From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #1864 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 Thursday, November 29 2001 Volume 02 : Number 1864 In this issue: [CANSLIM] EPIQ Re: [CANSLIM] CPRT Re: [CANSLIM] Re: (CANSLIM) Things I Learned ---------------------------------------------------------------------- Date: Thu, 29 Nov 2001 01:29:03 -0500 From: "Tom Worley" Subject: [CANSLIM] EPIQ This is a multi-part message in MIME format. - ------=_NextPart_000_00AD_01C17875.3B0D03E0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable OK, that does it. Pattern broken, breakout is completely over. SELL, = SELL, SELL. Everybody out of the pool, this stock is doomed, the edge of = the cliff is nearby. Get out while you still can. Hopefully there are still a few IBD writers listening, and can scare the = rest of the holders out and let me buy some shares cheap. Fun aside, the chart is looking really ugly, and is likely going to need = some time to heal itself, and set a new support area. Tom Worley stkguru@netside.net AIM: TexWorley - ------=_NextPart_000_00AD_01C17875.3B0D03E0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable

OK, that does it. Pattern broken, breakout is = completely over.=20 SELL, SELL, SELL. Everybody out of the pool, this stock is doomed, the = edge of=20 the cliff is nearby. Get out while you still can.

Hopefully there are still a few IBD writers = listening, and can=20 scare the rest of the holders out and let me buy some shares = cheap.

Fun aside, the chart is looking really ugly, and is = likely=20 going to need some time to heal itself, and set a new support = area.

Tom Worley
stkguru@netside.net
AIM:=20 TexWorley

- ------=_NextPart_000_00AD_01C17875.3B0D03E0-- - - - -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: Thu, 29 Nov 2001 01:32:39 -0500 From: "Tom Worley" Subject: Re: [CANSLIM] CPRT This is a multi-part message in MIME format. - ------=_NextPart_000_00B5_01C17875.BB506740 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Sounds like a fair assessment. Year 2002 earnings forecast for only 22% growth. But last 4 qtrs well = exceed that. So either forecast too low, or someone thinks earnings are = going to decelerate. Tom Worley stkguru@netside.net AIM: TexWorley ----- Original Message -----=20 From: Eric Jaenike=20 To: canslim group=20 Sent: Wednesday, November 28, 2001 11:00 AM Subject: [CANSLIM] CPRT Appears to have broken out of short base on base double bottom = yesterday. Up again today on volume, may come back into range. Shorter = base than I would prefer, but RS at new high, trending up, good overall = numbers. Volume dryups at base lows. Opinions? - -------------------------------------------------------------------------= - ----- Do You Yahoo!? Yahoo! GeoCities - quick and easy web site hosting, just $8.95/month. - ------=_NextPart_000_00B5_01C17875.BB506740 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable

Sounds like a fair assessment.

Year 2002 earnings forecast for only 22% growth. But = last 4=20 qtrs well exceed that. So either forecast too low, or someone thinks = earnings=20 are going to decelerate.

Tom Worley
stkguru@netside.net
AIM:=20 TexWorley

----- Original Message -----

From:=20 Eric=20 Jaenike

To: canslim group

Sent: Wednesday, November 28, = 2001 11:00=20 AM

Subject: [CANSLIM] CPRT

Appears to have broken out of short base on base double = bottom=20 yesterday. Up again today on volume, may come back into range. Shorter = base=20 than I would prefer, but RS at new high, trending up, good overall = numbers.=20 Volume dryups at base lows. Opinions?

Do You Yahoo!?
Yahoo!=20 GeoCities - quick and easy web site hosting, just=20 $8.95/month. - ------=_NextPart_000_00B5_01C17875.BB506740-- - - - -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: Thu, 29 Nov 2001 07:55:10 -0500 From: "Tom Worley" Subject: Re: [CANSLIM] Re: (CANSLIM) Things I Learned This is a multi-part message in MIME format. - ------=_NextPart_000_0010_01C178AB.2C074820 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Hi Katherine, Yes, the VR fund is real for everything but the money, which is the = Virtual Reality part. I am charged commissions, daily admin fees, SEC = fee on sales, etc. Transactions are matched against actual market = activity (so if I try to buy 1500 shares and only 300 get done, I only = get that much filled). Have to meet SEC rules on qualifying as a fund = (have to be 65% invested, for example, with at least half the portfolio = consisting of positions of less than 5%). I only buy (whether in the IRA or the fund) small and micro cap growth = stocks, mostly technology. I don't like cyclical or defensive issues at = all. Occasionally I may buy a stock with a market cap exceeding $500 = million, but it's rare. More often the cap is under $100 million. One reason the fund did so much better is diversification - 41 stocks = compared to 6. Additionally, I still had cash available and used it = after the Sept lows, while the IRA as usual was already fully invested. = Also, because no one gets hurt with the fund's activities, I am a little = more casual, especially with my buys. With the IRA, too often I decided = to wait and watch for a while, or try to buy with a limit order below = the then market, and ended up missing a fine breakout (DOCC up 50% in = one week, for example - fund got it, IRA didn't). Tom Worley stkguru@netside.net AIM: TexWorley ----- Original Message -----=20 From: Katherine Malm=20 To: canslim@lists.xmission.com=20 Sent: Thursday, November 29, 2001 12:53 AM Subject: Re: [CANSLIM] Re: (CANSLIM) Things I Learned Hi Tom, In principle, I guess logically I agree with you. Certainly a weak, = even declining, group can hold the best of stocks back from full = potential performance. I do glance at GRS when I find a good stock = chart, but it does not factor into my decision making whether strong or = weak. Now that I can look at group charts at the DGO beta (at least I = think that's there), I will be interested in seeing how the groups = represented in my VRfund have done by comparison. In particular, I am = interested in seeing if my style of picking stocks also happened to put = me into mostly rising groups. I will also be looking to see if any of = those groups also rose 40% or better since the Sept lows. =20 In fact, I was thinking about your investments as I was washing the = 50th mixing bowl at the cooking school this evening (I volunteer there) = and was wondering about this very thing. It may just be that you are = instinctively choosing stocks in rising industry groups and it would be = interesting to do some analysis to see if that is so. I'm curious about = something, however. I'm assuming this "VRfund" you speak of is a = "Virtual" fund. Not real money? I know you've posted returns on these = funds and I just wonder why the VRfund has returns that are so much = higher than the IRA. (sorry if I've got these mixed up.) Are you using = very different styles? What causes such differences? Among other things, = could it be related to ignoring industry movement? Just random thoughts. = That darn chef was cranking out dishes faster than I could blink and the = other volunteer spent all her time watching what the chef was doing = instead of helping me! But the fact remains that I have made nice money off stocks where = the GRS was in single or very low double digit numbers. GRS has never = scared me off a stock, nor made me any more interested in buying it. But = then I also think my style would not likely work for very many others, = even if they were risk takers. =20 Are you primarily in microcaps? So many different factors there than = the typical small or mid cap that favors the CANSLIM style. Also, are = you sticking to growth stocks or do you partake in cyclicals and = defensives? With those in particular, the *only* way to make any money = is to catch them at the bottom and ride them through the next cycle. Of = course, you'd never want to wait until these are top rated industries to = be getting in. Again, very different animal. My comment, however, was primarily geared around the comment from = the seminar that if you had two stocks with high RS, then the GRS = element was satisfied. For those who find GRS rating an integral part of = their stock selection methodology, I would be disturbed by that notion. = At a minimum, I would think that concept would also have to be combined = with a requirement that GRS already be rising, even if still at a low = number. =20 I've been to two of WON's full day seminars. I suspect that if we = were to transcript the discussion, I'd bet there was more to it than the = brief notes that Chris so graciously brought to the group. WON's = experienced and I doubt that he would have suggested that the two stocks = left standing in a declining industry would be a good investment. It = makes no sense and goes against everything he teaches. Example...CSCO = was just about the last stock standing in its group in early 2000. = Leader in the group, but the group seriously damaged. Good investment in = late April 2000? Not a chance in &*%@. Yet, there were people who = pounded the table saying that it was "a good buy" at 69.33. If people = had done nothing else but industry analysis they would have known how = bogus that was. =20 Glad to see the DGO beta add industry info...I've been after them = for years to do it, but they did not because it would add too many = features available only in the WONDA product for which people paid big = bucks. I think the fact that it's now included demonstrates how = important WON thinks industry action is in determining the health and = attractiveness of a particular stock, even for us little guys. =20 Katherine ----- Original Message -----=20 From: Katherine Malm=20 To: canslim@lists.xmission.com=20 Sent: Wednesday, November 28, 2001 9:07 AM Subject: Re: [CANSLIM] Re: (CANSLIM) Things I Learned Hi Tom, =20 Here's the problem and the reason why my approach would still = hold, i.e., you replied: >>.So I find it hard to understand how having only two performers = in a large group that is otherwise trending down would be sufficient to = offset the negative group trend. =20 I would never be interested in a industry that was *declining*. I = am only interested in a group that is *RISING.* Very different animal = there. I never mine for candidates based on GRS because it hides rising = groups and rising stocks. If the GRS is low, but there are stocks in the = group that are doing well, that speaks to me. In particular, in a bear = market, I want to be mining for stocks that show their ability to buck = the trend. Very important for uncovering the gems. Similarly, if you = mine for candidates based on "high" GRS, you are more likely to be = focused on groups that are getting ready to top out. My motto: top = stocks top out and then they decline. I don't want to be there. I want = to be in the stocks coming up in ranks as they *become* top stocks. When = their run is over, I get out. In the Great Bull, this may have taken = months or years. In the Great Bear, this process can take a few weeks. =20 >>I am not a "group follower", and give very little weight to GRS =20 I think this is a dangerous practice. Witness TARO as our list's = recent example, so good in fact that the IBD chose to use it themselves = as an example. Being unaware of group action hides the "truth" about = institutional money's "feel" about the group. A bit like letting the = big dog do the sniffing for you. To make big money over a long period of = time, we *must* be in the right stocks in the right industries. =20 Katherine =20 ----- Original Message -----=20 From: Tom Worley=20 To: canslim@lists.xmission.com=20 Sent: Wednesday, November 28, 2001 8:05 AM Subject: Re: [CANSLIM] Re: (CANSLIM) Things I Learned Hi Katherine, I am not a "group follower", and give very little weight to GRS, = contrary to WON's guidance (just one of my many CANSLIM sins). But I = know that many members of this group use the group ranking, strength or = trends as their starting point in finding picks. So I find it hard to = understand how having only two performers in a large group that is = otherwise trending down would be sufficient to offset the negative group = trend. I agree with what you say below, certainly some groups are a = real hodge podge of companies. And the stellar performance and fundies = of one can be confirmed by the performance of a competitor. But = likewise, another competitor could also offset that. And a broader = industry group could also provide a broader indication of the = generalized industry trend, to which one or two companies have simply = failed to follow, YET. If Group RS is a fundamental part of your process in picking = stocks, I just don't see how you can disregard the group RS if you have = two good stocks in that group. Tom Worley stkguru@netside.net AIM: TexWorley ----- Original Message -----=20 From: Katherine Malm=20 To: canslim@lists.xmission.com=20 Sent: Wednesday, November 28, 2001 8:34 AM Subject: Re: [CANSLIM] Re: (CANSLIM) Things I Learned >>If you have two stocks with high RS, this is enough to = satisfy the Group RS. This was news to me, and doesn't make a lot of = sense, either. =20 Tom, Chris =20 I have a slightly different perspective on this one. Often = times, when a group is composed of many members, you'll find that their = business models don't really "match." In this case, I always find the = direct competitors of the stock in question and look at its performance = against just these stocks. If these are moving up in tandem, it says = something. Also, my belief is different than WON's. I am always looking = for *rising* industries, not necessarily *top* industries. If a = particular stock is rising in a group that is not yet a "top" industry, = it is very often the strongest stock in the group. But, you want to be = sure there is some additional confirmation of the move. WON *does* say = that you do not want a lone wolf, you always want to see at least one = additional stock in the "group" moving up as well. And just to be = complete, the stocks should, of course have all the requisite = fundamental characteristics: accelerating sales & earnings, ROE>=3D17%, = cash flow closely mirroring EPS, an "N", sound financials, and sound = strategic planning and execution. =20 Katherine ----- Original Message -----=20 From: Tom Worley=20 To: canslim@lists.xmission.com=20 Sent: Wednesday, November 28, 2001 6:25 AM Subject: Re: [CANSLIM] Re: (CANSLIM) Things I Learned Chris, I would also like to add my thanks for you spending = your time in effort in giving us this report. I found it informative and = well worth reading, as well as some new material. I have thrown in some = comments below. Tom Worley stkguru@netside.net AIM: TexWorley ----- Original Message -----=20 From: Chris Mc=20 To: canslim@lists.xmission.com=20 Sent: Tuesday, November 27, 2001 7:02 PM Subject: [CANSLIM] Re: (CANSLIM) Things I Learned =20 Well - here goes - I hope Paul is right! I recently attended the IBD Seminar in L.A. and wanted = to share a few of my learnings with you. Please know that I am still in = the learning curve and just starting my second reading of HTMMIS so this = is my understanding of some of the comments and perhaps you can answer a = few questions for me. Asset allocation - 30-40% in this market, 3 to 4 stocks. = WON compared this market to a 75 mph freeway and it's now at 5 mph - = slow and tough. It's down so much, there's no base and we are gradually = coming off the bottom, but a slow process and sooner or later the = momentum will return. Doing what it should be doing. Hit bottom and = turned. Correcting for euphoria similar to the 1962 period which took = time to recover because it was damaged so seriously. Could be 3 - 6 - 9 = - - 18 months before we see patterns - coming out of the grave. Patience, = and time. I thought because of M we shouldn't be in the market at = all but I guess if you are confident in what you're doing, it's o.k. to = break a few rules?? It's not so much that you are breaking rules to be = partially invested at this point. While a switch from bear to bull was = only confirmed by the DOW 30 (only one to gain 20% from the low), "M" = has been much stronger since Sept 21. So limited investing is still = within CANSLIM guidelines. That also goes to the other comment of no = pyramiding up, buy it right, but don't add to the position (something I = have been violating in my VR Fund with some success, so personally don't = agree with this point). =20 Small or large cap - Doesn't make any difference. Funds = have gotten bigger and bigger, and they have enormous buying power for = big cap stocks as well as small ones. The key thing is that, is the = pattern exactly right, are the earnings there, the market right, all the = other things. AOL was trading 7 Million shares a day, it was a big cap = stock and went up 400-500%. I think the difference still remains that is = is far easier for a small cap to show 20-50% or more earnings growth = than for a big cap. But the big cap gives you more stability and safety = in this kind of "M". Chart discussions of PECS, CYTC, EASI, L3 - straight off = the bottom, no pullback. These are the ones that are risky in this = market environment -they run too far, too fast. 2 out of 3 stocks like = this aren't making it. If you know enough about the company and you're = convinced everythings alright, maybe it'll work. Bigger cap stocks are a little bit safer and sounder = because if you're wrong, it's going to cost you more than 1 or 2 points. = Pivot - in this market, buy at the pivot. No pyramiding = in this market. OK to buy within 5% of pivot in a bull market. =20 Have you heard this before or is this a "Revision"? I = would say it's a reflection of "M" and the number of failed breakouts. = Take a partial position and manage it. If you bought right, make a = limited amount of money. But if you pyramid, and it then fails, your = follow on buys will wipe out your success from the first buy. =20 Charts - A lot of the charts don't seem to be working, a = lot of the breakouts seem to be failing. It's not that the charts are = not working, you're buying bad bases that are faulty and have something = wrong with them, they're incorrect bases. Handles can be looser and cups may be deeper coming out = of a bear market. Cups and handles should be porportional - small cup, = small handle. Big cup, longer handle. If it's not a C&H, not a double bottom, not a flat base, = it's a nothing. After you go through all the models, it has to fit or = it's a nothing. (My den is now wallpapered in Chart Patterns) There are very few sound bases - not there yet. Easy to = get sucked in - great story, great earnings, but we're in a tough market = and you can't play aggressively. AZO is an exception and one of the few = stocks that worked although extended now. =20 Tom - do you think the pattern broke on EPIQ and do you = see anything that caused it to break or was it just a function of the = market? When you do the WWW, are you looking at Daily or Weekly charts? = Aside from the article in IBD, and the downgrade by AG Edwards, you can = add in that the company has been moving very fast with two stock splits = this year, plus registering 1.3 million restricted shares, plus having = options trading, plus another cash acquisition, plus up several hundred = percent for the year. The two stocks splits are worrying some investors = according to a board I visited on yahoo. Because of the added liquidity, = and likely now the options, short position is up 13% to 8.3 days. That = equates to better than 1.6 million shares, or 21% of the float. Of = course, that may have dropped a lot in the past week. The collapse on = 11/21 didn't quite break the pattern, and we saw a small recovery. But = yesterday's fall, which broke to the bottom of the short base at $30, = did end the breakout pattern and further weaken the chart. I am not = trying to buy just now, and would not be surprised by further price = deterioration, where I will buy because of my belief long term in the = business model. For WWW, I use Daily Charts and only look at the latest = six months. =20 Fallen Angels - There were lots of chart discussions - = CSCO, SUNW, ORCL and it seemed alot of them were similar. No base, = thick overhead supply, no prior uptrend, have probably hit bottom but = are they going to be leaders again? Sooner or later they get into a = big stalling thing, they just don't do much for 3 - 4 - 5 months while = something else is moving better.=20 =20 It seems every chart I look at has the same pattern. So = we wait for a base to form but while we're waiting, it's gone up = 50-100%?? Not that many have gone up that far, even from their recent = lows. And remember many are down as much as 90% from their high of the = past 12-18 months, so even a double from recent lows still leaves them a = very long way to go for a true new high. =20 9/11 - Caused a panic and a bad break in a lot of things = and it explains it but don't make an alibi for the stock and say it = broke 20 points but the reason was this, therefore it's o.k.? Is the = pattern right or not? Don't make excuses or alibis for stocks. =20 If you don't have the C & A, you better have the N & L. = (Isn't this another mortal sin?) M counts for at least 50% of the whole = ballgame.=20 =20 If you have two stocks with high RS, this is enough to = satisfy the Group RS. This was news to me, and doesn't make a lot of = sense, either. =20 Lots of revisions in next edition of HTMMIS - should be = out in January. (I suppose to some extent we learn of revisions as they = develop, i.e. buy within .10 of pivot and not .13 but I think it's good = there are some revisions as conditons change - ?) =20 I thought the seminar was well organized, staff friendly = and welcoming. WON spoke for almost the entire session, except an hour = in the AM and an hour in the PM, had a group constantly surrounding him = and even took questions during lunch. It was such a terrific = opportunity to see and listen to WON and I would highly recommend the = seminar to anyone interested in the market, although they do call it = "Advanced" and you need to have some understanding of CANSLIM. They = did not push IBD or DGO, but merely explained the services offered and = were very accommodating in answering questions. =20 =20 The seminar was extremely worthwhile for me but it seems = the more I learn, the more I have to learn. Did anyone else attend? = Comments appreciated. =20 Chris Mc =20 - ------=_NextPart_000_0010_01C178AB.2C074820 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable

Hi Katherine,

Yes, the VR fund is real for everything but the = money, which=20 is the Virtual Reality part. I am charged commissions, daily admin fees, = SEC fee=20 on sales, etc. Transactions are matched against actual market activity = (so if I=20 try to buy 1500 shares and only 300 get done, I only get that much = filled). Have=20 to meet SEC rules on qualifying as a fund (have to be 65% invested, for = example,=20 with at least half the portfolio consisting of positions of less than=20 5%).

I only buy (whether in the IRA or the fund) small = and micro=20 cap growth stocks, mostly technology. I don't like cyclical or defensive = issues=20 at all. Occasionally I may buy a stock with a market cap exceeding $500 = million,=20 but it's rare. More often the cap is under $100 million.

One reason the fund did so much better is = diversification - 41=20 stocks compared to 6. Additionally, I still had cash available and used = it after=20 the Sept lows, while the IRA as usual was already fully invested. Also, = because=20 no one gets hurt with the fund's activities, I am a little more casual,=20 especially with my buys. With the IRA, too often I decided to wait and = watch for=20 a while, or try to buy with a limit order below the then market, and = ended up=20 missing a fine breakout (DOCC up 50% in one week, for example - fund got = it, IRA=20 didn't).

Tom Worley
stkguru@netside.net
AIM:=20 TexWorley

----- Original Message -----
From:=20 Katherine=20 Malm
To: canslim@lists.xmission.com =

Sent: Thursday, November 29, = 2001 12:53=20 AM

Subject: Re: [CANSLIM] Re: = (CANSLIM)=20 Things I Learned

Hi Tom,

In principle, I guess logically I agree with = you.=20 Certainly a weak, even declining, group can hold the best of stocks = back=20 from full potential performance. I do glance at GRS when I find a = good stock=20 chart, but it does not factor into my decision making whether strong = or=20 weak. Now that I can look at group charts at the DGO beta (at = least I=20 think that's there), I will be interested in seeing how the groups=20 represented in my VRfund have done by comparison. In particular, I = am=20 interested in seeing if my style of picking stocks also happened to = put me=20 into mostly rising groups. I will also be looking to see if any of = those=20 groups also rose 40% or better since the Sept lows.

In fact, I was thinking about your = investments as I=20 was washing the 50th mixing bowl at the cooking school this evening = (I=20 volunteer there) and was wondering about this very thing. It may = just be=20 that you are instinctively choosing stocks in rising industry groups = and it=20 would be interesting to do some analysis to see if that is so. I'm = curious=20 about something, however. I'm assuming this "VRfund" you speak of is = a=20 "Virtual" fund. Not real money? I know you've posted returns on = these funds=20 and I just wonder why the VRfund has returns that are so much higher = than=20 the IRA. (sorry if I've got these mixed up.) Are you using very = different=20 styles? What causes such differences? Among other things, could it = be=20 related to ignoring industry movement? Just random thoughts. That = darn chef=20 was cranking out dishes faster than I could blink and the other = volunteer=20 spent all her time watching what the chef was doing instead of = helping=20 me!

But the fact remains that I have made nice money = off=20 stocks where the GRS was in single or very low double digit numbers. = GRS has=20 never scared me off a stock, nor made me any more interested in = buying it.=20 But then I also think my style would not likely work for very many = others,=20 even if they were risk takers.

Are you primarily in microcaps? So many = different=20 factors there than the typical small or mid cap that favors the = CANSLIM=20 style. Also, are you sticking to growth stocks or do you partake in=20 cyclicals and defensives? With those in particular, the *only* way = to make=20 any money is to catch them at the bottom and ride them through the = next=20 cycle. Of course, you'd never want to wait until these are top rated = industries to be getting in. Again, very different = animal.

My comment, however, was primarily geared around = the=20 comment from the seminar that if you had two stocks with high RS, = then the=20 GRS element was satisfied. For those who find GRS rating an integral = part of=20 their stock selection methodology, I would be disturbed by that = notion. At a=20 minimum, I would think that concept would also have to be combined = with a=20 requirement that GRS already be rising, even if still at a low=20 number.

I've been to two of WON's full day = seminars. I=20 suspect that if we were to transcript the discussion, I'd bet there = was more=20 to it than the brief notes that Chris so graciously brought to the = group.=20 WON's experienced and I doubt that he would have suggested that = the two=20 stocks left standing in a declining industry would be a good = investment. It=20 makes no sense and goes against everything he teaches. = Example...CSCO was=20 just about the last stock standing in its group in early 2000. = Leader in the=20 group, but the group seriously damaged. Good investment in late = April 2000?=20 Not a chance in &*%@. Yet, there were people who pounded the = table=20 saying that it was "a good buy" at 69.33. If people had=20 done nothing else but industry analysis they would = have known how=20 bogus that was.

Glad to see the DGO beta add industry = info...I've=20 been after them for years to do it, but they did not because it = would add=20 too many features available only in the WONDA product for which = people paid=20 big bucks. I think the fact that it's now included demonstrates how=20 important WON thinks industry action is in determining the health = and=20 attractiveness of a particular stock, even for us little = guys.

Katherine

----- Original Message ----- =
From:=20 Katherine=20 Malm
To: canslim@lists.xmission.com =

Sent: Wednesday, November = 28, 2001=20 9:07 AM

Subject: Re: [CANSLIM] Re: = (CANSLIM)=20 Things I Learned

Hi Tom,

Here's the problem and the reason = why my=20 approach would still hold, i.e., you replied:

>>.So I=20 find it hard to understand how having only two performers in a = large group=20 that is otherwise trending down would be = sufficient to=20 offset the negative group = trend.

I would never be interested in a = industry=20 that was *declining*. I am only interested in a group that is = *RISING.*=20 Very different animal there. I never mine for candidates based on = GRS=20 because it hides rising groups and rising stocks. If the GRS is = low, but=20 there are stocks in the group that are doing well, that speaks to = me. In=20 particular, in a bear market, I want to be mining for stocks that = show=20 their ability to buck the trend. Very important for uncovering the = gems.=20 Similarly, if you mine for candidates based on "high" GRS, you are = more=20 likely to be focused on groups that are getting ready to top out. = My=20 motto: top stocks top out and then they decline. I don't want to = be there.=20 I want to be in the stocks coming up in ranks as they *become* top = stocks.=20 When their run is over, I get out. In the Great Bull, this may = have taken=20 months or years. In the Great Bear, this process can take a few=20 weeks.

>>I am not=20 a "group follower", and give very little weight to = GRS

I think this is a dangerous = practice. Witness=20 TARO as our list's recent example, so good in fact that the IBD = chose to=20 use it themselves as an example. Being unaware of group action = hides the=20 "truth" about institutional money's  "feel" about the = group. A=20 bit like letting the big dog do the sniffing for you. To make big = money=20 over a long period of time, we *must* be in the right stocks in = the=20 right industries.

Katherine

----- Original Message ----- =
From:=20 Tom=20 Worley
To: canslim@lists.xmission.com

Sent: Wednesday, November = 28, 2001=20 8:05 AM

Subject: Re: [CANSLIM] = Re:=20 (CANSLIM) Things I Learned

Hi Katherine,

I am not a "group follower", and give very = little=20 weight to GRS, contrary to WON's guidance (just one of my many = CANSLIM=20 sins). But I know that many members of this group use the group = ranking,=20 strength or trends as their starting point in finding picks. So = I find=20 it hard to understand how having only two performers in a large = group=20 that is otherwise trending down would be sufficient to offset = the=20 negative group trend.

I agree with what you say below, certainly = some groups=20 are a real hodge podge of companies. And the stellar performance = and=20 fundies of one can be confirmed by the performance of a = competitor. But=20 likewise, another competitor could also offset that. And a = broader=20 industry group could also provide a broader indication of the=20 generalized industry trend, to which one or two companies have = simply=20 failed to follow, YET.

If Group RS is a fundamental part of your = process in=20 picking stocks, I just don't see how you can disregard the group = RS if=20 you have two good stocks in that group.

Tom Worley
stkguru@netside.net
AIM:=20 TexWorley

----- Original Message ----- =
From:=20 Katherine Malm
To: canslim@lists.xmission.com

Sent: Wednesday, = November 28,=20 2001 8:34 AM

Subject: Re: [CANSLIM] = Re:=20 (CANSLIM) Things I Learned

>>If you=20 have two stocks with high RS, this is enough to satisfy the = Group RS.=20 This was news to me, and doesn't make a = lot of=20 sense, either.

Tom, = Chris

I have a=20 slightly different perspective on this one. Often times, = when a=20 group is composed of many members, you'll find that their = business=20 models don't really "match." In this case, I always find the = direct=20 competitors of the stock in question and look at its = performance=20 against just these stocks. If these are moving up in tandem, = it says=20 something. Also, my belief is different than WON's. I am = always=20 looking for *rising* industries, not necessarily *top* = industries. If=20 a particular stock is rising in a group that is not yet a = "top"=20 industry, it is very often the strongest stock in the = group. =20 But, you want to be sure there is some additional confirmation = of the=20 move. WON *does* say that you do not want a lone wolf, you = always want=20 to see at least one additional stock in the "group" moving up = as well.=20 And just to be complete, the stocks should, of course have all = the=20 requisite fundamental characteristics: accelerating sales = &=20 earnings, ROE>=3D17%, cash flow closely mirroring EPS, an = "N", sound=20 financials, and sound strategic planning and = execution.

Katherine

----- Original Message ----- =
From:=20 Tom=20 Worley
To: canslim@lists.xmission.com=20

Sent: Wednesday, = November 28,=20 2001 6:25 AM

Subject: Re: = [CANSLIM] Re:=20 (CANSLIM) Things I Learned

Chris, I would also like to add my = thanks for you=20 spending your time in effort in giving us this report. I = found it=20 informative and well worth reading, as well as some new = material. I=20 have thrown in some comments below.

Tom Worley
stkguru@netside.net
AIM:=20 TexWorley

----- Original Message = - -----
From:=20 Chris=20 Mc
To: canslim@lists.xmission.com=20

Sent: Tuesday, = November 27,=20 2001 7:02 PM

Subject: [CANSLIM] = Re:=20 (CANSLIM) Things I Learned

Well - here goes - I = hope Paul is=20 right!

I recently attended the = IBD=20 Seminar in L.A. and wanted to share a few of my = learnings with=20 you. Please know that I am still in the = learning=20 curve and just starting my second reading of HTMMIS so = this=20 is my understanding of some of the comments = and=20 perhaps you can answer a few questions for me.

Asset allocation=20 - 30-40% in this market, = 3 to 4=20 stocks. WON compared this market to a 75 mph = freeway and=20 it's now at 5 mph - slow and tough. It's down so = much,=20 there's no base and we are gradually coming off the = bottom, but=20 a slow process and sooner or later the momentum will=20 return. Doing what it should be doing. Hit = bottom=20 and turned. Correcting for euphoria similar to the = 1962=20 period which took time to recover because it was damaged = so=20 seriously. Could be 3 - 6 - 9 - 18 months before = we see=20 patterns - coming out of the grave. Patience, and=20 time.

I thought because of = M we=20 shouldn't be in the market at all but I guess if you are = confident in what you're doing, it's o.k. to break a few = rules??=20 It's not so much that you are = breaking=20 rules to be partially invested at this point. While a = switch=20 from bear to bull was only confirmed by the DOW 30 (only = one to=20 gain 20% from the low), "M" has been much stronger since = Sept=20 21. So limited investing is still within CANSLIM = guidelines.=20 That also goes to the other comment of no pyramiding up, = buy it=20 right, but don't add to the position (something I have = been=20 violating in my VR Fund with some success, so personally = don't=20 agree with this point).

Small or large = cap=20 - Doesn't make any difference. Funds = have=20 gotten bigger and bigger, and they have enormous buying = power=20 for big cap stocks as well as small ones. The key = thing is=20 that, is the pattern exactly right, are the earnings = there, the=20 market right, all the other things. AOL was = trading 7=20 Million shares a day, it was a big cap stock and went up = 400-500%. I think the = difference=20 still remains that is is far easier for a small cap to = show=20 20-50% or more earnings growth than for a big cap. But = the big=20 cap gives you more stability and safety in this kind of=20 "M".

Chart=20 discussions of PECS, CYTC, EASI, L3 - straight off the = bottom,=20 no pullback. These are the ones that are risky in = this=20 market environment -they run too far, too fast. = 2=20 out of 3 stocks like this aren't making it. If you = know=20 enough about the company and you're convinced = everythings=20 alright, maybe it'll work.

Bigger cap stocks are a = little=20 bit safer and sounder because if you're wrong, it's = going=20 to cost you more than 1 or 2 points.

Pivot - in=20 this market, buy at the pivot. No pyramiding in = this=20 market. OK to buy within 5% of pivot in a bull=20 market.

Have you heard this = before or=20 is this a "Revision"? I would = say it's=20 a reflection of "M" and the number of failed breakouts. = Take a=20 partial position and manage it. If you bought right, = make a=20 limited amount of money. But if you pyramid, and it then = fails,=20 your follow on buys will wipe out your success from the = first=20 buy.

Charts = - - A lot of=20 the charts don't seem to be working, a lot of the = breakouts=20 seem to be failing. It's not that the charts are = not=20 working, you're buying bad bases that are faulty and = have=20 something wrong with them, they're incorrect = bases.

Handles can be looser = and cups may=20 be deeper coming out of a bear market. Cups and = handles=20 should be porportional - small cup, small handle. = Big cup,=20 longer handle.

If it's not a C&H, = not a double=20 bottom, not a flat base, it's a nothing. After you = go=20 through all the models, it has to fit or it's a=20 nothing. (My den is now wallpapered in Chart=20 Patterns)

There are very few = sound bases -=20 not there yet.  Easy to get sucked in - great = story,=20 great earnings, but we're in a tough market and you = can't play=20 aggressively. AZO is an exception and one of the = few=20 stocks that worked although extended now.

Tom - do you think = the pattern=20 broke on EPIQ and do you see anything that caused it to = break or=20 was it just a function of the market? When you do = the WWW,=20 are you looking at Daily or Weekly charts? Aside from the article in IBD, and the = downgrade=20 by AG Edwards, you can add in that the company has been = moving=20 very fast with two stock splits this year, plus = registering 1.3=20 million restricted shares, plus having options trading, = plus=20 another cash acquisition, plus up several hundred = percent for=20 the year. The two stocks splits are worrying some = investors=20 according to a board I visited on yahoo. Because of the = added=20 liquidity, and likely now the options, short position is = up 13%=20 to 8.3 days. That equates to better than 1.6 million = shares, or=20 21% of the float. Of course, that may have dropped = a lot=20 in the past week. The collapse on 11/21 didn't quite = break the=20 pattern, and we saw a small recovery. But yesterday's = fall,=20 which broke to the bottom of the short base at $30, did = end the=20 breakout pattern and further weaken the chart. I am not = trying=20 to buy just now, and would not be surprised by further = price=20 deterioration, where I will buy because of my belief = long term=20 in the business model.

For WWW, I use Daily = Charts and=20 only look at the latest six months.

Fallen = Angels -=20 There were lots of chart discussions - CSCO, SUNW, ORCL = and it=20 seemed alot of them were similar. No base, thick = overhead=20 supply, no prior uptrend, have probably hit bottom but = are they=20 going to be leaders again?   Sooner or later = they get=20 into a big stalling thing, they just don't do much for 3 = - - 4 - 5=20 months while something else is moving = better.

It seems every = chart I look at=20 has the same pattern. So we wait for a base to = form but=20 while we're waiting, it's gone up 50-100%?? Not that many have gone up that far, = even from=20 their recent lows. And remember many are down as much as = 90%=20 from their high of the past 12-18 months, so even a = double from=20 recent lows still leaves them a very long way to go for = a true=20 new high.

9/11 - = Caused a=20 panic and a bad break in a lot of things and it = explains it=20 but don't make an alibi for the stock and say = it broke=20 20 points but the reason was this, therefore it's = o.k.? Is=20 the pattern right or not?  Don't make = excuses or=20 alibis for stocks.

If you don't have the C = & A,=20 you better have the N & L. (Isn't this = another=20 mortal sin?) M counts for at least 50% of the = whole=20 ballgame.

If you have two stocks = with high=20 RS, this is enough to satisfy the Group RS. This was news to me, and doesn't make a = lot of=20 sense, either.

Lots of revisions in = next edition=20 of HTMMIS - should be out in January. (I = suppose to=20 some extent we learn of revisions as they develop, i.e. = buy=20 within .10 of pivot and not .13 but I think it's = good there=20 are some revisions as conditons change - = ?)

I thought the seminar = was well=20 organized, staff friendly and welcoming. WON spoke = for=20 almost the entire session, except an hour in the AM = and an=20 hour in the PM, had a group constantly surrounding him = and even=20 took questions during lunch. It was such a = terrific=20 opportunity to see and listen to WON and I would = highly=20 recommend the seminar to anyone interested in the = market,=20 although they do call it "Advanced" and you need to have = some=20 understanding of CANSLIM. They did=20 not push IBD or DGO, but merely explained the = services=20 offered and were very accommodating in answering=20 questions.

The seminar was = extremely=20 worthwhile for me but it seems the more I = learn, the=20 more I have to learn. Did anyone else = attend? =20 Comments appreciated.

Chris Mc

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