From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #3077 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, December 5 2002 Volume 02 : Number 3077 In this issue: RE: [CANSLIM] Fundamental Philosophies RE: [CANSLIM] Fundamental Philosophies ---------------------------------------------------------------------- Date: Thu, 5 Dec 2002 22:39:32 -0600 From: "Fred Richards" Subject: RE: [CANSLIM] Fundamental Philosophies This is a multi-part message in MIME format. - ------=_NextPart_000_001C_01C29CAF.2E3302A0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: 8bit Curt, After some 40 years in this business, I believe that one of the guidelines my mentor pounded into my head is still applicable. "You get what you pay for in this business." Fred -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Curt Corley Sent: Thursday, December 05, 2002 9:22 PM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] Fundamental Philosophies Fred, I was just joking about the online service. Maybe I should have put a “;)” after that statement, instead of a “:).” I agree with the idea that the cost is not very significant if you are able to make significantly more than $500 using DGO and IBD – especially if you are unable to make that amount without DGO. However, that could very well strengthen the argument in favor of lower cost, because (1) there are quite a few people out there who are not in your position and who don’t have the starting capital and/or skills to make a significant amount over $500, and (2) there are quite a few people out there who can make significant money without the service. ;) Curt -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com] On Behalf Of Fred Richards Sent: Thursday, December 05, 2002 8:36 PM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] Fundamental Philosophies And just how much will you charge? Have you given any consideration to the costs involved? Or how many people might sign up for another stock rating service? It is always great to leverage off other people's work but unless you can make a profit after all the costs both known and unknown are caculated, don't make the number 1 mistake of most entrepreneurs . . . failing to consider the cost of one's time. Since I make a few more dollars than $500 using the DGO and IBD, the cost is only material to those who don't. -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Curt Corley Sent: Thursday, December 05, 2002 8:15 PM To: canslim@lists.xmission.com Subject: [CANSLIM] Fundamental Philosophies Hi, I hope you don’t mind me changing the subject name of this thread to something a little more appropriate than NXTL and SXT. To answer your question: Yes, I would certainly consider purchasing a stock if the ROE was less than 16.5% with all other factors looking good. As you know, I’ve purchased PECS and MNTR recently -- two stocks that were a lot less perfect than the theoretical stock you mentioned. I get your point, and you are right: an ROE below 17% certainly does not mean the company or the stock is bad. But here’s a situation to consider. Let’s say you have screened 9,100+ stocks, and came up with a dozen or so stocks that have what you consider to be near-perfect fundamentals. And let’s say a few of those look like they might break out of a base formation within the next couple of weeks. Would you rather wait around for the possibility that those stocks with the best fundamentals will break out? Or would rather purchase stocks that have already broken out but which have less stellar fundamentals? Within a very short time after purchasing PECS and MNTR, I saw other stocks with better fundamentals that looked like they were ready to make a move. Of course, that’s a tough thing to watch, and that’s why I put some thought into this question. Given my situation and my personality, I decided I would rather keep my eye on only the very best ones. That’s why I decided last weekend to screen only the near-perfect ones and keep an eye on those. And now you, Andy, and Tom are starting to make me doubt that decision. Thanks a lot! :) Seriously now: this has been a very educational and interesting thread. Hopefully, by the time we are through with this, we will have figured out the best overall stock-picking system; then we can start an on-line rating system and screening service that doesn’t cost $500 a year. :) Curt P.S. – I would like to open a topic up some time in the future about the use of earnings estimates. But this topic is enough for now. My laptop is over-heating. I’m coming into work tired. And my wife is starting to forget my middle name. -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com] On Behalf Of kmalm Sent: Thursday, December 05, 2002 11:44 AM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] NXTL, SXT Hi Curt, I think you've identified the stickier issues in CANSLIM and interpreting WON's work. As both Tom and Andy have pointed out in their posts, while WON may *seem* to be stating that ROE>=17 is a "minimum requirement' it turns out it is a guidepost to lead you to better quality stocks. As with other indicators, this is based on his historical view of winning stocks, meaning that "on average" winning stocks had an ROE>=17. As with D/E, ROE can be misleading. For example, if a company rejiggers their capital structure and increases their outstanding shares, this will have an immediate impact on the ROE measure. Another way of viewing it would simply be by asking a question. That is, if you were looking at a stock and it had a "perfect" cup with handle (ok, it's theoretical!); high RS Rank; an RS line making new highs; met all other earnings, sales and profit margin guidelines, and broke out on 150% of ADV, would you pass it up because it had an ROE of 16.5%? If so, why? Does the "low" ROE mean that it is not a good company or a good stock? Katherine - ------=_NextPart_000_001C_01C29CAF.2E3302A0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Curt,
 
After=20 some 40 years in this business, I believe that one of the guidelines my = mentor=20 pounded into my head is still applicable.
 
"You=20 get what you pay for in this business."
 
Fred
-----Original Message-----
From:=20 owner-canslim@lists.xmission.com=20 [mailto:owner-canslim@lists.xmission.com]On Behalf Of Curt=20 Corley
Sent: Thursday, December 05, 2002 9:22 = PM
To:=20 canslim@lists.xmission.com
Subject: RE: [CANSLIM] = Fundamental=20 Philosophies

Fred,

 

I was just = joking=20 about the online service.  = Maybe I=20 should have put a =93;)=94 after that statement, instead of a = =93:).=94  =

 

I agree = with the idea=20 that the cost is not very significant if you are able to make = significantly=20 more than $500 using DGO and IBD =96 especially if you are unable to = make that=20 amount without DGO.  = However, that=20 could very well strengthen the argument in favor of lower cost, = because (1)=20 there are quite a few people out there who are not in your position = and who=20 don=92t have the starting capital and/or skills to make a significant = amount=20 over $500, and (2) there are quite a few people out there who can make = significant money without the service. =20 ;)

 

Curt

 

-----Original=20 Message-----
From:=20 owner-canslim@lists.xmission.com = [mailto:owner-canslim@lists.xmission.com]=20 On Behalf Of Fred=20 Richards
Sent:=20 Thursday, December=20 05, 2002 = 8:36=20 PM
To:=20 canslim@lists.xmission.com
Subject: RE: [CANSLIM] = Fundamental=20 Philosophies

 

And just=20 how much will you charge?  Have you given any consideration to = the costs=20 involved?  Or how many people might sign up for another stock = rating=20 service?

 

It is=20 always great to leverage off other people's work but unless you can = make a=20 profit after all the costs both known and unknown are caculated, = don't =20 make the number 1 mistake of most entrepreneurs . . . failing to = consider the=20 cost of one's time.

 

Since I=20 make a few more dollars than $500 using the DGO and IBD, the cost is = only=20 material to those who don't.

-----Original=20 Message-----
From:=20 owner-canslim@lists.xmission.com=20 [mailto:owner-canslim@lists.xmission.com]On Behalf Of Curt = Corley
Sent: Thursday, December 05, = 2002 8:15=20 PM
To:=20 canslim@lists.xmission.com
Subject: [CANSLIM] = Fundamental=20 Philosophies

Hi,

 

I hope=20 you don=92t mind me changing the subject name of this thread to = something a=20 little more appropriate than NXTL and SXT. =

 

To=20 answer your question:  = Yes, I=20 would certainly consider purchasing a stock if the ROE was less than = 16.5%=20 with all other factors looking good. =20 As you know, I=92ve purchased = PECS and MNTR = recently=20 -- two stocks that were a lot less perfect than the theoretical = stock you=20 mentioned.  I get your = point,=20 and you are right:  an = ROE below=20 17% certainly does not mean the company or the stock is bad.  But here=92s a situation = to=20 consider.  Let=92s say = you have=20 screened 9,100+ stocks, and came up with a dozen or so stocks that = have what=20 you consider to be near-perfect fundamentals.  And let=92s say a few of = those look=20 like they might break out of a base formation within the next couple = of=20 weeks.  Would you = rather wait=20 around for the possibility that those stocks with the best = fundamentals will=20 break out?  Or would = rather=20 purchase stocks that have already broken out but which have less = stellar=20 fundamentals?  Within = a very=20 short time after purchasing PECS and = MNTR, I saw=20 other stocks with better fundamentals that looked like they were = ready to=20 make a move.  Of = course, that=92s=20 a tough thing to watch, and that=92s why I put some thought into = this=20 question.  Given my = situation=20 and my personality, I decided I would rather keep my eye on only the = very=20 best ones.  That=92s = why I decided=20 last weekend to screen only the near-perfect ones and keep an eye on = those.  And now you, = Andy, and=20 Tom are starting to make me doubt that decision.  Thanks a lot!  = :)

 

Seriously = now:  this has been a very = educational and=20 interesting thread.  = Hopefully,=20 by the time we are through with this, we will have figured out the = best=20 overall stock-picking system; then we can start an on-line rating = system and=20 screening service that doesn=92t cost $500 a year.  = :)

 

Curt

 

P.S. =96=20 I would like to open a topic up some time in the future about the = use of=20 earnings estimates.  = But this=20 topic is enough for now.  = My=20 laptop is over-heating.  = I=92m=20 coming into work tired.  = And my=20 wife is starting to forget my middle = name.

 

-----Original=20 Message-----
From:=20 owner-canslim@lists.xmission.com = [mailto:owner-canslim@lists.xmission.com]=20 On Behalf Of = kmalm
Sent: Thursday, December = 05,=20 2002 = 11:44=20 AM
To:=20 canslim@lists.xmission.com
Subject: RE: [CANSLIM] NXTL,=20 SXT

 

Hi=20 Curt,

 

I think you've identified = the stickier=20 issues in CANSLIM and interpreting WON's work. As both Tom and Andy = have=20 pointed out in their posts, while WON may *seem* to be stating that=20 ROE>=3D17 is a "minimum requirement' it turns out it is a = guidepost to lead=20 you to better quality stocks. As with other indicators, this is = based on his=20 historical view of winning stocks, meaning that "on average" winning = stocks=20 had an ROE>=3D17. As with D/E, ROE can be misleading. For = example, if a=20 company rejiggers their capital structure and increases their = outstanding=20 shares, this will have an immediate impact on the ROE measure. = Another way=20 of viewing it would simply be by asking a question. That is, if you = were=20 looking at a stock and it had a "perfect" cup with handle (ok, it's=20 theoretical!); high RS Rank; an RS line making new highs; met all = other=20 earnings, sales and profit margin guidelines, and broke out on 150% = of ADV,=20 would you pass it up because it had an ROE of 16.5%? If so, why? = Does the=20 "low" ROE mean that it is not a good company or a good=20 stock?

 

Katherine

 

= - ------=_NextPart_000_001C_01C29CAF.2E3302A0-- - - - -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, 5 Dec 2002 22:46:16 -0600 From: "Curt Corley" Subject: RE: [CANSLIM] Fundamental Philosophies This is a multi-part message in MIME format. - ------=_NextPart_000_000A_01C29CB0.1F9809B0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable In that case, you may want to consider subscribing to ValueLine. You have to pay a lot more than $500 per year for that, so your returns should be a lot better than using DGO. =20 Curt =20 - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com] On Behalf Of Fred Richards Sent: Thursday, December 05, 2002 10:40 PM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] Fundamental Philosophies =20 Curt, =20 After some 40 years in this business, I believe that one of the guidelines my mentor pounded into my head is still applicable. =20 "You get what you pay for in this business." =20 Fred - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Curt Corley Sent: Thursday, December 05, 2002 9:22 PM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] Fundamental Philosophies Fred, =20 I was just joking about the online service. Maybe I should have put a =93;)=94 after that statement, instead of a =93:).=94 =20 =20 I agree with the idea that the cost is not very significant if you are able to make significantly more than $500 using DGO and IBD =96 = especially if you are unable to make that amount without DGO. However, that could very well strengthen the argument in favor of lower cost, because (1) there are quite a few people out there who are not in your position and who don=92t have the starting capital and/or skills to make a = significant amount over $500, and (2) there are quite a few people out there who can make significant money without the service. ;) =20 Curt =20 - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com] On Behalf Of Fred Richards Sent: Thursday, December 05, 2002 8:36 PM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] Fundamental Philosophies =20 And just how much will you charge? Have you given any consideration to the costs involved? Or how many people might sign up for another stock rating service? =20 It is always great to leverage off other people's work but unless you can make a profit after all the costs both known and unknown are caculated, don't make the number 1 mistake of most entrepreneurs . . . failing to consider the cost of one's time. =20 Since I make a few more dollars than $500 using the DGO and IBD, the cost is only material to those who don't. - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Curt Corley Sent: Thursday, December 05, 2002 8:15 PM To: canslim@lists.xmission.com Subject: [CANSLIM] Fundamental Philosophies Hi, =20 I hope you don=92t mind me changing the subject name of this thread to something a little more appropriate than NXTL and SXT.=20 =20 To answer your question: Yes, I would certainly consider purchasing a stock if the ROE was less than 16.5% with all other factors looking good. As you know, I=92ve purchased PECS and MNTR recently -- two = stocks that were a lot less perfect than the theoretical stock you mentioned. I get your point, and you are right: an ROE below 17% certainly does not mean the company or the stock is bad. But here=92s a situation to consider. Let=92s say you have screened 9,100+ stocks, and came up with = a dozen or so stocks that have what you consider to be near-perfect fundamentals. And let=92s say a few of those look like they might break out of a base formation within the next couple of weeks. Would you rather wait around for the possibility that those stocks with the best fundamentals will break out? Or would rather purchase stocks that have already broken out but which have less stellar fundamentals? Within a very short time after purchasing PECS and MNTR, I saw other stocks with better fundamentals that looked like they were ready to make a move. Of course, that=92s a tough thing to watch, and that=92s why I put some = thought into this question. Given my situation and my personality, I decided I would rather keep my eye on only the very best ones. That=92s why I decided last weekend to screen only the near-perfect ones and keep an eye on those. And now you, Andy, and Tom are starting to make me doubt that decision. Thanks a lot! :) =20 Seriously now: this has been a very educational and interesting thread. Hopefully, by the time we are through with this, we will have figured out the best overall stock-picking system; then we can start an on-line rating system and screening service that doesn=92t cost $500 a year. :) =20 Curt =20 P.S. =96 I would like to open a topic up some time in the future about = the use of earnings estimates. But this topic is enough for now. My laptop is over-heating. I=92m coming into work tired. And my wife is starting to forget my middle name. =20 - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com] On Behalf Of kmalm Sent: Thursday, December 05, 2002 11:44 AM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] NXTL, SXT =20 Hi Curt, =20 I think you've identified the stickier issues in CANSLIM and interpreting WON's work. As both Tom and Andy have pointed out in their posts, while WON may *seem* to be stating that ROE>=3D17 is a "minimum requirement' it turns out it is a guidepost to lead you to better quality stocks. As with other indicators, this is based on his historical view of winning stocks, meaning that "on average" winning stocks had an ROE>=3D17. As with D/E, ROE can be misleading. For = example, if a company rejiggers their capital structure and increases their outstanding shares, this will have an immediate impact on the ROE measure. Another way of viewing it would simply be by asking a question. That is, if you were looking at a stock and it had a "perfect" cup with handle (ok, it's theoretical!); high RS Rank; an RS line making new highs; met all other earnings, sales and profit margin guidelines, and broke out on 150% of ADV, would you pass it up because it had an ROE of 16.5%? If so, why? Does the "low" ROE mean that it is not a good company or a good stock? =20 Katherine =20 - ------=_NextPart_000_000A_01C29CB0.1F9809B0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable

In that case, you may want to = consider subscribing to ValueLine.=A0 You = have to pay a lot more than $500 per year for that, so your returns should be a = lot better than using DGO.

 

Curt

 

-----Original = Message-----
From: = owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com] On Behalf Of Fred Richards
Sent: = Thursday, December 05, = 2002 10:40 PM
To: = canslim@lists.xmission.com
Subject: RE: [CANSLIM] = Fundamental Philosophies

 

Curt,

 

After some 40 = years in this business, I believe that one of the guidelines my mentor pounded = into my head is still applicable.

 

"You get = what you pay for in this business."

 

Fred

-----Original Message-----
From: owner-canslim@lists.xmission.com = [mailto:owner-canslim@lists.xmission.com]On Behalf Of Curt Corley
Sent: = Thursday, December 05, = 2002 9:22 PM
To: = canslim@lists.xmission.com
Subject: RE: [CANSLIM] = Fundamental Philosophies

Fred,<= /span>

 =

I was just = joking about the online service.=A0 Maybe I = should have put a “;)” after that statement, instead of a “:).”=A0 =

 =

I agree with the = idea that the cost is not very significant if you are able to make = significantly more than $500 using DGO and IBD – especially if you are unable to = make that amount without DGO.=A0 = However, that could very well strengthen the argument in favor of lower cost, because = (1) there are quite a few people out there who are not in your position and = who don’t have the starting capital and/or skills to make a = significant amount over $500, and (2) there are quite a few people out there who can = make significant money without the service.=A0 ;)

 =

Curt

 =

-----Original = Message-----
From: owner-canslim@lists.xmission.com = [mailto:owner-canslim@lists.xmission.com] On Behalf Of Fred Richards
Sent: = Thursday, December 05, = 2002 8:36 PM
To: = canslim@lists.xmission.com
Subject: RE: [CANSLIM] = Fundamental Philosophies

 

And just how much will you charge?  Have you given any consideration to the = costs involved?  Or how many people might sign up for another stock = rating service?

 

It is always great to leverage off other people's work but unless you can make = a profit after all the costs both known and unknown are caculated, = don't  make the number 1 mistake of most entrepreneurs . . . failing to = consider the cost of one's time.

 

Since I make a few more dollars than $500 using the DGO and IBD, the cost is = only material to those who don't.

-----Original Message-----
From: owner-canslim@lists.xmission.com = [mailto:owner-canslim@lists.xmission.com]On Behalf Of Curt Corley
Sent: = Thursday, December 05, = 2002 8:15 PM
To: = canslim@lists.xmission.com
Subject: [CANSLIM] = Fundamental Philosophies

Hi,

 =

I hope you don’t mind me changing the subject name of this thread to = something a little more appropriate than NXTL and SXT.

 =

To answer your question:=A0 Yes, I would = certainly consider purchasing a stock if the ROE was less than 16.5% with all = other factors looking good.=A0 As you = know, I’ve purchased PECS and MNTR recently -- two stocks that were a lot less perfect than the = theoretical stock you mentioned.=A0 I get = your point, and you are right:=A0 an ROE = below 17% certainly does not mean the company or the stock is bad.=A0 But here’s a situation to consider.=A0 Let’s say you = have screened 9,100+ stocks, and came up with a dozen or so stocks that have = what you consider to be near-perfect fundamentals.=A0 And let’s say a few of those look like they might break out = of a base formation within the next couple of weeks.=A0 Would you rather wait around for the possibility that those = stocks with the best fundamentals will break out?=A0 Or would rather purchase stocks that have already broken out but which have = less stellar fundamentals?=A0 Within = a very short time after purchasing PECS and MNTR, I saw other stocks with better fundamentals that looked like they = were ready to make a move.=A0 Of = course, that’s a tough thing to watch, and that’s why I put some = thought into this question.=A0 Given my = situation and my personality, I decided I would rather keep my eye on only the = very best ones.=A0 That’s why I = decided last weekend to screen only the near-perfect ones and keep an eye on = those.=A0 And now you, Andy, and Tom are = starting to make me doubt that decision.=A0 = Thanks a lot!=A0 = :)

 =

Seriously now:=A0 this has been a very = educational and interesting thread.=A0 = Hopefully, by the time we are through with this, we will have figured out the best = overall stock-picking system; then we can start an on-line rating system and = screening service that doesn’t cost $500 a year.=A0 :)

 =

Curt

 =

P.S. – I would like to open a topic up some time in the future about = the use of earnings estimates.=A0 But = this topic is enough for now.=A0 My laptop is over-heating.=A0 I’m = coming into work tired.=A0 And my wife is = starting to forget my middle name.

 =

-----Original = Message-----
From: owner-canslim@lists.xmission.com = [mailto:owner-canslim@lists.xmission.com] On Behalf Of kmalm
Sent: = Thursday, December 05, = 2002 11:44 AM
To: = canslim@lists.xmission.com
Subject: RE: [CANSLIM] = NXTL, SXT

 

Hi Curt,

 

I think you've identified the stickier issues = in CANSLIM and interpreting WON's work. As both Tom and Andy have pointed = out in their posts, while WON may *seem* to be stating that ROE>=3D17 is a "minimum requirement' it turns out it is a guidepost to lead you to = better quality stocks. As with other indicators, this is based on his = historical view of winning stocks, meaning that "on average" winning stocks = had an ROE>=3D17. As with D/E, ROE can be misleading. For example, if a = company rejiggers their capital structure and increases their outstanding = shares, this will have an immediate impact on the ROE measure. Another way of viewing = it would simply be by asking a question. That is, if you were looking at a = stock and it had a "perfect" cup with handle (ok, it's = theoretical!); high RS Rank; an RS line making new highs; met all other earnings, sales and = profit margin guidelines, and broke out on 150% of ADV, would you pass it up = because it had an ROE of 16.5%? If so, why? Does the "low" ROE mean = that it is not a good company or a good stock?

 

Katherine

 

- ------=_NextPart_000_000A_01C29CB0.1F9809B0-- - - - -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 #3077 ****************************** 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.