, the shrinking profit margin may not cause too much of trouble. HJS - ----- Begin Included Message ----- From owner-canslim@xmission.com Wed Dec 18 10:42 EST 1996 From: Haw-Jye Shyu Date: Wed, 18 Dec 1996 10:00:50 -0500 (EST) To: canslim@xmission.com Subject: Re: [CANSLIM] Re: Trailing PE Here is my thought on Three Com (COMS). They may not consist with CANSLIM: 1. Currently at $ 72 3/8, 52 week high is $ 81 3/8. From the peak, COMS got a 11% correction. (data from DBC) 2. Trailing P/E ratio is 60.31. (from DBC) Based on this number, the stock owner is expecting an earning growth rate of 60% a year. (I got this idea from an article in WORTH, how to evaluate a growth stock). 3. The annual earing at 5/31/96 is $1.01. (from Barron ON-line) Therefore, based on the P/E ratio, the earning should at least be $1.62 (=1.01 * 1.6). 4. Quartely, the earing per share is $0.52 at 8/30/96. Based on the P/E ratio, the expected earing for this quarter should be at least $0.60 (i.e. 0.52 * 1.15 = 0.60). 5. the Pre-tax margin is 20.4 at 8/30/96. If this profit margin shrinked and combined with a disappointing earning. I doubt it is a good time to buy this share. After all, no company can maintain that kind of growth rate for 5 years and beyond. On the other hand, I am an amature and have lost money in thestock. Don't take my word too seriousely. HJS - ----- End Included Message ----- ------------------------------ From: patrick.wahl@unpcbbs.cts.com (Patrick Wahl) Date: Wed, 18 Dec 1996 02:58:00 GMT Subject: [CANSLIM] COMS ST>From: "tom worley" ST>Date: Tue, 17 Dec 1996 07:26:02 -0500 ST>Subject: [CANSLIM] COMS ST>If anybody can find the time, how about reviewing Three Com by CANSLIM ST>standards and advising the group. I will try to do my homework, but without Here are a few thoughts, at least - The stock has risen from a low of 34 in July to a high of 80, and a current price of around 76, obviously a gain of over 100 percent in a space of 5 months. It probably needs to take a rest here, form another base before it can be bought. It did bounce off of its 50 day moving average. I have heard that institutional investors will buy a stock when it touches its 50 day ma, but I don't know if that is an accurate statement. Anyway, COMS did seem to find some buying support down there, around 72 or so. From what I know of the fundamentals, COMS is in good shape. They have a wide product line and are able to offer products in a number of different areas. Earnings have been strong lately. I think the recent 10 point drop marks the end, temporarily, of this recent upmove. I think the stock needs to consolidate here, probably bounce around in the 70's for a while if it is eventually going to go higher. Watch for another base to form. ------------------------------ End of canslim Digest V1 #25 **************************** To subscribe to canslim Digest, send the command: subscribe canslim-digest in the body of a message to "majordomo@xmission.com". 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