From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #1554 Reply-To: canslim Sender: owner-canslim-digest@lists.xmission.com Errors-To: owner-canslim-digest@lists.xmission.com Precedence: bulk Content-Transfer-Encoding: quoted-printable X-No-Archive: yes canslim-digest Sunday, July 8 2001 Volume 02 : Number 1554 In this issue: Re: [CANSLIM] IGT [CANSLIM] CANSLIM in Jerusalem Re: [CANSLIM] CANSLIM in Jerusalem Re: [CANSLIM] CANSLIM in Jerusalem Re: [CANSLIM] IGT ... Harrahs Re: [CANSLIM] Small cap, low trading volume Re: [CANSLIM] Small cap, low trading volume ---------------------------------------------------------------------- Date: Sun, 8 Jul 2001 09:27:43 EDT From: GOOWLS@aol.com Subject: Re: [CANSLIM] IGT In a message dated 7/8/2001 3:36:29 AM Central Daylight Time, dsap@shani.net writes: << Fell 6% on Friday on over 2X ADV. Couldn't find any news. Maybe just M. In the past, it usually bounces off the 50 DMA and on Friday, it pierced it. It has not hit my stop yet, but the high volume makes me nervous. I guess I could wait to see if it rebounds, but would like to hear your comments, thanks DSP >> DSP, I'll offer up my opinion and show you where my sell points would be based upon chart action. The important thing is for you to develop your own sell rules so that when you see certain things happen, you are gone without question or hesitation. I owned IGT and was taken out on 6/12 at 63.75 on a close sell stop following the formation of 2 "dojis" signaling that demand for the stock was falling. I had been trailing a sell stop below a trend line connecting the low in mid-May with the next low at the end of May. This would have caused an exit around 62 1/2 to 63. My next line in the sand would have been a trailing stop below a trend line drawn from the low in early April through the low in mid-May. This would have been an exit at about 61. My final line in the sand would have been a support line drawn horizontal connecting the last two lows at around 60 and the exit would have been Friday at about 59 to 59.50. Friday's chart action in IGT with a gap down and then a big volume sell off usually is bad news. It has been my experience from holding on and hoping that a stock comes back that you open yourself up to additional losses and much pain. Because I have been through that process a few times and decided that I didn't want to put myself through any more pain and anxiety from holding a falling stock, I developed my own sell rules to prevent that from happening (OK, I actually borrowed these rules from others, but now they are mine). My sell rules are geared toward the short term (Candlesticks) and to the intermediate term (trend lines and support). Another idea you might consider is using moving average crossovers such as a 5 day down through a 20 day as a final, final line in the sand for an exit. Pick something you are comfortable with and make it one of your sell rules. One more day to recover above the 50 dma could be a good sell rule also. I use hard sell stops for all of my positions and review the placement of the stops every night. Some people have the discipline to adhere to mental stops. I find that I do not so I always use hard stops. If my sell stop gets taken out and the price exceeds my exit point in the next few days, I may buy back my original position or a partial position. Mike Goode - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Sun, 8 Jul 2001 17:00:26 +0200 From: "dannygottlieb" Subject: [CANSLIM] CANSLIM in Jerusalem This is a multi-part message in MIME format. - ------=_NextPart_000_00F0_01C107CF.7C3D4760 Content-Type: text/plain; charset="windows-1255" Content-Transfer-Encoding: quoted-printable Are there any other CANSLIM people in Jerusalem? Danny =20 - ------=_NextPart_000_00F0_01C107CF.7C3D4760 Content-Type: text/html; charset="windows-1255" Content-Transfer-Encoding: quoted-printable
Are there any other CANSLIM people in=20 Jerusalem?
    Danny
    =
- ------=_NextPart_000_00F0_01C107CF.7C3D4760-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Sun, 8 Jul 2001 17:19:05 +0200 From: "david" Subject: Re: [CANSLIM] CANSLIM in Jerusalem This is a multi-part message in MIME format. - ------=_NextPart_000_00B9_01C107D2.173EC200 Content-Type: text/plain; charset="windows-1255" Content-Transfer-Encoding: quoted-printable Hi Danny, I work in the Ramat Gan area, near the Safari park, and live in the Bet = Shemesh Area. DSP ----- Original Message -----=20 From: dannygottlieb=20 To: CANSLIM=20 Sent: Sunday, July 08, 2001 5:00 PM Subject: [CANSLIM] CANSLIM in Jerusalem Are there any other CANSLIM people in Jerusalem? Danny =20 - ------=_NextPart_000_00B9_01C107D2.173EC200 Content-Type: text/html; charset="windows-1255" Content-Transfer-Encoding: quoted-printable
Hi Danny,
 
I work in the Ramat Gan area, near the = Safari park,=20 and live in the Bet Shemesh Area.
 
DSP
----- Original Message -----
From:=20 dannygottlieb
To: CANSLIM
Sent: Sunday, July 08, 2001 = 5:00 PM
Subject: [CANSLIM] CANSLIM in=20 Jerusalem

Are there any other CANSLIM people in = Jerusalem?
    Danny
   =20
- ------=_NextPart_000_00B9_01C107D2.173EC200-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Sun, 8 Jul 2001 17:35:13 +0200 From: "dannygottlieb" Subject: Re: [CANSLIM] CANSLIM in Jerusalem This is a multi-part message in MIME format. - ------=_NextPart_000_010A_01C107D4.58489EE0 Content-Type: text/plain; charset="windows-1255" Content-Transfer-Encoding: quoted-printable To David and any others responding to my search for CANSLIM people in = Jerusalem area, please respond to me directly at dannygott@bezeqint.net. = This way we won't burden the list with nonessential postings. My mistake = for not thinking of this in the first place.=20 Thanks, Danny ----- Original Message -----=20 From: david=20 To: canslim@lists.xmission.com=20 Sent: Sunday, July 08, 2001 5:19 PM Subject: Re: [CANSLIM] CANSLIM in Jerusalem Hi Danny, =20 I work in the Ramat Gan area, near the Safari park, and live in the = Bet Shemesh Area. =20 DSP ----- Original Message -----=20 From: dannygottlieb=20 To: CANSLIM=20 Sent: Sunday, July 08, 2001 5:00 PM Subject: [CANSLIM] CANSLIM in Jerusalem Are there any other CANSLIM people in Jerusalem? Danny =20 - ------=_NextPart_000_010A_01C107D4.58489EE0 Content-Type: text/html; charset="windows-1255" Content-Transfer-Encoding: quoted-printable
To David and any others responding to = my search for=20 CANSLIM people in Jerusalem area, please respond to me directly at dannygott@bezeqint.net. This = way we=20 won't burden the list with nonessential postings. My mistake for = not=20 thinking of this in the first place.
    Thanks, = Danny
----- Original Message -----
From:=20 david =
To: canslim@lists.xmission.com =
Sent: Sunday, July 08, 2001 = 5:19 PM
Subject: Re: [CANSLIM] CANSLIM = in=20 Jerusalem

Hi Danny,
 
I work in the Ramat Gan area, near = the Safari=20 park, and live in the Bet Shemesh Area.
 
DSP
----- Original Message -----
From:=20 dannygottlieb
To: CANSLIM=20
Sent: Sunday, July 08, 2001 = 5:00=20 PM
Subject: [CANSLIM] CANSLIM in = Jerusalem

Are there any other CANSLIM people = in=20 Jerusalem?
    = Danny
   =20
- ------=_NextPart_000_010A_01C107D4.58489EE0-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Sun, 8 Jul 2001 09:46:26 -0500 From: "Norman" Subject: Re: [CANSLIM] IGT ... Harrahs This is a multi-part message in MIME format. - ------=_NextPart_000_00E0_01C10792.DAFFC760 Content-Type: text/plain; charset="windows-1255" Content-Transfer-Encoding: quoted-printable David, Maybe this was a 'sympathetic' drop. Harrahs warned on Thursday=20 http://cbs.marketwatch.com/news/story.asp?guid=3D%7B7857F059%2D544D%2D476= C%2D8D1A%2D8D961A886B1D%7D&siteid=3Dmktw Norman - ----- Original Message -----=20 From: "david" To: "CANSLIM" Sent: Sunday, July 08, 2001 4:37 AM Subject: [CANSLIM] IGT > Fell 6% on Friday on over 2X ADV. >=20 > Couldn't find any news. Maybe just M. >=20 > In the past, it usually bounces off the 50 DMA and on Friday, it = pierced it. > It has not hit my stop yet, but the high volume makes me nervous. I = guess I > could wait to see if it rebounds, but would like to hear your = comments, > thanks >=20 > DSP >=20 >=20 > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. >=20 >=20 - ------=_NextPart_000_00E0_01C10792.DAFFC760 Content-Type: text/html; charset="windows-1255" Content-Transfer-Encoding: quoted-printable
David,
 
Maybe this was a 'sympathetic' = drop.  =20 Harrahs warned on Thursday
 
http://cbs.marketwa= tch.com/news/story.asp?guid=3D%7B7857F059%2D544D%2D476C%2D8D1A%2D8D961A88= 6B1D%7D&siteid=3Dmktw
 
Norman
 
----- Original Message -----
From: "david" <dsap@shani.net>
To: "CANSLIM" <canslim@xmission.com>
Sent: Sunday, July 08, 2001 4:37 = AM
Subject: [CANSLIM] = IGT

>=20 Fell 6% on Friday on over 2X ADV.
>
> Couldn't find any = news. Maybe=20 just M.
>
> In the past, it usually bounces off the 50 DMA = and on=20 Friday, it pierced it.
> It has not hit my stop yet, but the high = volume=20 makes me nervous. I guess I
> could wait to see if it rebounds, = but would=20 like to hear your comments,
> thanks
>
> DSP
> =
>=20
> -
> -To subscribe/unsubscribe, email "majordomo@xmission.com"
> -In the email body, write "subscribe = canslim"=20 or
> -"unsubscribe canslim".  Do not use quotes in your=20 email.
>
> - ------=_NextPart_000_00E0_01C10792.DAFFC760-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Sun, 8 Jul 2001 09:51:39 -0500 From: "Ron Brown" Subject: Re: [CANSLIM] Small cap, low trading volume This is a multi-part message in MIME format. - ------=_NextPart_000_0039_01C10793.958E4340 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Tom, I am not adhering to CANSLIM in the strictest definition of the word. =20 I am talking opportunity, and if you have been in this market, the = opportunities have been in the small caps. I believe I said consider = getting into small caps early if they have the right credentials. Since = I can't adhere strictly to the gospel, I will keep my opinions to myself = in the future. =20 Anyone out there holding large cap tech stocks can tell us where the = real risk has been in the market for the last 1 1/2 years. Liquidity is = a two-edged sword if you are on the wrong side of the elephants as they = head for the exits. With the advent of internet trading the game has changed, and you had = better be nimble with either small or large cap stocks, or you are dead. = In a market like this, the true risks are waiting to buy extended = breakouts, then getting your head handed to you. Inexperienced traders = who do not have the discipline to pull the trigger either getting in or = getting out had better be in cash. The ONLY way to play a market like = this is to be in strong stocks in strong group, and many of the winners = have been in small cap groups. =20 I'm sorry I invaded your territory. See you, Ron ----- Original Message -----=20 From: Tom Worley=20 To: canslim@lists.xmission.com=20 Sent: Sunday, July 08, 2001 8:14 AM Subject: Re: [CANSLIM] Small cap, low trading volume Ron, I must disagree on this. In no way do I encourage CANSLIMers to invest = / trade small cap stocks, regardless of price or ADV. A small cap stock, = by definition, means the higher the price, the less the ADV (and = institutional involvement and liquidity). And inversely, the higher the = ADV, the lower the price and higher the risk. On Friday, the Russell 2000 slipped back into a loss for 2001, the = last index to do so. Whether that marks the end of the small cap run = remains to be seen, it certainly shows that even the strongest of the = indexes have risk, and the risks are increasing as "M" deteriorates. Bottom line, small cap stocks have not been mainstream investing, much = less mainstream CANSLIM, for a number of years. And that did not change = this year. What changed briefly is that small and micro cap stocks = offered the only remaining source of earnings growth year to year. Anytime you try to get in early, whether it is on a big cap stock = still basing or a small cap stock suggesting a double or triple, you are = increasing your risks. There has been for over a century an unchanging rule in the markets: = the higher the return, the higher the risk. And that rule remains = inviolate regardless of "M", the system you use, and works in both bear = and bull markets. Tom Worley stkguru@netside.net AIM: TexWorley ----- Original Message -----=20 From: Ron Brown=20 To: canslim@lists.xmission.com=20 Sent: Sunday, July 08, 2001 8:53 AM Subject: Re: [CANSLIM] Small cap, low trading volume Hi Joe and Tom, I would like to put my two cents in here if you don't mind. I agree = with Tom that an investor who is going to play in this market cannot = afford to overlook low priced stocks. Clearly, the long term relative strength in the markets since early = April has been in the small caps. In recent weeks, the RUT has = faltered, and is trading at support, and is in danger of breaking the = 200 DMA. If so, the run for the RUT may be over. The market itself is = at a critical juncture, and if the gap is filled on the Nasdaq, I fear = we may be in for a retest of the April 4th low in the Nasdaq. Personally, I buy stocks from $5 up trading at least 40,000 shares = per day based on a 50 DMA. My biggest winners this year began their run = in the $6 to $10 range. If a person ignores this category of stock, you = will miss out on many huge winners like ALLY, which is featured in = Monday's IBD and was finally mentioned on CNBC last week. =20 One year ago, it was a $2.50 stock, and it closed Friday at $38.26, = over a 1600% increase for the year. It came up on our radar screens = around $12 in a strong leisure-gaming group. Finally, the media is = taking notice. ALLY probably has some gas left in the tank, but the = publicity comes after the huge run up, and at a point when the market is = facing a potential melt down. =20 I believe the key is the group, and if it breaks down, ALLY will = probably go with it. The story in IBD should give it a boost, but watch = the quality of the trading. It is still a leader in the group, but it = moved up Thursday on light volume, then sold off Friday on heavier = volume. I am out of ALLY now, but if the group holds up, and if it = bounces, I will considering getting back into it. =20 I am trying to reinforce Tom's point that if you find a stocks with = all the right credentials, you should consider getting in early. If you = do, scale in; buy a small quantity then add to your position as the = stocks heads higher. Know your stop, and pull the trigger if your trade = goes against you. Ron ----- Original Message -----=20 From: Tom Worley=20 To: canslim@lists.xmission.com=20 Sent: Saturday, July 07, 2001 11:20 PM Subject: Re: [CANSLIM] Small cap, low trading volume Hi Joe, I differ sharply from some of the guidelines of CANSLIM. With my = background and experience, it works for me, but likely would not work = for most. Thus I agree with you that most CANSLIMers should avoid either = low priced stocks, or stocks with low ADV. Several years ago, it seemed = that WON recommended stocks of at least $12 per share. More recently, it = seems he leans more towards a minimum price of $15 to $17. As to ADV, I = don't recall any specific recommendations from WON, but some of the = seminar attendees may have heard something. An ADV of 40 to 50 thousand = seems to be a fairly widely accepted minimum among CANSLIMers. For me personally, most stocks I buy are well under $10 / share, = and 10,000 ADV. But then, I break a lot of rules in trying to get in early. Tom Worley stkguru@netside.net AIM: TexWorley ----- Original Message -----=20 From: Jwpowers1@aol.com=20 To: canslim@lists.xmission.com=20 Sent: Sunday, July 08, 2001 12:10 AM Subject: [CANSLIM] Small cap, low trading volume I have avoided trading stocks under $10 and with under = $1,000,000 trading a=20 day, price * 50 day volume., I really like $2,000,000 I don't = want to be=20 more than a ripple going in or out.=20 What % of daily trading volume does O'Neil recommend as a max? = Or what do=20 you use?=20 My other choice would be to carry a lot more uncorrelated = smaller positions. =20 Is anyone doing this? 20 stocks vs 6-8?=20 Thanks for any input.=20 Joe=20 - ------=_NextPart_000_0039_01C10793.958E4340 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Tom,
 
I am not adhering to CANSLIM in the = strictest=20 definition of the word. 
 
I am talking opportunity, and if you = have been in=20 this market, the opportunities have been in the small caps.  I = believe I=20 said consider getting into small caps early if = they=20 have the right credentials.  Since=20 I can't adhere strictly to the gospel, I will keep my opinions to myself = in the=20 future. 
 
Anyone out there holding large cap tech = stocks can=20 tell us where the real risk has been in the market for the last 1 1/2=20 years.  Liquidity is a two-edged sword if you are on the wrong side = of the=20 elephants as they head for the exits.
 
With the advent of internet trading the = game has=20 changed, and you had better be nimble with either small or large cap = stocks, or=20 you are dead.  In a market like this, the true risks are waiting to = buy extended breakouts, then getting your head handed to you.  = Inexperienced traders who do not have the discipline to pull the trigger = either=20 getting in or getting out had better be in cash.  The ONLY way to = play a=20 market like this is to be in strong stocks in strong group, and many of = the=20 winners have been in small cap groups. 
 
I'm sorry I invaded your=20 territory.
 
See you,
 
Ron
 
 
----- Original Message -----
From:=20 Tom = Worley=20
Sent: Sunday, July 08, 2001 = 8:14 AM
Subject: Re: [CANSLIM] Small = cap, low=20 trading volume

Ron,
 
I must disagree on this. In no way do I encourage = CANSLIMers=20 to invest / trade small cap stocks, regardless of price or ADV. A = small cap=20 stock, by definition, means the higher the price, the less the ADV = (and=20 institutional involvement and liquidity). And inversely, the higher = the ADV,=20 the lower the price and higher the risk.
 
On Friday, the Russell 2000 slipped back into a = loss for=20 2001, the last index to do so. Whether that marks the end of the small = cap run=20 remains to be seen, it certainly shows that even the strongest of the = indexes=20 have risk, and the risks are increasing as "M" = deteriorates.
 
Bottom line, small cap stocks have not been = mainstream=20 investing, much less mainstream CANSLIM, for a number of years. And = that did=20 not change this year. What changed briefly is that small and micro cap = stocks=20 offered the only remaining source of earnings growth year to=20 year.
 
Anytime you try to get in early, whether it is on = a big cap=20 stock still basing or a small cap stock suggesting a double or triple, = you are=20 increasing your risks.
 
There has been for over a century an unchanging = rule in the=20 markets: the higher the return, the higher the risk. And that rule = remains=20 inviolate regardless of "M", the system you use, and works in both = bear and=20 bull markets.
 
Tom Worley
stkguru@netside.net
AIM:=20 TexWorley
----- Original Message -----
From:=20 Ron = Brown=20
Sent: Sunday, July 08, 2001 = 8:53=20 AM
Subject: Re: [CANSLIM] Small = cap, low=20 trading volume

Hi Joe and Tom,
 
I would like to put my two cents in = here if you=20 don't mind.  I agree with Tom that an investor who is = going to=20 play in this market cannot afford to overlook low priced=20 stocks.
 
Clearly, the long term relative = strength in the=20 markets since early April has been in the small caps.  In = recent weeks,=20 the RUT has faltered, and is trading at support, and is in danger of = breaking the 200 DMA.  If so, the run for the RUT may be = over. =20 The market itself is at a critical juncture, and if the gap is = filled on the=20 Nasdaq, I fear we may be in for a retest of the April 4th low in the = Nasdaq.
 
Personally, I buy stocks from $5 up = trading at=20 least 40,000 shares per day based on a 50 DMA.  My biggest = winners this=20 year began their run in the $6 to $10 range.  If a person = ignores this=20 category of stock, you will miss out on many huge winners like ALLY, = which=20 is featured in Monday's IBD and was finally mentioned on CNBC last=20 week. 
 
One year ago, it was a $2.50 stock, = and it=20 closed Friday at $38.26, over a 1600% increase for the year.  = It came=20 up on our radar screens around $12 in a strong leisure-gaming = group. =20 Finally, the media is taking notice.  ALLY probably has some = gas left=20 in the tank, but the publicity comes after the huge run up, and at a = point=20 when the market is facing a potential melt down. 
 
I believe the key is the group, and = if it=20 breaks down, ALLY will probably go with it.  The story in IBD = should=20 give it a boost, but watch the quality of the trading.  It is = still a=20 leader in the group, but it moved up Thursday on light volume, then = sold off=20 Friday on heavier volume.  I = am out of=20 ALLY now, but if the group holds up, and if it bounces, I will = considering=20 getting back into it. 
 
I am trying to reinforce Tom's = point that if=20 you find a stocks with all the right credentials, you should = consider=20 getting in early.  If you do, scale in; buy a small quantity = then add=20 to your position as the stocks heads higher.  Know your stop, = and pull=20 the trigger if your trade goes against you.
 
Ron
 
 
 
 
 
----- Original Message ----- =
From:=20 Tom=20 Worley
To: canslim@lists.xmission.com= =20
Sent: Saturday, July 07, = 2001 11:20=20 PM
Subject: Re: [CANSLIM] = Small cap, low=20 trading volume

Hi Joe,
 
I differ sharply from some of the guidelines = of CANSLIM.=20 With my background and experience, it works for me, but likely = would not=20 work for most. Thus I agree with you that most CANSLIMers should = avoid=20 either low priced stocks, or stocks with low ADV. Several years = ago, it=20 seemed that WON recommended stocks of at least $12 per share. More = recently, it seems he leans more towards a minimum price of $15 to = $17.  As to ADV, I don't recall any specific recommendations = from=20 WON, but some of the seminar attendees may have heard something. = An ADV of=20 40 to 50 thousand seems to be a fairly widely accepted minimum = among=20 CANSLIMers.
 
For me personally, most stocks I buy are well = under $10=20 / share, and 10,000 ADV.
 
But then, I break a lot of rules in trying to = get in=20 early.
 
Tom Worley
stkguru@netside.net
AIM:=20 TexWorley
----- Original Message ----- =
From:=20 Jwpowers1@aol.com
To: canslim@lists.xmission.com= =20
Sent: Sunday, July 08, = 2001 12:10=20 AM
Subject: [CANSLIM] Small = cap, low=20 trading volume

I have avoided trading stocks under $10 and = with=20 under $1,000,000 trading a
day, price * 50 day volume., I = really=20 like $2,000,000  I don't want to be
more than a ripple = going in=20 or out.

What % of daily trading volume does O'Neil = recommend as=20 a max?  Or what do
you use?

My other choice = would be to=20 carry a lot more uncorrelated smaller positions.  
Is = anyone=20 doing this?  20 stocks vs 6-8?

Thanks for any = input.=20
Joe=20 =
- ------=_NextPart_000_0039_01C10793.958E4340-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Sun, 8 Jul 2001 08:17:53 -0700 From: "Jay Oken" Subject: Re: [CANSLIM] Small cap, low trading volume This is a multi-part message in MIME format. - ------=_NextPart_000_00B6_01C10786.7C207AC0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Ron,=20 Tom does not regularly adhere to Canslim by his own account either, yet = he comes down on those who offer other investment advice. In addition, = he acts like he is the owner of the board and seldom allows for opinions = other than his own. When I first joined this board it was active with = many postings and quite a bit of varied discussion. As Tom has taken = over, and felt the need to respond to EVERY post on the board, it has = become less active with less lively discussions.=20 I thank all of you who have responded to my posts in the past and who = have taken the time post insightful information here. I will be signing = off from the Tom Worley show as well. Regards. - ----- Original Message -----=20 From: Ron Brown=20 To: canslim@lists.xmission.com=20 Sent: Sunday, July 08, 2001 7:51 AM Subject: Re: [CANSLIM] Small cap, low trading volume Tom, I am not adhering to CANSLIM in the strictest definition of the word. = I am talking opportunity, and if you have been in this market, the = opportunities have been in the small caps. I believe I said consider = getting into small caps early if they have the right credentials. Since = I can't adhere strictly to the gospel, I will keep my opinions to myself = in the future. =20 Anyone out there holding large cap tech stocks can tell us where the = real risk has been in the market for the last 1 1/2 years. Liquidity is = a two-edged sword if you are on the wrong side of the elephants as they = head for the exits. With the advent of internet trading the game has changed, and you had = better be nimble with either small or large cap stocks, or you are dead. = In a market like this, the true risks are waiting to buy extended = breakouts, then getting your head handed to you. Inexperienced traders = who do not have the discipline to pull the trigger either getting in or = getting out had better be in cash. The ONLY way to play a market like = this is to be in strong stocks in strong group, and many of the winners = have been in small cap groups. =20 I'm sorry I invaded your territory. See you, Ron ----- Original Message -----=20 From: Tom Worley=20 To: canslim@lists.xmission.com=20 Sent: Sunday, July 08, 2001 8:14 AM Subject: Re: [CANSLIM] Small cap, low trading volume Ron, I must disagree on this. In no way do I encourage CANSLIMers to = invest / trade small cap stocks, regardless of price or ADV. A small cap = stock, by definition, means the higher the price, the less the ADV (and = institutional involvement and liquidity). And inversely, the higher the = ADV, the lower the price and higher the risk. On Friday, the Russell 2000 slipped back into a loss for 2001, the = last index to do so. Whether that marks the end of the small cap run = remains to be seen, it certainly shows that even the strongest of the = indexes have risk, and the risks are increasing as "M" deteriorates. Bottom line, small cap stocks have not been mainstream investing, = much less mainstream CANSLIM, for a number of years. And that did not = change this year. What changed briefly is that small and micro cap = stocks offered the only remaining source of earnings growth year to = year. Anytime you try to get in early, whether it is on a big cap stock = still basing or a small cap stock suggesting a double or triple, you are = increasing your risks. There has been for over a century an unchanging rule in the markets: = the higher the return, the higher the risk. And that rule remains = inviolate regardless of "M", the system you use, and works in both bear = and bull markets. Tom Worley stkguru@netside.net AIM: TexWorley ----- Original Message -----=20 From: Ron Brown=20 To: canslim@lists.xmission.com=20 Sent: Sunday, July 08, 2001 8:53 AM Subject: Re: [CANSLIM] Small cap, low trading volume Hi Joe and Tom, I would like to put my two cents in here if you don't mind. I = agree with Tom that an investor who is going to play in this market = cannot afford to overlook low priced stocks. Clearly, the long term relative strength in the markets since = early April has been in the small caps. In recent weeks, the RUT has = faltered, and is trading at support, and is in danger of breaking the = 200 DMA. If so, the run for the RUT may be over. The market itself is = at a critical juncture, and if the gap is filled on the Nasdaq, I fear = we may be in for a retest of the April 4th low in the Nasdaq. Personally, I buy stocks from $5 up trading at least 40,000 shares = per day based on a 50 DMA. My biggest winners this year began their run = in the $6 to $10 range. If a person ignores this category of stock, you = will miss out on many huge winners like ALLY, which is featured in = Monday's IBD and was finally mentioned on CNBC last week. =20 One year ago, it was a $2.50 stock, and it closed Friday at = $38.26, over a 1600% increase for the year. It came up on our radar = screens around $12 in a strong leisure-gaming group. Finally, the media = is taking notice. ALLY probably has some gas left in the tank, but the = publicity comes after the huge run up, and at a point when the market is = facing a potential melt down. =20 I believe the key is the group, and if it breaks down, ALLY will = probably go with it. The story in IBD should give it a boost, but watch = the quality of the trading. It is still a leader in the group, but it = moved up Thursday on light volume, then sold off Friday on heavier = volume. I am out of ALLY now, but if the group holds up, and if it = bounces, I will considering getting back into it. =20 I am trying to reinforce Tom's point that if you find a stocks = with all the right credentials, you should consider getting in early. = If you do, scale in; buy a small quantity then add to your position as = the stocks heads higher. Know your stop, and pull the trigger if your = trade goes against you. Ron ----- Original Message -----=20 From: Tom Worley=20 To: canslim@lists.xmission.com=20 Sent: Saturday, July 07, 2001 11:20 PM Subject: Re: [CANSLIM] Small cap, low trading volume Hi Joe, I differ sharply from some of the guidelines of CANSLIM. With my = background and experience, it works for me, but likely would not work = for most. Thus I agree with you that most CANSLIMers should avoid either = low priced stocks, or stocks with low ADV. Several years ago, it seemed = that WON recommended stocks of at least $12 per share. More recently, it = seems he leans more towards a minimum price of $15 to $17. As to ADV, I = don't recall any specific recommendations from WON, but some of the = seminar attendees may have heard something. An ADV of 40 to 50 thousand = seems to be a fairly widely accepted minimum among CANSLIMers. For me personally, most stocks I buy are well under $10 / share, = and 10,000 ADV. But then, I break a lot of rules in trying to get in early. Tom Worley stkguru@netside.net AIM: TexWorley ----- Original Message -----=20 From: Jwpowers1@aol.com=20 To: canslim@lists.xmission.com=20 Sent: Sunday, July 08, 2001 12:10 AM Subject: [CANSLIM] Small cap, low trading volume I have avoided trading stocks under $10 and with under = $1,000,000 trading a=20 day, price * 50 day volume., I really like $2,000,000 I don't = want to be=20 more than a ripple going in or out.=20 What % of daily trading volume does O'Neil recommend as a max? = Or what do=20 you use?=20 My other choice would be to carry a lot more uncorrelated = smaller positions. =20 Is anyone doing this? 20 stocks vs 6-8?=20 Thanks for any input.=20 Joe=20 - ------=_NextPart_000_00B6_01C10786.7C207AC0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Ron,
 
Tom does not regularly adhere to = Canslim by his own=20 account either, yet he comes down on those who offer other investment = advice. In=20 addition, he acts like he is the owner of the board and seldom allows = for=20 opinions other than his own. When I first joined this board it was = active with=20 many postings and quite a bit of varied discussion. As Tom has taken = over, and=20 felt the need to respond to EVERY post on the board, it has become less = active=20 with less lively discussions.
 
I thank all of you who have responded = to my posts=20 in the past and who have taken the time post insightful information = here. I will=20 be signing off from the Tom Worley show as well.
 
Regards.
 
----- Original Message -----
From:=20 Ron = Brown
Sent: Sunday, July 08, 2001 = 7:51 AM
Subject: Re: [CANSLIM] Small = cap, low=20 trading volume

Tom,
 
I am not adhering to CANSLIM in the = strictest=20 definition of the word. 
 
I am talking opportunity, and if you = have been in=20 this market, the opportunities have been in the small caps.  I = believe I=20 said consider getting into small caps early = if they=20 have the right credentials.  Since I can't adhere strictly to the gospel, I will keep my = opinions to=20 myself in the future. 
 
Anyone out there holding large cap = tech stocks=20 can tell us where the real risk has been in the market for the last 1 = 1/2=20 years.  Liquidity is a two-edged sword if you are on the wrong = side of=20 the elephants as they head for the exits.
 
With the advent of internet trading = the game has=20 changed, and you had better be nimble with either small or large cap = stocks,=20 or you are dead.  In a market like this, the true risks are = waiting to=20 buy extended breakouts, then getting your head handed to = you. =20 Inexperienced traders who do not have the discipline to pull the = trigger=20 either getting in or getting out had better be in cash.  The ONLY = way to=20 play a market like this is to be in strong stocks in strong group, and = many of=20 the winners have been in small cap groups. 
 
I'm sorry I invaded your=20 territory.
 
See you,
 
Ron
 
 
----- Original Message -----
From:=20 Tom=20 Worley
Sent: Sunday, July 08, 2001 = 8:14=20 AM
Subject: Re: [CANSLIM] Small = cap, low=20 trading volume

Ron,
 
I must disagree on this. In no way do I = encourage=20 CANSLIMers to invest / trade small cap stocks, regardless of price = or ADV. A=20 small cap stock, by definition, means the higher the price, the less = the ADV=20 (and institutional involvement and liquidity). And inversely, the = higher the=20 ADV, the lower the price and higher the risk.
 
On Friday, the Russell 2000 slipped back into a = loss for=20 2001, the last index to do so. Whether that marks the end of the = small cap=20 run remains to be seen, it certainly shows that even the strongest = of the=20 indexes have risk, and the risks are increasing as "M"=20 deteriorates.
 
Bottom line, small cap stocks have not been = mainstream=20 investing, much less mainstream CANSLIM, for a number of years. And = that did=20 not change this year. What changed briefly is that small and micro = cap=20 stocks offered the only remaining source of earnings growth year to=20 year.
 
Anytime you try to get in early, whether it is = on a big=20 cap stock still basing or a small cap stock suggesting a double or = triple,=20 you are increasing your risks.
 
There has been for over a century an unchanging = rule in=20 the markets: the higher the return, the higher the risk. And that = rule=20 remains inviolate regardless of "M", the system you use, and works = in both=20 bear and bull markets.
 
Tom Worley
stkguru@netside.net
AIM:=20 TexWorley
----- Original Message ----- =
From:=20 Ron = Brown=20
To: canslim@lists.xmission.com= =20
Sent: Sunday, July 08, 2001 = 8:53=20 AM
Subject: Re: [CANSLIM] = Small cap, low=20 trading volume

Hi Joe and Tom,
 
I would like to put my two cents = in here if=20 you don't mind.  I agree with Tom that an investor who = is going=20 to play in this market cannot afford to overlook low priced=20 stocks.
 
Clearly, the long term relative = strength in=20 the markets since early April has been in the small caps.  In = recent=20 weeks, the RUT has faltered, and is trading at support, and is in = danger=20 of breaking the 200 DMA.  If so, the run for the RUT may be=20 over.  The market itself is at a critical juncture, and if = the gap is=20 filled on the Nasdaq, I fear we may be in for a retest of the = April 4th=20 low in the Nasdaq.
 
Personally, I buy stocks from $5 = up trading=20 at least 40,000 shares per day based on a 50 DMA.  My biggest = winners=20 this year began their run in the $6 to $10 range.  If a = person=20 ignores this category of stock, you will miss out on many huge = winners=20 like ALLY, which is featured in Monday's IBD and was finally = mentioned on=20 CNBC last week. 
 
One year ago, it was a $2.50 = stock, and it=20 closed Friday at $38.26, over a 1600% increase for the year.  = It came=20 up on our radar screens around $12 in a strong leisure-gaming = group. =20 Finally, the media is taking notice.  ALLY probably has some = gas left=20 in the tank, but the publicity comes after the huge run up, and at = a point=20 when the market is facing a potential melt down.  =
 
I believe the key is the group, = and if it=20 breaks down, ALLY will probably go with it.  The story in IBD = should=20 give it a boost, but watch the quality of the trading.  It is = still a=20 leader in the group, but it moved up Thursday on light volume, = then sold=20 off Friday on heavier volume.  I am=20 out of ALLY now, but if the group holds up, and if it bounces, I = will=20 considering getting back into it. 
 
I am trying to reinforce Tom's = point that if=20 you find a stocks with all the right credentials, you should = consider=20 getting in early.  If you do, scale in; buy a small quantity = then add=20 to your position as the stocks heads higher.  Know your stop, = and=20 pull the trigger if your trade goes against you.
 
Ron
 
 
 
 
 
----- Original Message ----- =
From:=20 Tom=20 Worley
To: canslim@lists.xmission.com= =20
Sent: Saturday, July 07, = 2001 11:20=20 PM
Subject: Re: [CANSLIM] = Small cap,=20 low trading volume

Hi Joe,
 
I differ sharply from some of the guidelines = of=20 CANSLIM. With my background and experience, it works for me, but = likely=20 would not work for most. Thus I agree with you that most = CANSLIMers=20 should avoid either low priced stocks, or stocks with low ADV. = Several=20 years ago, it seemed that WON recommended stocks of at least $12 = per=20 share. More recently, it seems he leans more towards a minimum = price of=20 $15 to $17.  As to ADV, I don't recall any specific = recommendations=20 from WON, but some of the seminar attendees may have heard = something. An=20 ADV of 40 to 50 thousand seems to be a fairly widely accepted = minimum=20 among CANSLIMers.
 
For me personally, most stocks I buy are = well under=20 $10 / share, and 10,000 ADV.
 
But then, I break a lot of rules in trying = to get in=20 early.
 
Tom Worley
stkguru@netside.net
AIM:=20 TexWorley
----- Original Message ----- =
From:=20 Jwpowers1@aol.com
To: canslim@lists.xmission.com= =20
Sent: Sunday, July 08, = 2001 12:10=20 AM
Subject: [CANSLIM] = Small cap, low=20 trading volume

I have avoided trading stocks = under $10 and=20 with under $1,000,000 trading a
day, price * 50 day = volume., I=20 really like $2,000,000  I don't want to be
more than = a ripple=20 going in or out.

What % of daily trading volume does = O'Neil=20 recommend as a max?  Or what do
you use?

My = other=20 choice would be to carry a lot more uncorrelated smaller = positions.=20  
Is anyone doing this?  20 stocks vs 6-8?=20

Thanks for any input.
Joe=20 =
- ------=_NextPart_000_00B6_01C10786.7C207AC0-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ End of canslim-digest V2 #1554 ****************************** To unsubscribe to canslim-digest, send an email to "majordomo@xmission.com" with "unsubscribe canslim-digest" in the body of the message. For information on digests or retrieving files and old messages send "help" to the same address. Do not use quotes in your message.