From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #306 Reply-To: canslim Sender: owner-canslim-digest@lists.xmission.com Errors-To: owner-canslim-digest@lists.xmission.com Precedence: bulk X-No-Archive: yes canslim-digest Friday, June 26 1998 Volume 02 : Number 306 In this issue: Re: [CANSLIM] Tom-Program Buying Re: [CANSLIM] CDWI Re: [CANSLIM] Greg CDWI Re: [CANSLIM] Re: canslim-digest V2 #303 Re: [CANSLIM] Re: canslim-digest V2 #303 Re: [CANSLIM] Todays list of HGS candidates [CANSLIM] Software AG (AGS) Re: [CANSLIM] Re: canslim-digest V2 #303 Re: [CANSLIM] CDWI Re: [CANSLIM] Greg CDWI Re: [CANSLIM] Re: canslim-digest V2 #303 Re: [CANSLIM] Greg CDWI Re: [CANSLIM] Non Canslim off topic Re: [CANSLIM] Greg CDWI Re: [CANSLIM] Stock lists - To Tom Worley Re: [CANSLIM] Greg CDWI Re: [CANSLIM] Greg CDWI Re: [CANSLIM] Greg CDWI Re: [CANSLIM] Greg CDWI ---------------------------------------------------------------------- Date: Fri, 26 Jun 1998 23:14:53 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] Tom-Program Buying I would have to dig back thru several years of weekly reports I used to print off at my last job, but from memory 17-18% of the daily volume being ascribed to program trading was normal. A 20% level would not be considered unusual by me for the past several weeks, esp considering many decent stocks were cheap, both NYSE and NASDAQ were severely oversold, and funds had to be sitting on a potful of cash with the qtr about to end and money continuing to flow in and needing to be put somewhere. The division between domestic and foreign program trading often seemed to be more telling, esp if there was correlation with either a strong (or very weak) domestic mkt or with foreign events (like when the yen crashes). The danger of program trading is that many programs are often set at the same, or nearly the same, "trigger". Thus, when one kicks in, another may not be far behind. They can make or break a rally/recovery, or cause a correction. Tom W - -----Original Message----- From: Tannis Malone To: canslim@lists.xmission.com Date: Friday, June 26, 1998 10:45 PM Subject: [CANSLIM] Tom-Program Buying >Tom, > >There was an article in the WSJ today that reported on the program >buying on the week ending June 12. It was mentioned that ~20% of the >"buying" that week was program buying of undervalued stocks. Things >got a little overzealous, I guess, and trading was stopped a number of >times -typically it seems, midmorning and later afternoon. > >I've been reading this paper for years and have never noticed this >type of report before. > >Is this consistent with what you know? Is 20% program buying high or >low? During that time, I was trying to figure out who the next >leaders would be, are these the people determining who the next >leaders are? How could I have known? > > >_________________________________________________________ >DO YOU YAHOO!? >Get your free @yahoo.com address at http://mail.yahoo.com > > >- > - - ------------------------------ Date: Fri, 26 Jun 1998 20:17:27 -0700 From: Talib Hirji Subject: Re: [CANSLIM] CDWI This question is directed more to Tom and DB on subject stock. Per WON, the purchase on this stock after base breakout(which occured on 06/24/98) would be on 06/25/98, where the price is already extended over 7% or 8% above the breakout point. How then somebody cna get aboard this security ? For TA per Triple Screen, I see on weekly MACD that signal to buy is around 03/06/98, however weekly and daily stoch is in overbought state. The daily Stoch does not give a buy till 04/28/98 when the price has doubled from 03/06/98 MACD signal at a price of 4 7/8. Am I seeing chart right ? Can Both of you help me to learn, how One would approach to buy this stock? Thank You, Talib At 08:17 AM 6/26/98 -0400, you wrote: >Greg, > >Way, way too extended to buy, but would definitely hang on if I >already owned it. Per DGO, 99/99/B/B, exploded out of a long >base/trading range on two days of heavy volume. GRS at 92, no long >term debt, no funds yet reported (altho this could change on their >next qtrly report due in several weeks), and decent management >ownership. Hope you got on board while it was still basing. > >Tom W > >-----Original Message----- >From: SACADS@aol.com >To: canslim@lists.xmission.com >Date: Friday, June 26, 1998 2:53 AM >Subject: [CANSLIM] CDWI > > >>Anyone else watching this Macro hit new highs? EPS 99 RS 99 GS 99. >I'd >>appreciate comments; preferably constructive ones. >> >>Good hunting, >> >>Greg >> >>- >> > > >- > > - - ------------------------------ Date: Fri, 26 Jun 1998 20:23:12 -0700 (PDT) From: dbphoenix Subject: Re: [CANSLIM] Greg CDWI <> OK, Tom. You say you're tired of being called a non-CANSLIMer. Perhaps you'd explain, then, why you're leaving out the 3-year earnings growth record and the "new [or proprietary] product or service" part of N (it is not just a new high and nothing more). Since it is your money, you can leave out as many elements as you like. But don't then be surprised when someone challenges you for doing so. Incidentally, Blockbuster was new. CDWI is not. - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Fri, 26 Jun 1998 23:29:26 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] Re: canslim-digest V2 #303 Gary, I don't have quite the same time restraints as you do, as I leave for work about 8:30 AM, an hour before the mkt opens. Unfortunately, that's still too early to get pre mkt indications on OTC stocks on how they will likely open (live quotes after about 9AM will show you this if you remember where they closed the nite before). My practice is to not enter an order till the morning (vice the night before). Before I enter it, I have checked the tech analysis data on it at BigCharts (which apparently doesn't update till very late at night) so I am using the latest trade data. I have also by then checked the global mkts and watched how futures are trading for several hours, so have a clue to how the mkt will open. Finally, despite WON's dislike for limit orders, I pick the price I believe is correct for entry or exit, and almost always use a limit order. I very rarely will use a mkt order unless I want to be absolutely sure of buying or selling that day on the open. I also have the option with Schwab of either calling them or walking across the street during a break and changing an existing order. I can also call Schwab for live quotes through out the day if need be. Another option you may have with DLJ is to use stop orders. This permits you to enter a buy or sell order that is triggered upon the stock trading at or thru the "stop" price. You can enter these such that if triggered they can become either a limit or a market order. For example, you could use a stop buy for one you think is ready to break out. If it trades at or thru your stop price, you order converts to either a mkt or limit buy (depending on which you entered). Buy (and Sell) stop market orders can be dangerous as a stock can gap up or down big time, and you have no control over pricing. Stops also can be risky for playing breakouts in that you won't have volume confirmation, just price. Other options would include using a broker and giving him specific instructions to buy xyz if it breaks yy price AND trades at least ZZZ shares. You can also lease various pager type devices that will alert you to what's happening, then phone in the order. Keep in mind also that some brokerage firms won't accept stop orders on OTC stocks. Tom W - -----Original Message----- From: H. Gary Kuzia To: canslim@lists.xmission.com Date: Friday, June 26, 1998 10:39 PM Subject: [CANSLIM] Re: canslim-digest V2 #303 >In response to the post, not leaving a buy order in overnight. How do >those of us who do not have the ability to execute a "buy order" after >the market opens. I go to work at 7:00 am. The market opens at 9:30 >am. I use DLJ Direct as my on-line broker. The only way I can affect >the purchase price is to place a specific "buy order" at a certain >price. I have done that on occasion and my order has NOT been filled >because the stock did not reach that price. Any suggestions? > > Gary > >- > - - ------------------------------ Date: Fri, 26 Jun 1998 20:36:14 -0700 (PDT) From: dbphoenix Subject: Re: [CANSLIM] Re: canslim-digest V2 #303 <> When you say the stock didn't reach your price, I assume you placed your order below the ask and the stock didn't pull back enough to reach your price. In any event, one alternative is to place a buy-stop. In other words, tell your broker to buy the stock if it moves up to your price (e.g., breaks out above the previous day's high). If possible, specify the kind of volume you want as well. When doing this, however, it's also a good idea to place your sell-stop as well, in case something goes wrong after you've bought it. (And if you're wondering why you'd want to place your order above the ask, remember that if you place it below, you're wanting the stock to fall in order for you to buy it. But you don't want it to fall, you want it to go up. If you waited too long to buy it, that's something that you have to deal with in your strategy, but to try to pick it up cheaply at this point might be self-defeating. If the stock falls to meet your price, it may just keep right on doing so.) If you can't do any of this, just take care of all of it at lunch. That's generally the time when stocks retreat a bit, and it sure beats placing your order for a fill at the open. Also take note of the market's pattern. Is it pulling back in the morning and rallying in the afternoon or vice-versa? Worth knowing depending on whether you want to buy or sell. - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Fri, 26 Jun 1998 23:19:10 -0500 From: "Thomas A. Moulton" Subject: Re: [CANSLIM] Todays list of HGS candidates Dan, I took your list and ran it through another mindless exercise: I looked at the past 3-5 years of earnings, looked for 15% or more in all Q's with continous increases. There could have been 1 bad quarter, but if I ignored that bad one the slope had to still be up (increasing earnings increases!) I also looked up the IBD numbers: This is a filtered list of a computer generated list, I have no opionion of any of these (other than the numbers on the surface look like good stocks to research!) CSCO 96 94 A DELL 99 98 B MSFT 94 91 A BKE 96 95 C MLT 98 97 C RXSD 98 93 B ATI 99 94 A ERICY 97 87 D RCII 96 85 B THQI 78 97 B DHI 94 85 B QCOM 88 71 B I thought about dropping the A/D of C or D but felt passing the years earnings being good was worth leaving in for further research... I should have noted the float but didn't think of it until I was doing something else... - -- Thomas A. Moulton, W2VY http://www.xanthus.net/w2vy - - ------------------------------ Date: Fri, 26 Jun 1998 23:52:54 EDT From: Subject: [CANSLIM] Software AG (AGS) Anyone follow this one? EPS of 75 RS of 98. A member of the high flying software group. Recently brokeout around 29, was profiled in New America this week.Do not have numbers in front of me but If I recall growth and earnings have been triple digits. This was a new issue about six months ago, it came at 10 and has been straight up since. Comments appreciated. Chris. - - ------------------------------ Date: Fri, 26 Jun 1998 23:58:54 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] Re: canslim-digest V2 #303 db, gotta watch this, two independent posts, and we actually sound like we're agreeing on something? Your comment on also entering a sell stop at the same time is good, just make sure the firm won't effectively enter the sell stop order unless and until the buy stop is executed, otherwise you have an illegal short trade if it drops. If you can't enter it conditional, then better to rely on calling in for quotes till you are sure your buy was done before entering it. I have also seen people badly whipsawed doing this (stock trades up to 34 and the buy stop executed, then plunges to 28 and the sell stop is done, they go home and find out they lost 6 pts in a day trade on a stock they didn't even know they owned, and the stock closed back in the base at 32). Diana (DNA) was a great example of this about 1.5 yrs ago (very volatile, highly manipulated). Tom W - -----Original Message----- From: dbphoenix To: canslim@lists.xmission.com Date: Friday, June 26, 1998 11:30 PM Subject: Re: [CANSLIM] Re: canslim-digest V2 #303 ><those of us who do not have the ability to execute a "buy order" after > > Gary>> > >When you say the stock didn't reach your price, I assume you placed >your order below the ask and the stock didn't pull back enough to >reach your price. In any event, one alternative is to place a >buy-stop. In other words, tell your broker to buy the stock if it >moves up to your price (e.g., breaks out above the previous day's >high). If possible, specify the kind of volume you want as well. >When doing this, however, it's also a good idea to place your >sell-stop as well, in case something goes wrong after you've bought it. > - - ------------------------------ Date: Fri, 26 Jun 1998 21:06:14 -0700 (PDT) From: dbphoenix Subject: Re: [CANSLIM] CDWI <> Tom will undoubtedly give you a different answer since he thinks this is a CS stock and I don't. IMO, it cannot maintain this price. The probabilities are extremely high that it will continue to fall. HOWEVER, let's move past that and look at it as an exercise. You don't buy after the breakout. You buy at the breakout. If you can't buy at the breakout, you buy before the breakout. You buy before the breakout by buying while the stock is still in the base (if it's in a base) but after you've gotten at least some indication that it's going to move soon, such as with the technical indicators you mention. No, this is not the best way. But most people have jobs and can't sit in front of their screens all day like I do. You have to do the best you can. However, when buying this way, you absolutely must place a tight stop below the base in case things go wrong while you're at work. You can always start over the next day or two or whatever. <> You're correct about the MACD signal, but the sto wasn't quite overbought. It was only around 60. And it didn't give a sell signal until the end of April. In any event, if the stock had begun trending, an overbought stochastic would have been irrelevant since stochastics don't apply to trending stocks. The daily MACD doesn't look toppy until April either. By then you've already more than doubled your money, so you can afford to let it pull back a bit and perhaps buy more (the weekly MACD hasn't topped out yet). As far as 4/28 goes, IMO the stock didn't give a buy signal since March until a few days ago when the daily MACD turned up again. You may be wondering if you would have sold in April if you had bought in March. You might have, but it wasn't necessary. The daily MACD and sto were unattractive, but the weekly was still strong. Plus the stock didn't break below its 17d EMA. Granted that would have meant giving it 20% leeway from 10, but if you bought at 4-something, so what? The time to sell would have been the climax run that began the middle of April. Even a novice could see that this was unsustainable, at least in this world. You might then have bought back and sold again during this most recent run, but you could also have just walked away happy and pleased with yourself and looked for better prospects. - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Sat, 27 Jun 1998 00:06:58 -0400 From: "Frank V. Wolynski" Subject: Re: [CANSLIM] Greg CDWI Hi Mary & Greg, CDWI came public in January of 1997. I have read somewhere that institutions won't normally get involved until a couple, or five, years of earnings have been established. I believe even WON discourages new issues, but I can't recall where he starts getting interested. This may account for the lack of institutional sponsorship. It was also most likely considered to be "An Internet" stock. "Yikes, stay away, no earnings" was the chant for 1997. The group did not perform well in 1997, but 98 sure is making up for lost time. However, I disagree totally with the new issue policy of WON and the institutions. I don't think you can have a young upstart that is "kicking butt" out of the earnings gates and hold it back to establish 5 years of the kind of growth that a canslim stock must have to qualify as a canslim. Examples you ask for? Well certainly! CSCO, Cisco Systems as a young pup. MSPG, Mindspring. This isn't meant to "beat the drum" for CDWI. Only you can make the decision to pull the trigger or not. It is intended to place the institutional issue into a different context than the absolute of saying "such and such percentage is held by institutions". If 80% of the institutions are underperforming the S&P500 as WON and IBD like to state, who are we to rest our convictions on their intuitions and insights? To look at it one final way. How long do you think they can answer the following question before they get a bit antsy about their employment future. "How much have we made from the Internet stock rally?" Best Regards, Frank Wolynski At 12:15 PM 6/26/98 -0500, you wrote: >Hello Greg, > >I am following this stock also. A CANSLIMER. Growth rate +43%, 0% debt, >mgmt 24%, but no funds. That disturbs me. It's moving up today. It has >a B timeliness, a leader in the retail-misc./diversified group. It may >be extended at this point. I'm not sure. The 5-day stochastics looks as >though it may be going down. > >Further comments are appreciated. > >Regards, >Mary > > >- > > - - ------------------------------ Date: Fri, 26 Jun 1998 21:15:45 -0700 (PDT) From: dbphoenix Subject: Re: [CANSLIM] Re: canslim-digest V2 #303 <> This is one good reason for using at least a mid-discount broker as opposed to a deep-discount broker. If you must work this way in order to be in the market, it may be worth paying more in commissions in order to get your orders place and filled properly. <> Personally I can't imagine anyone who is unable to get near a computer during the day buying a stock like this, full-service broker or no full-service broker. IMO, this has nothing to do with being aggressive or conservative but with being rational. If an individual can't monitor the market or his stocks during the day and he doesn't want to pay the price of a full-service broker and he's working with something other than play money, then these conditions will have a great deal to do with the choices he makes in investments. In these circumstances, it is even more important to stick with quality issues and reliable chart patterns, not overly-hyped new issues with no earnings and no liquidity. - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Sat, 27 Jun 1998 00:17:40 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] Greg CDWI Better still, I'll throw in the five year earnings and the four latest qtrs. 1993 - .04 1994 - .06 1995 - .09 1996 - .10 1997 - .23 Not great growth till last year, but steady and consistent. Last 4 qtrs - .04, .07, .09, .08 Up percent 0 250 350 167 Sales 2.35 2.43 2.77 3.26 Up percent 110 83 90 112 Seems to meet "C" and "A" by WON's guidelines and criteria. Maybe you're using data from someone other than Wm O'Neill of IBD, HTMMIS, etc. I figure if this data is good enough for him and his institutional clients, then its good enough for me. As for "N", a new high is sufficient (pages 22 - 26), altho new products or services would certainly add greater quality to this stock and this CS element. I have done no due diligence, just looked at the DG chart on it, so don't know if it had any revolutionary product or service (altho adding 3 stores and the franchise rights to 134 more when they are already in 29 states and England sounds a lot like what King Wayne did with BV - he wasn't "new" either, he just bot up all the mom and pops till there was no competition left, and there were no "old" that didn't have the Blockbuster logo on them). Tom W - -----Original Message----- From: dbphoenix To: canslim@lists.xmission.com Date: Friday, June 26, 1998 11:20 PM Subject: Re: [CANSLIM] Greg CDWI >OK, Tom. You say you're tired of being called a non-CANSLIMer. >Perhaps you'd explain, then, why you're leaving out the 3-year >earnings growth record and the "new [or proprietary] product or >service" part of N (it is not just a new high and nothing more). > >Since it is your money, you can leave out as many elements as you >like. But don't then be surprised when someone challenges you for >doing so. > - - ------------------------------ Date: Sat, 27 Jun 1998 00:32:37 -0400 From: "Frank V. Wolynski" Subject: Re: [CANSLIM] Non Canslim off topic At the risk of being thought of as a big "Ursa Major", I too have noticed the currency hits around the globe. Russia and Malaysia seem hopeless. I hope it is containable, I fear it is not. Frank Wolynski At 22:53 6/26/98 -0400, you wrote: >Don't know how many noticed or cared, with all the focus on the yen, >but the S. African rand underwent a major bear raid on the currency >over the past day. Down over 8% despite intervention by TWO of the G7 >partners (US Fed Reserve and Bank of England), and it's not even a G7 >member, or even close. Gives you a clue to how important this may be. >Led to more hedge selling by S. African gold producers as well. Could >be another "hot spot" developing. > >Tom W > > > >- > > - - ------------------------------ Date: Fri, 26 Jun 1998 21:33:18 -0700 (PDT) From: dbphoenix Subject: Re: [CANSLIM] Greg CDWI <> I'm afraid you're Monday-morning-quarterbacking here, Frank. First, it may not have been at all clear when Cisco came public that it would do as well as it has, and there have been many opportunities over the years to buy it. To think otherwise is to fall into that dream trap of Why Didn't I Buy Amgen When It Was $1? Well, we didn't buy Amgen when it was $1 because we didn't know. It took time to separate those that would survive from those that would fail. Remember Employee Benefit Plans? Fifty-Off Stores? Casino Magic? Cascade International? That's what the 3-year earnings record requirement is for, and even then it's often not enough. Second, the earnings and sales requirements are at least in part designed to prevent novices from losing huge amounts of money on companies that may collapse without warning. What does Mindspring have to offer that a dozen other ISPs do not? What's proprietary about it? What's even unusual? A lot of people lost a lot of money on restaurants, biotechs (the first round), specialty retailers, and gambling stocks in their time. A lot of people lost a lot of money on Y2K. And a lot of people are going to lose a lot of money on internet stocks as well. I hope Mary and Greg aren't among them. - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Sat, 27 Jun 1998 00:36:32 -0400 From: "Frank V. Wolynski" Subject: Re: [CANSLIM] Stock lists - To Tom Worley At 08:42 PM 6/25/98 -0400, Tom Worley wrote: ...sniped.... The new report offered by DGO was not there when in beta. Is it similar in format to the other reports such as Highest EPS or RS that were there during beta? Seems I remember the EPS/RS number, Stock name and symbol were the only elements in the report. Also typically how many stocks are listed in the report? I hope these questions are not in the realm of "Off Limits", it would assist others in determining whether DGO has more value at this point. Thanks, Frank Wolynski >forget it, at least for now. Now that I have DGO again, I am also >using their new report on stocks within 5% of their high, with RS and >EPS both over 80 and A/D of C or better, as another source (sorry, >members, tried to get DGO to let me post this list, but can't due >copyright and would violate my agreement with them). But this list is >also useful in that every stock on it at least meets the basics of >CANSLIM requirements, and is poised for a potential breakout. After >that it's a matter of looking at the chart, and all the other CS data. >Part of my enjoyment as a broker was educating and sharing knowledge. >I will resume sharing my lists when I can, I personally dislike not >doing so currently, and will change this as quickly as I can. Don't >know if it will encourage others to do likewise, esp since some >members don't consider any of my picks to be CANSLIM, but that's their >issue. I am always ready to defend my list on CANSLIM criteria. > >Tom W > >-----Original Message----- >From: dbphoenix >To: canslim@lists.xmission.com >Date: Thursday, June 25, 1998 1:52 PM >Subject: Re: [CANSLIM] Stock lists > > >><>our own >>methodology) we in essense are all working together (regardless of >>discipline) >>to increase each other's wealth.>> >> >>Much as I respect your intelligence and your opinion, I must >disagree. >> If given a list or lists by certain working members (such as Tom, >who >>doesn't seem to mind), we are not working together in essence or >>otherwise. Some are working and some are benefiting from the work of >>others. >> >><>good, it >>simply doesn't work. As an example look to our wonderful welfare >>system. >>No >>matter how much training or knowledge you provide the welfare rolls >>continue >>to increase. Maybe some don't want to fish?>> >> >>Maybe not. But if the fish were no longer provided and the >>fisher-to-be were faced with starvation, he'd probably learn to fish >>PDQ. >> >>Your honesty with regard to tools and time is appreciated. However, >>I'm just not the wonderful human being I'd like to be. I'd feel like >>a real chump working so many hours and giving it away for nothing in >>return, even if the something in return were only time spent by >>someone learning how to do it on his own. >> >>--Db >> > > > >- > > - - ------------------------------ Date: Fri, 26 Jun 1998 21:38:01 -0700 (PDT) From: dbphoenix Subject: Re: [CANSLIM] Greg CDWI <> I'm afraid you're Monday-morning-quarterbacking here, Frank. First, it may not have been at all clear when Cisco came public that it would do as well as it has, and there have been many opportunities over the years to buy it. To think otherwise is to fall into that dream trap of Why Didn't I Buy Amgen When It Was $1? Well, we didn't buy Amgen when it was $1 because we didn't know. It took time to separate those that would survive from those that would fail. Remember Employee Benefit Plans? Fifty-Off Stores? Casino Magic? Cascade International? That's what the 3-year earnings record requirement is for, and even then it's often not enough. Second, the earnings and sales requirements are at least in part designed to prevent novices from losing huge amounts of money on companies that may collapse without warning. What does Mindspring have to offer that a dozen other ISPs do not? What's proprietary about it? What's even unusual? A lot of people lost a lot of money on restaurants, biotechs (the first round), specialty retailers, and gambling stocks in their time. A lot of people lost a lot of money on Y2K. And a lot of people are going to lose a lot of money on internet stocks as well. I hope Mary and Greg aren't among them. - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Fri, 26 Jun 1998 21:57:14 -0700 (PDT) From: dbphoenix Subject: Re: [CANSLIM] Greg CDWI <> Since it didn't start trading until January of last year, I'd be interested to know how the "earnings" were calculated. Figuring it retroactively isn't quite the same. <> And, as O'N says, it's not a good idea to pay too much attention to percentage increases or even earnings themselves when they're only pennies. <> I wasn't aware of the fact that he's recommending the stock to his institutional clients. Do you have a copy of the report handy? <> We'll have to disagree here. The kinds of companies O'N gets excited about are not those which have nothing more than earnings and a new high. They are leaders in their industries, and I don't mean relative strength. Intel, Microsoft, Dell, Boeing, MCI, Lucent, and many more like them. Your fascination with microcaps bleeds into your perception of CANSLIM. You're fond of referring to the book when it suits you, but ignoring those elements which are contradictory to your chosen style of investing. You can't sin with impunity six days a week as long as you go to church on Sunday. <> The profit margins in video stores are considerably better than in CD stores. People buy CDs. They both buy and rent videos (which, after the rental period, can be sold as used). CDWI may be the buy of the century. But it's not a CANSLIM stock. - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Sat, 27 Jun 1998 00:59:32 -0400 From: "Frank V. Wolynski" Subject: Re: [CANSLIM] Greg CDWI Correction and update: My reference to the internetness of this particular stock was in error. I had inadvertantly (foolishly) confused it with something else! Here's an interesting tidbit regarding institutional sponsorship from: http://quicken.excite.com/investments/news/story/?story=/news/stories/pr/199 80515/a7966.htm ............. During the first quarter of 1998, the Company was selected as a Blue Chip Enterprise Initiative Company by MassMutual, The U.S. Chamber of Commerce, Nation's Business magazine and First Business, a television news program. ............. Decent Fundamentals: check out at: (or DGO) http://www.rapidresearch.com/datasht.asp?ticker=CDWI This just in from WWW.Quicken.com: MINNEAPOLIS, June 26 (Reuters) - Grow Biz International Inc. said Friday it completed the sale of its Disc Go Round franchise concept to CD Warehouse Inc. (Nasdaq:CDWI) for $7.4 million in cash and assumption of debt. This may help the case for "N", they are acquiring and growing their business. Frank Wolynski At 00:06 6/27/98 -0400, you wrote: >Hi Mary & Greg, > >CDWI came public in January of 1997. I have read somewhere that >institutions won't normally get involved until a couple, or five, years of >earnings have been established. I believe even WON discourages new issues, >but I can't recall where he starts getting interested. > >This may account for the lack of institutional sponsorship. It was also >most likely considered to be "An Internet" stock. "Yikes, stay away, no >earnings" was the chant for 1997. The group did not perform well in 1997, >but 98 sure is making up for lost time. > >However, I disagree totally with the new issue policy of WON and the >institutions. I don't think you can have a young upstart that is "kicking >butt" out of the earnings gates and hold it back to establish 5 years of >the kind of growth that a canslim stock must have to qualify as a canslim. > >Examples you ask for? Well certainly! >CSCO, Cisco Systems as a young pup. >MSPG, Mindspring. > >This isn't meant to "beat the drum" for CDWI. Only you can make the >decision to pull the trigger or not. It is intended to place the >institutional issue into a different context than the absolute of saying >"such and such percentage is held by institutions". > >If 80% of the institutions are underperforming the S&P500 as WON and IBD >like to state, who are we to rest our convictions on their intuitions and >insights? > >To look at it one final way. How long do you think they can answer the >following question before they get a bit antsy about their employment future. >"How much have we made from the Internet stock rally?" > >Best Regards, >Frank Wolynski > > >At 12:15 PM 6/26/98 -0500, you wrote: >>Hello Greg, >> >>I am following this stock also. A CANSLIMER. Growth rate +43%, 0% debt, >>mgmt 24%, but no funds. That disturbs me. It's moving up today. It has >>a B timeliness, a leader in the retail-misc./diversified group. It may >>be extended at this point. I'm not sure. The 5-day stochastics looks as >>though it may be going down. >> >>Further comments are appreciated. >> >>Regards, >>Mary >> >> >>- >> >> > >- > > - - ------------------------------ Date: Sat, 27 Jun 1998 00:53:37 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] Greg CDWI Frank, all I have ever heard WON say on new issues is to not try to buy the IPO, or shortly thereafter. I agree with his reasoning, the "hot issues" go nearly 100% to the institutionals. Thus if you are able to get any shares, it's not likely to be a hot issue. I have had investors with multi-million dollar accts at major wire houses like Merrill and Paine (accts over $6 mil) and if they got 100 shares of a hot issue they (and I) were surprised. What WON does say, and I can validate from years of getting his institutional recommendations, is to wait for 2-3 months after a co goes public before you consider it. Then look at how its done, its pricing base, etc.(the ref is pages 118, 119). From my personal experience, WON usually doesn't recommend a new issue for upwards of 6 months, but have seen him put many on his lists after that. For me personally, I won't touch a new issue for a minimum of one year, this gives them the time to get all their historical financial data in order from when they were still a "sub chapter S" or whatever, and be done with all the pro forma reporting. BTW, for those not familiar with what typically happens on a "hot" new issue with regard to the institutionals (predominantly mutual funds): virtually all the shares are allocated to the funds and some other institutionals. On opening day, the shares are "sold" to them, and they immediately sell them back to the underwriters at whatever the opening premium is over the IPO price they paid. Subsequently, over the next several days or weeks, these same funds will buy back much if not more shares than what they sold. Doesn't matter if they do so higher or lower. Point is, they added to the net asset value of the fund (NAV) with the opening day trade, and then at qtr's end can also show a position in one of the "hot" IPOs of the qtr, thus looking good on two fronts. The underwriters like this because they get to sell the shares initially and make their 3-5%, have another highly successful underwriting which helps attract future business, get the shares back so they have control, get to resell the shares into the aftermarket where demand is heavy and they can often show a same day major trading profit plus making more commission, and know the funds will step back in later in return for the favor and future opportunites like this should support be needed. Legal yes, since the funds are in turn "publicly owned" so this technically qualifies as a "public offering". The ethics and morals are another story. Is the SEC likely to do anything to prevent this symbiotic incestuous relationship? You gotta be kidding! If a licensed broker did exactly the same thing and got caught, he'd be fined tens to hundreds of thousands of dollars, be forced to give back his profits, and either lose his license or have it suspended for a year or more. It wouldn't be "public" in his case. Tom W - -----Original Message----- From: Frank V. Wolynski To: canslim@lists.xmission.com Date: Saturday, June 27, 1998 12:02 AM Subject: Re: [CANSLIM] Greg CDWI >Hi Mary & Greg, > >CDWI came public in January of 1997. I have read somewhere that >institutions won't normally get involved until a couple, or five, years of >earnings have been established. I believe even WON discourages new issues, >but I can't recall where he starts getting interested. > >This may account for the lack of institutional sponsorship. It was also >most likely considered to be "An Internet" stock. "Yikes, stay away, no >earnings" was the chant for 1997. The group did not perform well in 1997, >but 98 sure is making up for lost time. > >However, I disagree totally with the new issue policy of WON and the >institutions. I don't think you can have a young upstart that is "kicking >butt" out of the earnings gates and hold it back to establish 5 years of >the kind of growth that a canslim stock must have to qualify as a canslim. > - - ------------------------------ End of canslim-digest V2 #306 ***************************** 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.