From: canslim-owner@xmission.com (canslim Digest) To: canslim-digest@xmission.com Subject: canslim Digest V1 #272 Reply-To: canslim@xmission.com Sender: canslim-owner@xmission.com Errors-To: canslim-owner@xmission.com Precedence: canslim Digest Saturday, August 23 1997 Volume 01 : Number 272 In this issue: [CANSLIM] SMOD alert Re: [CANSLIM] Datek Re: [CANSLIM] Protection from stop losses in down turns-some thoughts [CANSLIM] volatility Re: [CANSLIM] Datek [CANSLIM] Negotiate commissions. [CANSLIM] jpeg mkt study Re: [CANSLIM] SMOD alert [CANSLIM] Beta and Questions to Ask Re: [CANSLIM] Protection from stop losses in down turns-some thoughts Re: [CANSLIM] Datek Re: [CANSLIM] jpeg mkt study Re: [CANSLIM] SMOD alert Re: [CANSLIM] Protection from stop losses in down turns-somethoughts Re: [CANSLIM] Negotiate commissions. re: [CANSLIM] Negotiate commissions. Re: [CANSLIM] Beta and Questions to Ask Re: [CANSLIM] Protection from stop losses in down turns-som re: [CANSLIM] Negotiate commissions. Re: [CANSLIM] SMOD alert 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. ---------------------------------------------------------------------- Date: Fri, 22 Aug 1997 08:44:34 -0400 From: "Tom Worley" Subject: [CANSLIM] SMOD alert Most likely, Smart Modular (SMOD) will gap up at the open since it had great earnings after the close yesterday 57 cents, est was for 46 and year ago was 31). However, past two days jumped from a short base at 46 to 51, so possible it will "sell off on news". If you can pick it up in the area of the base (46 or so) looks like a good play for buy and hold as this gives it 1.42 thru 9 months and year est is for 1.80 (up 50%). Looks like a good candidate for an earnings upgrade. Any statements or opinions are strictly my own and not that of my employer. My comments should not be intrepreted as a recommendation of any kind. I am a licensed (inactive) broker and an active investor. All investors should do their own research prior to any investment, especially one learned about on the Internet. Hopefully my comments will better inform and educate all investors. tom w ------------------------------ Date: Fri, 22 Aug 97 15:00:37 +0200 From: dirk schelfhout Subject: Re: [CANSLIM] Datek >I was thinking about getting account with Lombard. Is there anything of >which I should be aware before I make such a move. You won't get a margin account the first 6 months. After 6 months you can apply for one. Dirk, ------------------------------ Date: Fri, 22 Aug 1997 07:10:04 -0700 From: Tim Fisher Subject: Re: [CANSLIM] Protection from stop losses in down turns-some thoughts At 06:35 AM 8/22/97 -0400, you wrote: >We have enough group members using deep discount firms, and we >certainly have had enough high volume days in the past year. How >about some comments from members reporting on their experiences >both with "in place" stop losses as well as order entry under such >high volume conditions. Name your firm and tell us how they did. > Two of mine executed on the button on Friday. One actually looks to have ticked down to the stop for a few minutes on the 5-minute chart. Wasn't that about the second worst day since Oct 87? Tim Fisher, 1995 President, Pacific Fishery Biologists Ore-ROCK-On Rockhounding Web Site PFB Information tfish@spiritone.com WWW http://www.spiritone.com/~tfish -- See naked fish and rocks! ------------------------------ Date: 22 Aug 1997 12:27 EDT From: "Christopher Reid" Subject: [CANSLIM] volatility how important is statistical volatility, it seems that when ever the 4 day = volatility hits rock bottom (well below the 90 day volatility) and then beg= ins to climb steeply to overtake the 90 day volatility the stock almost al= ways rises up (only so in a bull market???). Is this an indicator of when = to buy? (eg when the 4 day volatility is climbing sharply to overtake the 9= 0 day volatility). When this trend (sharp increasing slope) occurs it seem= s to happen a couple days before the volume spikes, which all seem to happe= n before price increases. When the 4 day volatility is bouncing around belo= w the 90 day it this seems to indicate a basing period??? = Just some ideas, please comment Regards, Christopher I'd put one of those disclaimers here but I don't think anyone would take m= y advice right now, but I certainly welcome yours, again, great group = ------------------------------ Date: Fri, 22 Aug 1997 11:47:29 -0500 (CDT) From: Anthony Ku Subject: Re: [CANSLIM] Datek Nope. For Datek, any ROUNDLOTS are REFLECTED AUTOMATICALLY if it is between bid/ask because of the new ECN rule for ISLAND ONLY... NASD has ruled that Island is the first one to have representation on ALL the stocks trading on the nasdaq market. Datek uses ISLAND automatically. Heck, if all nasdaq stocks have a spread of 1/8 or 1/16, no one would use limit order other than a marketable limit order. But that's not the case. usually u'll see 1/2 or 3/4 spread. Anthony Ku On Fri, 22 Aug 1997, Tom Worley wrote: > True meaning of price improvement, to the best of my knowledge and > experience, is that a limit order must be filled at a better price > if that's where the mkt is. Good example, a GTC (good till > cancelled) order is entered to sell at 25 when stock is trading at > 20. Several days later, they release good news before the open and > the stock opens at 26 bid, that is where the order must be > executed, not the limit of 25. > > As to the issue of your "right" to get orders executed in between > the bid and ask just because it's trading there, you're kidding > yourself. Many orders are executed totally internally within the > same firm. They must be printed so you see the trade, but the stock > simply changed hands within the firm. Example: a BD that is a mkt > maker takes in stock on the bid, they can offer it to their own > brokers first, who could then mark it up for part, but not all, of > the spread. Trades don't have firm or client names attached, all > you would see is a trade between the bid and ask. Another example: > your order is at Datek, and the trader at Merrill has stock > available he is willing to sell a qtr pt over the bid. He gets a > call from Datek at the same time he gets a call from Paine Webber. > He does a lot of business with Paine Webber and very little with > Datek. Who do you think he gives the stock to? > > As to a limit order being better represented (shown) by Datek and > not by other firms, you are, I believe, incorrect. It has nothing > to do with Datek. If the stock is one of the over 1000 NASDAQ > stocks that now fall under the new rules, a limit better than the > existing market must either be immediately executed (or at least > guaranteed) by the firm holding the order or else it must be shown > to the marketplace. I am not familiar with island, but do know this > does include orders shown on Instinet and Selectnet. If the stock > does not fall yet under the new rules (and it will take over a year > for all to be covered), then your order may or may not be > represented (shown) depending on whether it is put at a market > maker in that stock. I have no knowledge of whether or how many > NASDAQ stocks Datek may make a mkt in. If the firm holding the > order is a mkt maker, and does not have inventory they wish to sell > at your limit, or to buy at your limit, then what you might see is > this: stock is 21 bid, 22 offered (obviously thinly traded with > such a large spread), you enter an order to buy at 21.25. A mkt > maker might then go high bid at 21 1/8 or 21 3/16 trying to get > stock they then sell you at 21.25. This way they make the $9.99 > commission (which is a loss leader, doesn't cover costs of the > transaction) plus a fraction per share, plus the soft dollars they > receive if they give the order to some other dealer for execution. > > BTW, running Operations including all order entry/execution has > given me far more insight and understanding of what it takes than > my years as an investor and a broker ever gave me. The system > works, sometimes amazingly well, but there is no free lunch. Every > firm is out to make a profit, none are there to provide free > service. And it is a competitive mkt. With the recent authorization > by NYSE for stocks to trade in 1/16th, the spread there has > tightened to the point that a limit order is almost silly. > Eventually that will be the case on NASDAQ as well, and the days of > soft dollars will be history. Already, on the most liquid stocks > like INTC and MSFT it is the case unless you are buying 10,000 or > so shares at a time, in which case you are probably not in this > group. > > Something every investor should understand, when you enter a limit > order, the firm with the order is under no obligation to execute > that order unless the limit matches the market. > > Any statements or opinions are strictly my own and not that of my > employer. My comments should not be intrepreted as a recommendation > of any kind. I am a licensed (inactive) broker and an active > investor. All investors should do their own research prior to any > investment, especially one learned about on the Internet. Hopefully > my comments will better inform and educate all investors. > > tom w > > ---------- > > From: Anthony Ku > > To: canslim@mail.xmission.com > > Subject: Re: [CANSLIM] Datek > > Date: Thursday, August 21, 1997 6:25 PM > > > > Thta's what i just said. Price improvement being that you should > be able > > to trade between bid/ask if there is another buyser/seller at the > same > > price. You can't do that with NASD for most of the time. NASD > though are > > now allowing island and instinet quotes to be reflected and so > you can > > take advatange of it. > > > > For example, if the bid/ask is at 21 and 22, and i set an order > to buy at > > 21 1/4, it won't usually reflected. That is, the bid price will > not move > > to 21 1/4. However, if you have DATEK, it will since NASD is > allowing > > ISLAND orders to be automatically reflected in the bid/ask > prices. Thus, > > ------------------------------ Date: Fri, 22 Aug 1997 13:19:27 -0400 From: Connie Mack Rea Subject: [CANSLIM] Negotiate commissions. - --------------B3903BB28236D1CF9E804B95 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Members-- I do not know how many members you have, but I infer there are enough by far to negotiate a discount on your trades. You will have to, among yourselves, agree to act in concert; i.e., you cannot buy|sell individually. The group must agree on a spokesman who will enter all orders. I sense that a number of the members posting, and the friendly lurkers, are learning the system. One could learn the system and at the same time see the system at work while making only a nominal investment. You could agree to put in, say, $2000 cash. This figure ought not be onerous. Even five members would be a workable start. And if the group agreed to a margin account, that would offer considerable buy power (and be a bit more enticing to the brokerage). I would suggest a margin account. A two thousand dollar margin investment ought not cause sleepless nights. Because the group would have a remote spread, whoever chose to start the group might want to invite some chat just to be sure how compatible are the investing principles of each member. Also, you'll need to have a simple charter of principles and rules. For an investment of $2000, you ought not have a charter that details every conceivable eventuality. The simpler, the better. One member of the group ought to be knowledgeable and trusted; his voice should be persuasive, but not overwhelming. As the group becomes more experienced, individual voices should have more influence and decisions become less tardy and ambiguous. Timing is important for investors as well as traders. You would need to do these things: [1] Agree upon a single brokerage to trade with. You would need not do any of your personal trading with this house. [2] I estimate that the group ought to agree to trade between 5-10 times per month. In fact, I would start negotiating for 5 trades per month. A group no larger than five could negotiate for a discount. Do not set the active date of your agreement until you have chosen what stocks to buy. I would buy 5 stocks so that I would assure the discount immediately (assuming that 5 was the agreed upon figure with the house). [3] What discount to ask for? A 30-50% discount would not be unreachable. The number of trades you agree to would be corollary to the discount asked for. [4] You might want to agree among yourselves how much each member should contribute to the account. Keep additional contributions in increments of $500 or a $1000 so that investor equity is simple to calculate. The house might ask the group to trade the agreed to number of times before it received its discount; it would then credit the account. Too, if the group traded more times than agreed to, the house might not allow any carryover to the next period. Ask for a carryover practice. There may need to be a written agreement between a designated spokesman such that that person may buy|sell for the account; a second person should have the same power in case of emergency.. Someone in the group ought to get to know the officer well enough to call him when there is any misunderstanding. Remember that this is a business agreement; and remember whose money it is. A civil hint that if you don't get what you want, you may go elsewhere. I had a small group of investors made up of faculty members eight years ago; I negotiated a discount for them through my own broker even though I didn't trade for my own account through the group. I was the sole buyer|seller and made all decisions. I had my own separate agreement for my own account. Be sure you are agreed on the details before approaching a house. Do not be put off if you don't find an early agreement; most houses that do offer discounts beyond their public ads have a few agreements with single individuals. Small houses are more amenable to negotiation than the larger. To start, each member of the group ought to approach his own brokerage. See what it has to say. As important as the investing decisions will be, the goodwill and friendliness among the members will be even more important. Respectfully, Day Trader - --------------B3903BB28236D1CF9E804B95 Content-Type: text/html; charset=us-ascii Content-Transfer-Encoding: 7bit Members--

I do not know how many members you have, but I infer there are enough by far to negotiate a discount on your trades.

You will have to, among yourselves, agree to act in concert; i.e., you cannot buy|sell individually.  The group must agree on a spokesman who will enter all orders.

I sense that a number of the members posting, and the friendly lurkers, are learning the system.  One could learn the system and at the same time see the system at work while making only a nominal investment.

You could agree to put in, say, $2000 cash.   This figure ought not be onerous.  Even five members would be a workable start.  And if the group agreed to a margin account, that would offer considerable buy power (and be a bit more enticing to the brokerage).  I would suggest a margin account.  A two thousand dollar margin investment ought not cause sleepless nights.

Because the group would have a remote spread, whoever chose to start the group might want to invite some chat just to be sure how compatible are the investing principles of each member.

Also, you'll need to have a simple charter of principles and rules.  For an investment of $2000, you ought not have a charter that details every conceivable eventuality.  The simpler, the better.  One member of the group ought to be knowledgeable and trusted; his voice should be persuasive, but not overwhelming.  As the group becomes more experienced, individual voices should have more influence and decisions become less tardy and ambiguous.  Timing is important for investors as well as traders.

You would need to do these things:

    [1] Agree upon a single brokerage to trade with.  You would need not do any of your personal trading with this house.

    [2] I estimate that  the group ought to agree to trade between 5-10 times per month.  In fact, I would start negotiating for 5 trades per month.  A group no larger than five could negotiate for a discount.  Do not set the active date of your agreement until you have chosen what stocks to buy.  I would buy 5 stocks so that I would assure the discount immediately (assuming that 5 was the agreed upon figure with the house).

    [3] What discount to ask for?  A 30-50% discount would not be unreachable.  The number of trades you agree to would be corollary to the discount asked for.

    [4] You might want to agree among yourselves how much each member should contribute to the account.  Keep additional contributions in increments of $500 or a $1000 so that investor equity is simple to calculate.

The house might ask the group to trade the agreed to number of times before it received its discount; it would then credit the account.

Too, if the group traded more times than agreed to, the house might not allow any carryover to the next period.  Ask for a carryover practice.

There may need to be a written agreement between a designated spokesman  such that that person may buy|sell for the account; a second person should have the same power in case of emergency..   Someone in the group ought to get to know the officer well enough to call him when there is any misunderstanding.  Remember that this is a business agreement; and remember whose money it is.  A civil hint that if you don't get what you want, you may go elsewhere.

I had a small group of investors made up of faculty members eight years ago;  I negotiated a discount for them through my own broker even though I didn't trade for my own account through the group. I was the sole buyer|seller and made all decisions. I had my own separate agreement for my own account.

Be sure you are agreed on the details before approaching a house.  Do not be put off if you don't find an early agreement;  most houses that do offer discounts beyond their public ads have a few agreements with single individuals.

Small houses are more amenable to negotiation than the larger.

To start, each member of the group ought to approach his own brokerage.  See what it has to say.

As important as the investing decisions will be, the goodwill and  friendliness among the members will be even more important.

Respectfully,

Day Trader - --------------B3903BB28236D1CF9E804B95-- ------------------------------ Date: Fri, 22 Aug 1997 13:00:28 -0700 From: Harlan Subject: [CANSLIM] jpeg mkt study look at the mkt. study on the 4th and 5th sell signal that takes place around 1175 and then around 1199 ish. do you notice that you get a reversal of downtrend then up for 2 days only to reverse again then you get the reversal day followed by another down day then a reversal again for a total of 3 days only to reverse again (1199.99) then its bombs away from there on out. Well take a look at the S&P 500 over the last week. Last FRIDAY was a down day with a reversal day on Monday, Tuesday up (day 1 ) wednesday up (day 2) and Thursday ANOTHER REVERSAL DAY TO THE DOWNSIDE!!!! Sure enough today were down big. Pretty similiar pictures hey!!!!! Couple of points: 1 S&P 500 is currently breaking its 50day moving ave. (interday) If it CLOSES the day down below the 50day, do you realize that thats the 1st time its done so since this overperformance mode started in May of 1997???? WHats that say about the state of things hey!!!! 2. A close below 900 today or monday COULD be construed as a picture perfect textbook example of a Head and Shoulders Top with a completed neckline at 900ish. Can you see it?????? The Question is A. will we come down and stop B. will we bust through and keep falling? At this point all I can say is that there are some seriour similiarities dont you think? Am I making sense? Harlan Any thoughts? ------------------------------ Date: Fri, 22 Aug 1997 17:50:56 -0400 From: Douglas Rhodes Subject: Re: [CANSLIM] SMOD alert I bought SMOD 2-3weeks ago at 40 7/8 and its been up ever since. I saw pleasantly surprised today when it was up over 9 points! I felt it was a great canslim candidate then and now I'm a canslim believer. - --Doug >Most likely, Smart Modular (SMOD) will gap up at the open since it >had great earnings after the close yesterday 57 cents, est was for >46 and year ago was 31). However, past two days jumped from a short >base at 46 to 51, so possible it will "sell off on news". If you >can pick it up in the area of the base (46 or so) looks like a good >play for buy and hold as this gives it 1.42 thru 9 months and year >est is for 1.80 (up 50%). Looks like a good candidate for an >earnings upgrade. > >Any statements or opinions are strictly my own and not that of my >employer. My comments should not be intrepreted as a recommendation >of any kind. I am a licensed (inactive) broker and an active >investor. All investors should do their own research prior to any >investment, especially one learned about on the Internet. Hopefully >my comments will better inform and educate all investors. > >tom w ------------------------------ Date: Fri, 22 Aug 1997 20:12:29 -0400 (EDT) From: JANSI1AUG1@aol.com Subject: [CANSLIM] Beta and Questions to Ask IBD (and, I believe, WON by implication) recently had an article regarding Beta's. It said that if you believe the general market is going to rise, the greater the beta of your stock, the better (beta is an indication of the stocks volatility compared to the market. For instance a beta of 2 would mean your stock would rise (or fall if the market does) twice as much as the market.) Does anyone know of an address where stocks are ranked according to their betas? Also, I believe it was Chune Lee from San Francisco, who asked what questions to ask of WOM at his seminar. Chune would you ask him what stocks he recently has purchased, at what price, why at that price, when does he plan to sell them, at what price, and why? Thanks to Tom W for the info of how to correspond with this group. Cordially, jans ------------------------------ Date: Fri, 22 Aug 1997 20:16:50 -0400 (EDT) From: Ppn3725@aol.com Subject: Re: [CANSLIM] Protection from stop losses in down turns-some thoughts In a message dated 97-08-22 05:00:03 EDT, you write: << -sit quiet and do nothing hoping the stop losses will keep you safe; Ben Graham in his security analysis clearly mentions that the intelligent investors in the 1929-33 debacle should have been/were out of the market when the evaluation went very high somewhere in the crest (although missed on part of the gains) -make an attempt to predict situtation where such a drop could occur using technical analysis of index charts that uses a methodology similar to what O'Neill preaches (sell signals based on price-volume behavior of the index), or use a fundamental evaluation technique as per graham and stay out when the valuations look absurd. >> Stops don't help much when they gap down you can always put a limit price like IBM stop 100 limit 95 so that if there is a diasaster you can hold it. This isn't 1929 or 1987, they didn't have computers back then to due an analysis like this easily and relied the media. You could buy stocks like commidities and in 1929 the Fed killed the economy. In 1987 prices were much higher along with interest rates etc. Also, in 1929 the smart money figured out that when the banks started to run to short the market. And it took months to develop due to slow news flow. Peter Newell ------------------------------ Date: Fri, 22 Aug 1997 20:09:02 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] Datek Well, glad I at least admitted I knew nothing of "island" (other than one in the Bahamas!). Interesting, will have to learn more about it. Any statements or opinions are strictly my own and not that of my employer. My comments should not be intrepreted as a recommendation of any kind. I am a licensed (inactive) broker and an active investor. All investors should do their own research prior to any investment, especially one learned about on the Internet. Hopefully my comments will better inform and educate all investors. tom w - ---------- > From: Anthony Ku > To: canslim@mail.xmission.com > Subject: Re: [CANSLIM] Datek > Date: Friday, August 22, 1997 12:47 PM > > > Nope. For Datek, any ROUNDLOTS are REFLECTED AUTOMATICALLY if it is > between bid/ask because of the new ECN rule for ISLAND ONLY... NASD has > ruled that Island is the first one to have representation on ALL the > stocks trading on the nasdaq market. Datek uses ISLAND automatically. > ------------------------------ Date: Fri, 22 Aug 1997 20:19:40 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] jpeg mkt study You're making sense, but the S&P wasn't listening. Same pattern I've been seeing, lots of cash on the sidelines and buying on every serious pullback, shopping for value. S&P500 finished the day at 923.54, down 1.51; Dow 30 finished the day at 7887.91, down 6.03 after having been down over 177 pts. Just in the final 15 minutes right before a weekend, the Dow 30 gained over 100 pts on volume. Worth noting that volume remained light once again thru the decline, and only began to build when the mkt attempted to rally. And, at the close, there were surprisingly no big winners or losers among the Dow 30. Breadth was sloppy, with adv/decline worse than a 1:2 ratio, but up/down vol was closer to a 5:6 ratio. On NASDAQ, both ratios were about a 2:3 ratio. Overall volume was about average by the end of the day for NYSE for this time of year, while a little heavy on NASDAQ. I am expecting this volatility to become normal until everyone is back from vacation and overall sentiment has found a consistent trend. Until then, this will remain a fear driven mkt. Any statements or opinions are strictly my own and not that of my employer. My comments should not be intrepreted as a recommendation of any kind. I am a licensed (inactive) broker and an active investor. All investors should do their own research prior to any investment, especially one learned about on the Internet. Hopefully my comments will better inform and educate all investors. tom w - ---------- > From: Harlan > To: canslim@mail.xmission.com > Subject: [CANSLIM] jpeg mkt study > Date: Friday, August 22, 1997 4:00 PM > > look at the mkt. study on the 4th and 5th sell signal that takes place > around 1175 and then around 1199 ish. do you notice that you get a > reversal of downtrend then up for 2 days only to reverse again then you a total of 3 days only to reverse again (1199.99) then its bombs > away> get the reversal day followed by another down day then a reversal again > for from there on out. Well take a look at the S&P 500 over the last > week. Last FRIDAY was a down day with a reversal day on Monday, Tuesday > up (day 1 ) wednesday up (day 2) and Thursday ANOTHER REVERSAL DAY TO > THE DOWNSIDE!!!! Sure enough today were down big. Pretty similiar > pictures hey ------------------------------ Date: Fri, 22 Aug 1997 20:36:32 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] SMOD alert I'm frustrated, when it didn't gap down on an already down day after a nice move yesterday, I did nothing. Had I thrown a mkt order in on top of the four pt gap, I still could have made 10% in a day! Go figure. Any statements or opinions are strictly my own and not that of my employer. My comments should not be intrepreted as a recommendation of any kind. I am a licensed (inactive) broker and an active investor. All investors should do their own research prior to any investment, especially one learned about on the Internet. Hopefully my comments will better inform and educate all investors. tom w - ---------- > From: Douglas Rhodes > To: canslim@mail.xmission.com > Subject: Re: [CANSLIM] SMOD alert > Date: Friday, August 22, 1997 5:50 PM > > I bought SMOD 2-3weeks ago at 40 7/8 and its been up ever since. > I saw pleasantly surprised today when it was up over 9 points! > I felt it was a great canslim candidate then and now I'm a > canslim believer. > > --Doug > ------------------------------ Date: Fri, 22 Aug 1997 20:34:22 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] Protection from stop losses in down turns-somethoughts So, Tim, what was the firm that did so well? Any statements or opinions are strictly my own and not that of my employer. My comments should not be intrepreted as a recommendation of any kind. I am a licensed (inactive) broker and an active investor. All investors should do their own research prior to any investment, especially one learned about on the Internet. Hopefully my comments will better inform and educate all investors. tom w - ---------- > From: Tim Fisher > To: canslim@mail.xmission.com > Subject: Re: [CANSLIM] Protection from stop losses in down turns-somethoughts > Date: Friday, August 22, 1997 10:10 AM > > At 06:35 AM 8/22/97 -0400, you wrote: > > >high volume conditions. Name your firm and tell us how they did. > > > Two of mine executed on the button on Friday. One actually looks to have > ticked down to the stop for a few minutes on the 5-minute chart. Wasn't that > about the second worst day since Oct 87? > ------------------------------ Date: Fri, 22 Aug 1997 20:31:47 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] Negotiate commissions. Connie, not sure how you are sending your email, but it is a "ghost" (blank page) to me until I click on "Reply to Sender". In any case, what you are proposing is an Investment Club. Apparently you are responding to someone else's post on negotiating commissions. If that is the purpose, setting up an investment club is a tremendous amount of work and responsibility just to get cheaper commissions. Far easier for each to open a personal acct at a deep discount firm and pay the freight. An active trader at my firm (and this could be only a couple trades a month) can arrange a 25% discount just with the broker, no management approval needed. A large trader trading blocks of 5000 or so at a time can get a commission rate of 8 cents a share. And the institutional traders of course can get even more of a discount. I suspect at a discount firm (and even more so at a deep discount one) you would have to be both a large and frequent trader to get much of a discount. Any statements or opinions are strictly my own and not that of my employer. My comments should not be intrepreted as a recommendation of any kind. I am a licensed (inactive) broker and an active investor. All investors should do their own research prior to any investment, especially one learned about on the Internet. Hopefully my comments will better inform and educate all investors. tom w - ---------- > From: Connie Mack Rea > To: canslim@mail.xmission.com > Subject: [CANSLIM] Negotiate commissions. > Date: Friday, August 22, 1997 1:19 PM > Members-- I do not know how many members you have, but I infer there are enough by far to negotiate a discount on your trades. You will have to, among yourselves, agree to act in concert; i.e., you cannot buy|sell individually. The group must agree on a spokesman who will enter all orders. [2] I estimate that the group ought to agree to trade between 5-10 times per month. In fact, I would start negotiating for 5 trades per month. A group no larger than five could negotiate for a discount. Do not set the active date of your agreement until you have chosen what stocks to buy. I would buy 5 stocks so that I would assure the discount immediately (assuming that 5 was the agreed upon figure with the house). [3] What discount to ask for? A 30-50% discount would not be unreachable. The number of trades you agree to would be corollary to the discount asked for. ------------------------------ Date: Fri, 22 Aug 1997 23:32:38 -0400 From: Michael A Langston Subject: re: [CANSLIM] Negotiate commissions. > trading blocks of 5000 or so at a time can get a commission > rate of 8 cents a share ouch tom, that's $400! > I suspect at a discount firm (and even more so at a deep > discount one) you would have to be both a large and frequent > trader to get much of a discount. i use brown -- any trade up to 5k shares is $19 -- for all practical purposes that's free (and executions are good) so i don't guess i completely see why anyone worries about discounts anymore of course spreads are another matter, and to my mind a much more important one -- alas, i've never really had much luck beating spreads anywhere (and when i do i tend to get those pesky partial fills, just another reason for market orders) mike ------------------------------ Date: Fri, 22 Aug 1997 19:26:57 -0700 From: Chune Lee Subject: Re: [CANSLIM] Beta and Questions to Ask Jans, I posted the article of asking WON at the next seminar what are his stock holding as he said to own 5 to 6 and upgrade them on a reular basis at the SF Money show. He said he was making more money in stocks than IBD. I suggested somebody ask this question at each of the meetings and post his answer here. It was advertised in the IBD that he will be lived from LA 9 to 10 AM Pacific time at the Omni LA hotel Centre at 930 Wilshire Blvd. Live satellite broadcast are to the Following Cities with questions and answers: Balitimore, Charlotte, Indianaoplis, Kansas City, Milwaukee, Pittsburg, Portland,St.Louis, Salt Lake City, and San Antonio. The number to call for reservation and date anytime 24 hours is: 1-800-797-9145 I thought I saw he was going to be live this or next week from Houston. Maybe somebody will ask this question and others submitted some of you. I think you should station yourself near a microphone and get in line right after his talk. He stayed and answer question for about 45 minutes in SF. Chune - --------------------------------------------------------------------------------------- JANSI1AUG1@aol.com wrote: > > IBD (and, I believe, WON by implication) recently had an article regarding > Beta's. It said that if you believe the general market is going to rise, the > greater the beta of your stock, the better (beta is an indication of the > stocks volatility compared to the market. For instance a beta of 2 would mean > your stock would rise (or fall if the market does) twice as much as the > market.) > > Does anyone know of an address where stocks are ranked according to their > betas? > Also, I believe it was Chune Lee from San Francisco, who asked what questions > to ask of WOM at his seminar. Chune would you ask him what stocks he > recently has purchased, at what price, why at that price, when does he plan > to sell them, at what price, and why? > > Thanks to Tom W for the info of how to correspond with this group. > > Cordially, > > jans ------------------------------ Date: Fri, 22 Aug 1997 23:14:07 -0800 From: pwahl@postoffice.worldnet.att.net Subject: Re: [CANSLIM] Protection from stop losses in down turns-som > To: canslim@mail.xmission.com > From: Tim Fisher > Two of mine executed on the button on Friday. One actually looks to have > ticked down to the stop for a few minutes on the 5-minute chart. Wasn't that > about the second worst day since Oct 87? As a percentage move, worst since Nov., 1991. ------------------------------ Date: Sat, 23 Aug 1997 00:07:49 -0800 From: pwahl@postoffice.worldnet.att.net Subject: re: [CANSLIM] Negotiate commissions. > i use brown -- any trade up to 5k shares is $19 -- for all > practical purposes that's free (and executions are good) If I trade online at PBS I get pretty much the same rate for commissions, negligible as you say. It certainly has encouraged me to trade more frequently, and I am more likely to take profits on part of a position rather than dump all my shares at once. > of course spreads are another matter, and to my mind a much > more important one -- alas, i've never really had much luck > beating spreads anywhere (and when i do i tend to get those > pesky partial fills, just another reason for market orders) You can use an all or none order to make sure your order isn't split. I've been meaning to mention that this year, since I have been trading online and have access to the internet all day, I have been using mostly limit orders and finding that I get filled almost always. I try to shave a 1/2 or 3/4 point off of the offer price and usually find myself being filled after 2 or 3 hours. Since I can easily log in several times each day, I can monitor the stock price and see if it is moving away from my price, or staying within range. If nothing happens by the last half hour of trading, I can then change to a market order, but as I said, usually I will be filled sometime during the day, even on stocks that are breaking out. May not sound like much, but saving 1/2 point on each trade of a few hundred shares, times say 10 trades, which isn't that many, and you have saved over $1,000. Patrick Wahl ------------------------------ Date: Sat, 23 Aug 1997 00:07:49 -0800 From: pwahl@postoffice.worldnet.att.net Subject: Re: [CANSLIM] SMOD alert > From: "Tom Worley" > I'm frustrated, when it didn't gap down on an already down day > after a nice move yesterday, I did nothing. Had I thrown a mkt > order in on top of the four pt gap, I still could have made 10% in > a day! Go figure. Strength in the face of overall market weakness is a very good sign. By the time I got around to checking on SMOD it was up 9 points, seemed a bit late to go chasing it by then. ------------------------------ End of canslim Digest V1 #272 ***************************** 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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