From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #3412 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 Friday, July 11 2003 Volume 02 : Number 3412 In this issue: Re: [CANSLIM] views on WEBX Re: [CANSLIM] Intro: Hong Hsu Re: [CANSLIM] Second Guessing Myself - SFCC Re: [CANSLIM] Opinions about cwhcharts.com (now breakoutwatch.com) [CANSLIM] ANN at 8% loss Re: [CANSLIM] Break outs or pullbacks Re: Re: [CANSLIM] Break outs or pullbacks Re: [CANSLIM] Break outs or pullbacks Re: [CANSLIM] Break outs or pullbacks RE: [CANSLIM] Re. ROE Re: [CANSLIM] Break outs or pullbacks Re: [CANSLIM] Break outs or pullbacks Re: [CANSLIM] Break outs or pullbacks Re: Re: [CANSLIM] Break outs or pullbacks ---------------------------------------------------------------------- Date: Thu, 10 Jul 2003 20:06:21 -0700 (PDT) From: Tomas Subject: Re: [CANSLIM] views on WEBX Erik, Like you said, the fundies look very strong. They do have a great product. My company recently started using WebEX, and it is a great product. A great stock to keep an eye on for a good base and BO if not currently owned. If you have it already, not sure. It looks like it is trying to form a CwH. Currently on the right cup. The problem is you don't know how long it will take to BO. If you have a GREAT candidate about to BO, and no money to invest, then maybe think about selling it. Otherwise, I do not see any reason to sell it now. Hmmm, I feel like I am giving out stock advices that I should not. Just my $.02, tomas - --- Erik Harris wrote: > I'm looking for any comments on WEBX. I own the > stock and am trying to > decided what to do with it. > From my perspective it seems to have good fundies, > increasing year-over-year > eps, good roi/e etc. > The chart doesn't say anything to me at this point. > Recent cup with a > pullback today in the bad market. > They have a good product concept and are the leader > in their market > (high-end web meetings and presentations, training). > > Earnings out in just over a week. > > Any reason for me to sell? It seems like a decent > company provided they > don't miss earnings. Am I missing anything? > > Thanks for any comments, > Erik > > > > - > -To subscribe/unsubscribe, email > "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. __________________________________ Do you Yahoo!? SBC Yahoo! DSL - Now only $29.95 per month! http://sbc.yahoo.com - - - -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, 10 Jul 2003 20:07:14 -0700 (PDT) From: Tomas Subject: Re: [CANSLIM] Intro: Hong Hsu Welcome Hong. You will learn a lot from this group. tomas - --- Hong Hsu wrote: > Hi, > > My name is Hong Hsu. I work for telecom company > and write software for > living. Several months ago I completed Mr. O'Neil's > book. I am > learning CANSLIM now. > > See you soon, > -Hong > in Maryland > > > > - > -To subscribe/unsubscribe, email > "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. __________________________________ Do you Yahoo!? SBC Yahoo! DSL - Now only $29.95 per month! http://sbc.yahoo.com - - - -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, 10 Jul 2003 21:57:18 -0400 From: Hong Hsu Subject: Re: [CANSLIM] Second Guessing Myself - SFCC - --------------080401050708020003050605 Content-Type: text/plain; charset=us-ascii; format=flowed Content-Transfer-Encoding: 7bit Thanks Katherine. It helps a lot. -Hong Katherine Malm wrote: >Hello Hong, > >Welcome to the group! > >Until a few days ago, the very best place to get information on direct >competitors was to use the free capsules at Hoovers.com. They recently >modified their site and service offering and have taken the direct >competitor info under wraps. Darn. Their response when I asked about it a >few weeks ago was that they felt they needed to create the most value for >their subscribers so had decided to discontinue making it available to the >general public. Hard to argue with that one. > >But...not to fear.... I'm always on the lookout for ways to get this info, >so, happily, I have found another source at Yahoo's newly revamped (still in >beta) finance site. See an example at: > >http://beta.finance.yahoo.com/q/co?s=MNTR > >You will find many industry listings throughout the web that will list >"industry brethren", but this isn't the same as identifying "direct >competitors" as this does. > >Another good source for listings of "similar" businesses is BullSector, >where you can enter a symbol and see companies with similar >products/services: > >http://www.bullsector.com/search.html > >The all time best place to look is at the company website and/or their SEC >filings. These are always filled with information on competitors, but it >takes quite a bit more digging. > >Katherine > > > >-----Original Message----- >From: owner-canslim@lists.xmission.com >[mailto:owner-canslim@lists.xmission.com]On Behalf Of Hong Hsu >Sent: Thursday, July 10, 2003 3:11 PM >To: canslim@lists.xmission.com >Subject: Re: [CANSLIM] Second Guessing Myself - SFCC > > > > >>I determine who the company's >>direct competitors are and take a look at their charts. >> >> > > > >Katherine, > > I am newer to the group. and am wondering how do you determine a >given company's direct competitors. For an example, RDWR. > > Your comments will be appreciated, > -Hong > > > >- >-To subscribe/unsubscribe, email "majordomo@xmission.com" >-In the email body, write "subscribe canslim" or >-"unsubscribe canslim". Do not use quotes in your email. > > > >- >-To subscribe/unsubscribe, email "majordomo@xmission.com" >-In the email body, write "subscribe canslim" or >-"unsubscribe canslim". Do not use quotes in your email. > > > - -- < As a computer I find your faith in technology amusing. - --------------080401050708020003050605 Content-Type: text/html; charset=us-ascii Content-Transfer-Encoding: 7bit      Thanks Katherine.   It helps a lot.

     -Hong


Katherine Malm wrote:
Hello Hong,

Welcome to the group!

Until a few days ago, the very best place to get information on direct
competitors was to use the free capsules at Hoovers.com. They recently
modified their site and service offering and have taken the direct
competitor info under wraps. Darn. Their response when I asked about it a
few weeks ago was that they felt they needed to create the most value for
their subscribers so had decided to discontinue making it available to the
general public. Hard to argue with that one.

But...not to fear.... I'm always on the lookout for ways to get this info,
so, happily, I have found another source at Yahoo's newly revamped (still in
beta) finance site. See an example at:

http://beta.finance.yahoo.com/q/co?s=MNTR

You will find many industry listings throughout the web that will list
"industry brethren", but this isn't the same as identifying "direct
competitors" as this does.

Another good source for listings of "similar" businesses is BullSector,
where you can enter a symbol and see companies with similar
products/services:

http://www.bullsector.com/search.html

The all time best place to look is at the company website and/or their SEC
filings. These are always filled with information on competitors, but it
takes quite a bit more digging.

Katherine



- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Hong Hsu
Sent: Thursday, July 10, 2003 3:11 PM
To: canslim@lists.xmission.com
Subject: Re: [CANSLIM] Second Guessing Myself - SFCC


  
I determine who the company's
direct competitors are and take a look at their charts.
    



Katherine,

    I am newer to the group. and am wondering how do you determine a
given company's direct competitors.    For an example,  RDWR.

   Your comments will be appreciated,
   -Hong



- -
- -To subscribe/unsubscribe, email "majordomo@xmission.com"
- -In the email body, write "subscribe canslim" or
- -"unsubscribe canslim".  Do not use quotes in your email.



- -
- -To subscribe/unsubscribe, email "majordomo@xmission.com"
- -In the email body, write "subscribe canslim" or
- -"unsubscribe canslim".  Do not use quotes in your email.

  

-- 
 <Linux kernel:>< As a computer I find your faith in technology amusing.

- --------------080401050708020003050605-- - - - -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, 10 Jul 2003 23:36:59 -0400 From: "Pritish Shah" Subject: Re: [CANSLIM] Opinions about cwhcharts.com (now breakoutwatch.com) Hong, Breakoutwatch.com will send you email alerts when the stock breaks out. = For FWHT, I remember buying it at around 16.70 early in the morning as = soon as I got the alert. They wait to confirm (via linear extrapolation) whether a stock is going = to have proper volume during breakouts.=20 If you buy their premium service, you can filter the alerts based upon = your criteria. Thanks, Pritish >>> honghsu@bellatlantic.net 07/10/03 17:45 PM >>> Kelly, Thanks for sharing info. A couple of additional questions. For=20 email alert, did cwhcharts.com send you an email right before a BO, or=20 right after. For instance, when FWHT BO on 6/18, did you get in at=20 $16 sharply? =20 Also will cwhcharts.com allows you to set up earnings estimates for = your=20 criteria? As I notice that the ESPD's earnings estimates is only 7.6%=20 for 6/03 and minus something in 9/03. Your comments will be appreciated, - -Hong =20 - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. - - - -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, 10 Jul 2003 23:55:13 -0700 From: "John Calkins" Subject: [CANSLIM] ANN at 8% loss Hi CANSLIMers, I bought ANN on Tuesday - breakout day - and today it pulled back below its pivot on higher volume than its breakout day. In looking at at the intraday trading, there was a huge volume/price move early in the day then the stock was quiet the rest of the day. I watched closely during the day for a price swing at the end of the day so as not to jump the gun on selling. I saw the price creep up a little at the end of the day so I held. I have herd not to sell on first day intra-day movement but to watch the following day for continued movement. I almost pulled the plug anyway. Would it be wise to concider to sell Friday if the price does not rebound on volume during the day? This is the hardest part for me. I will of coarse sell if it drops to my mental 8% stop. I do not like the stock anymore because it did not move as I anticipated. I would have understood a drop on low volume, but this high volume drop gets my attention every time. This is the part that is so dissapointing. You spend weeks making a profit on one stock, then the next two drop like a rock. My selling at 7-8 % are engrained now. With the entry within a couple of percent of the pivot, at least I get a second day of watching before I pull the plug. The last stock I dropped was JOYG but that was clear to me on the volume and I got out even including my commistions. This down day on lower volume in the market has me holding off a bit. When I bought ANSS, a few days later the price moved down and "kissed the pivot" as Katherine says and it volume is predictible and still is. So I guess my question is would you sell ANN because of yesterdays price/volume action or give it a second chance? JC - - - -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, 10 Jul 2003 23:39:01 -0400 From: "Pritish Shah" Subject: Re: [CANSLIM] Break outs or pullbacks I believe David says sell half at 5% and the other half at 10% loss = (average of 7 to 8%). David also says that he generally does not even = waith for it to fall to 5% before selling the stock.=20 Pritish >>> m.lucero@verizon.net 07/10/03 17:38 PM >>> At a William O'Neil seminar, David Ryan said you should sell at least half if a stock falls below it's pivot. - ----- Original Message -----=20 From: "Bill Triffet" To: Sent: Thursday, July 10, 2003 8:57 AM Subject: Re: [CANSLIM] Break outs or pullbacks Mike, I started out this "trading season" strictly buying breakouts. I've since started keeping equal watch on pullbacks on recent breakouts for second chance entries provided the volume is light. My reasoning is that in recent buys SHFL, AMHC, ADVP, to name a few, they broke out nicely. They quickly gained steam within a matter of a week or two. Problem was - they all started breaking down. It was not on huge = volume but I didn't want to see my profits turn into losses. My stop-losses were set perhaps too tight so they all sold off. Looking back, offered = secondary entry points. I blame this short sightedness on my technique to several years of bear rallies with quick 10-12% gains that fell back down equally = as fast. It's tough to watch an issue shoot up 12% then fall back to my buy point. I've since made a mental pact with myself (g) to allow them to fall right back to the base for the first few weeks - regardless of it being 10-20% = in the first few weeks. I also think the secondary entry point is a good option. It's like a final shakeout for the stock to move ahead unencumbered= by "waffley selling" like I was doing. - -- Bill - -------Original Message------- From: michael_niemotka@baxter.com Sent: 07/10/03 08:28 AM To: canslim@lists.xmission.com Subject: [CANSLIM] Break outs or pullbacks > > A general question to the group: Do you tend to look strictly for breakouts from sound bases, and/or do you look for secondary entry points into stocks that have already broken out and still show promise? Mike Mike Niemotka , PE Sr. Principal Engineer Baxter Healthcare Corporation Route 120 & Wilson Road Round Lake, IL 60073 Tel (847) 270-4075 Fax (847) 270-4525 michael_niemotka@baxter.com - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. > - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. - - - -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, 10 Jul 2003 20:23:04 -0700 From: "Bill Triffet" Subject: Re: Re: [CANSLIM] Break outs or pullbacks Gotcha. To explain it better: allow it to come back to the pivot on a orderly pullback (not a selloff). - -- Bill - ----- Original Message ----- From: "Bob Johnson" To: Sent: Thursday, July 10, 2003 5:00 PM Subject: Re: Re: [CANSLIM] Break outs or pullbacks > Watch the wiggle room. If it doesn't work out you'll start taking bigger losses which will take away from your profits. > > Bill Triffet wrote:My mistake was selling a couple points above their pivots. Had I given them just a wee bit more wiggle room I'd still be in. I didn't wait for them to touch the pivot price. I'd figured if they went up 12-15% they wouldn't pull all the way back to the pivot right away. > > Just a bit more wiggle room next time. (g) > > -- > Bill > > > > -------Original Message------- > From: Mike Lucero > Sent: 07/10/03 02:38 PM > To: canslim@lists.xmission.com > Subject: Re: [CANSLIM] Break outs or pullbacks > > > > > At a William O'Neil seminar, David Ryan said you should sell at least half > if a stock falls below it's pivot. > > ----- Original Message ----- > From: "Bill Triffet" > To: > Sent: Thursday, July 10, 2003 8:57 AM > Subject: Re: [CANSLIM] Break outs or pullbacks > > > Mike, > > I started out this "trading season" strictly buying breakouts. I've since > started keeping equal watch on pullbacks on recent breakouts for second > chance entries provided the volume is light. > > My reasoning is that in recent buys SHFL, AMHC, ADVP, to name a few, they > broke out nicely. They quickly gained steam within a matter of a week or > two. Problem was - they all started breaking down. It was not on huge > volume > but I didn't want to see my profits turn into losses. My stop-losses were > set perhaps too tight so they all sold off. Looking back, offered > secondary > entry points. I blame this short sightedness on my technique to several > years of bear rallies with quick 10-12% gains that fell back down equally > as > fast. It's tough to watch an issue shoot up 12% then fall back to my buy > point. > > I've since made a mental pact with myself (g) to allow them to fall right > back to the base for the first few weeks - regardless of it being 10-20% > in > the first few weeks. I also think the secondary entry point is a good > option. It's like a final shakeout for the stock to move ahead > unencumbered > by "waffley selling" like I was doing. > > -- > Bill > > > > > > -------Original Message------- > From: michael_niemotka@baxter.com > Sent: 07/10/03 08:28 AM > To: canslim@lists.xmission.com > Subject: [CANSLIM] Break outs or pullbacks > > > > > A general question to the group: > > Do you tend to look strictly for breakouts from sound bases, and/or do you > look for secondary entry points into stocks that have already broken out > and still show promise? > > Mike > > Mike Niemotka , PE > Sr. Principal Engineer > Baxter Healthcare Corporation > Route 120 & Wilson Road > Round Lake, IL 60073 > Tel (847) 270-4075 > Fax (847) 270-4525 > michael_niemotka@baxter.com > > > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. > > > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. > > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. > > > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. > > > --------------------------------- > Do you Yahoo!? > SBC Yahoo! DSL - Now only $29.95 per month! - - - -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: Fri, 11 Jul 2003 08:26:29 EDT From: Davellil5@aol.com Subject: Re: [CANSLIM] Break outs or pullbacks Re: All the email about "Breakouts or Pullbacks". According to O'Neil's research, 6 out of ten stocks that break out of "good-quality" bases (with good Company performance and/or prospects) rise. The other four drop below the 7% fail-safe rule. So, if one sells the 4 at or around 7% loss and rides the other 6, he makes money. But those are long-term odds under a variety of market conditions. Suppose we're in a market where 8 out of 10 stocks suffer a correction in excess of 7%, instead of only 4. Then, if one keeps buying on breakouts, he loses. I haven't kept a statistical record, but believe, from much observatioon, that in the present rising (but still spooky) market, the number of stocks that correct after breakout is closer to 8 out of 10 than 4 out of 10. If that's right, then doesn't it make sense not to buy on a breakout, but wait for the correction and buy on signs of recovery therefrom (while this behavior persists). In these emails, some have called such behavior the "IBD curse", i.e., smart-alecs taking advantage of CANSLIM-ers, buying into handles and selling on breakout. Whether it's that or just investors taking profit quickly, why follow O'Neil's general rule blindly instead of adapting it to investors' behavior under current market conditions? If one waits for initial recovery from post-breakout correction to buy a good CANSLIM stock, he may indeed miss some (the 2 out of 10) that keep rising after breakout even in these times. So what -- other fish in the sea! Or maybe, after a flat base or very shallow saucer, one should buy at breakout -- even in this market -- because investors in such stocks haven't bought at much lower prices on the right wall of a cup or "W", and therefore are less likely to sell off. Observation would reveal if that's a sensible exception to the "Don't buy on breakout rule" for now. Should we CANSLIM-ers be developing adaptations of WON rules like this, when market behavior so dictates? What have y'all observed along these lines? What do you think? Regards, Dave Any thoughts from others on this line of thinking. Just because we have ageberal rule, doesn't mean that - - - -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: Fri, 11 Jul 2003 10:45:28 -0500 From: Mike Baudino Subject: Re: [CANSLIM] Break outs or pullbacks Waiting for the breakout to be tested, recover from the test, and rebreak higher is what investmenthouse.com recommends and it seems to do well for them. Granted they look for other plays like tests against the MVA, flat bases, flying plateau patterns, etc. But their take is that a break from a good cup with handle will very likely retest the MVA or the pivot point again before moving higher, especially if it breaks well initially. Of course, some never retest so they miss the entry point altogether... Davellil5@aol.com@lists.xmission.com on 07/11/2003 07:26:29 AM Please respond to canslim@lists.xmission.com Sent by: owner-canslim@lists.xmission.com To: canslim@lists.xmission.com cc: Subject: Re: [CANSLIM] Break outs or pullbacks Re: All the email about "Breakouts or Pullbacks". According to O'Neil's research, 6 out of ten stocks that break out of "good-quality" bases (with good Company performance and/or prospects) rise. The other four drop below the 7% fail-safe rule. So, if one sells the 4 at or around 7% loss and rides the other 6, he makes money. But those are long-term odds under a variety of market conditions. Suppose we're in a market where 8 out of 10 stocks suffer a correction in excess of 7%, instead of only 4. Then, if one keeps buying on breakouts, he loses. I haven't kept a statistical record, but believe, from much observatioon, that in the present rising (but still spooky) market, the number of stocks that correct after breakout is closer to 8 out of 10 than 4 out of 10. If that's right, then doesn't it make sense not to buy on a breakout, but wait for the correction and buy on signs of recovery therefrom (while this behavior persists). In these emails, some have called such behavior the "IBD curse", i.e., smart-alecs taking advantage of CANSLIM-ers, buying into handles and selling on breakout. Whether it's that or just investors taking profit quickly, why follow O'Neil's general rule blindly instead of adapting it to investors' behavior under current market conditions? If one waits for initial recovery from post-breakout correction to buy a good CANSLIM stock, he may indeed miss some (the 2 out of 10) that keep rising after breakout even in these times. So what -- other fish in the sea! Or maybe, after a flat base or very shallow saucer, one should buy at breakout -- even in this market -- because investors in such stocks haven't bought at much lower prices on the right wall of a cup or "W", and therefore are less likely to sell off. Observation would reveal if that's a sensible exception to the "Don't buy on breakout rule" for now. Should we CANSLIM-ers be developing adaptations of WON rules like this, when market behavior so dictates? What have y'all observed along these lines? What do you think? Regards, Dave Any thoughts from others on this line of thinking. Just because we have ageberal rule, doesn't mean that - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or -"unsubscribe canslim". Do not use quotes in your email. ******************* PLEASE NOTE ******************* This E-Mail/telefax message and any documents accompanying this transmission may contain privileged and/or confidential information and is intended solely for the addressee(s) named above. If you are not the intended addressee/recipient, you are hereby notified that any use of, disclosure, copying, distribution, or reliance on the contents of this E-Mail/telefax information is strictly prohibited and may result in legal action against you. Please reply to the sender advising of the error in transmission and immediately delete/destroy the message and any accompanying documents. Thank you. - - - -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: Fri, 11 Jul 2003 11:20:51 -0500 From: "Katherine Malm" Subject: RE: [CANSLIM] Re. ROE Hi jans, I agree with you that all in all, while ROE is a useful guide, that it = should not be an absolute criteria. That stems from the nature of ROE = calculations, the R&D expenditures you point out being only one example. = For example, you can have 2 companies of equal profitability and growth = rates, but if one has higher leverage than the other (more debt), the = ROE number will look far different because their equity numbers in the = denominator will be smaller. Another example, you can have 2 companies = that are essentially similar, but differing accounting treatments for = items such as inventory valuations, depreciation methods, pension = accounting, treatment of in process R&D on acquisition, capitalization = vs. expensing of leases and other misc. costs, investments in common = stock, treatment of extraordinary items or discontinued items, etc. will = all affect the net income (the numerator in the ratio) for one company = vs. another and thus the resulting ROE. All that's just to say that ROE is far better as a comparative ratio = than an absolute ratio requirement. R&D is a good example. Say that in = general, R&D expenses are high across all companies in the industry, = then it is far more useful to look at the ROE's of all companies within = the same industry and see how a particular candidate tracks *in = comparison.* Or, for any one company, how is their own ROE tracking over = time? Of course, the real test is whether the company is able to = effectively translate those R&D dollars into growth in revenues and = earnings, and, once again, as you pointed out, that is the real acid = test. Katherine - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Spencer48@aol.com Sent: Thursday, July 10, 2003 5:54 PM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] Re. ROE Katherine: I have noticed-and particularly with hi tech stocks-that go-go = stocks=20 without high ROE's generally make up for that with high R&D's (I get = both these=20 info data from DGO). =20 That is, even though a stock (usu. a hi tech stock, but also a = medical=20 tech stock) has a low ROE the fact that it has a high R&D points up to = the fact=20 that the earnings (which ROE is made up of) are low for this reason, ie. = a=20 high R&D. Also, this applies to the fact that equity is rising, = relatively=20 [ie. people and funds wish to invest]. (It would be interesting, by the = way, to=20 see if fund investing rises in these stocks). Although, this is just an impression based on my observations of = stocks=20 that take off, it would appear to me that stocks in a hi tech industry = with=20 high earning GROWTH, and with low ROE but a high R&D, are Canslimish if = not=20 officially CANSLIM. =20 What do you think? jans In a message dated 7/9/2003 11:13:38 PM Eastern Daylight Time,=20 kmalm@earthlink.net writes: << A: Generally, we will weigh the pluses and minuses if the stock is = not a perfect fit and "go for it," as you say. ANSI's return on equity is currently unreported for 2002, but 2001 came in at 5.4%, which is an improvement over 2000's 2.1% return on equity. In this case, given that = all other factors are fairly strong, we would accept the fact that return = on equity is improving, although it does not meet the optimal level we = would prefer. However, if we compared ANSI with, for example, ZMH, another = stock in the same group, we might decide to choose ZMH based on its 115.9% = return on equity, assuming all other factors are equal and ZMH is at a proper = buy point. The other example you cite, JEC, is showing a return on equity = of 17.1% =E2=80=94 very strong and very desirable =E2=80=94 but earnings = are growing in the mid-teens over the past four quarters. However, we might take into = account the fact that JEC is a steady earnings performer, something that is at = a premium in the current environment, and may benefit from current trends = in that industry. So, again, we are weighing pluses and minuses and "going = for it." >> - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. - - - -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: Fri, 11 Jul 2003 09:22:24 -0700 (PDT) From: Tomas Subject: Re: [CANSLIM] Break outs or pullbacks Dave, I understand your logical reasoning. However, the concern about that approach is that you may be missing out on the "best" stock. The best stock usually does not pull back to give you a second entry point. At least that is what I see from my limited experience. Also, like you said, it heavily depends on the M (if it is strong or weak bull). Thus, your proposed approach is aim at the good stocks but not great stocks. Nothing with the approach if you adjust your buy/sell rules accordingly. just my $.02 tomas - --- Mike Baudino wrote: > > > > > Waiting for the breakout to be tested, recover from > the test, and rebreak > higher is what investmenthouse.com recommends and it > seems to do well for > them. Granted they look for other plays like tests > against the MVA, flat > bases, flying plateau patterns, etc. But their take > is that a break from a > good cup with handle will very likely retest the MVA > or the pivot point > again before moving higher, especially if it breaks > well initially. > > Of course, some never retest so they miss the entry > point altogether... > > > Davellil5@aol.com@lists.xmission.com on 07/11/2003 > 07:26:29 AM > > Please respond to canslim@lists.xmission.com > > Sent by: owner-canslim@lists.xmission.com > > > To: canslim@lists.xmission.com > cc: > > Subject: Re: [CANSLIM] Break outs or pullbacks > > > Re: All the email about "Breakouts or Pullbacks". > > According to O'Neil's research, 6 out of ten stocks > that break out of > "good-quality" bases (with good Company performance > and/or prospects) rise. > The > other four drop below the 7% fail-safe rule. So, if > one sells the 4 at or > around > 7% loss and rides the other 6, he makes money. But > those are long-term > odds > under a variety of market conditions. > > Suppose we're in a market where 8 out of 10 stocks > suffer a correction in > excess of 7%, instead of only 4. Then, if one keeps > buying on breakouts, > he > loses. > > I haven't kept a statistical record, but believe, > from much observatioon, > that in the present rising (but still spooky) > market, the number of stocks > that > correct after breakout is closer to 8 out of 10 than > 4 out of 10. > > If that's right, then doesn't it make sense not to > buy on a breakout, but > wait for the correction and buy on signs of recovery > therefrom (while this > behavior persists). > > In these emails, some have called such behavior the > "IBD curse", i.e., > smart-alecs taking advantage of CANSLIM-ers, buying > into handles and > selling on > breakout. Whether it's that or just investors > taking profit quickly, why > follow > O'Neil's general rule blindly instead of adapting it > to investors' behavior > under current market conditions? > > If one waits for initial recovery from post-breakout > correction to buy a > good > CANSLIM stock, he may indeed miss some (the 2 out of > 10) that keep rising > after breakout even in these times. So what -- > other fish in the sea! > > Or maybe, after a flat base or very shallow saucer, > one should buy at > breakout -- even in this market -- because investors > in such stocks haven't > bought at > much lower prices on the right wall of a cup or "W", > and therefore are less > likely to sell off. > Observation would reveal if that's a sensible > exception to the "Don't buy > on > breakout rule" for now. > > Should we CANSLIM-ers be developing adaptations of > WON rules like this, > when > market behavior so dictates? > > What have y'all observed along these lines? What do > you think? > > Regards, Dave > > > > Any thoughts from others on this line of thinking. > > > > > > Just because we have ageberal rule, doesn't mean > that > > - > -To subscribe/unsubscribe, email > "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your > email. > > > > > ******************* PLEASE NOTE ******************* > This E-Mail/telefax message and any documents > accompanying this > transmission may contain privileged and/or > confidential information and is > intended solely for the addressee(s) named above. > If you are not the > intended addressee/recipient, you are hereby > notified that any use of, > disclosure, copying, distribution, or reliance on > the contents of this > E-Mail/telefax information is strictly prohibited > and may result in legal > action against you. Please reply to the sender > advising of the error in > transmission and immediately delete/destroy the > message and any > accompanying documents. Thank you. > > > - > -To subscribe/unsubscribe, email > "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. __________________________________ Do you Yahoo!? SBC Yahoo! DSL - Now only $29.95 per month! http://sbc.yahoo.com - - - -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: Fri, 11 Jul 2003 12:25:08 EDT From: Davellil5@aol.com Subject: Re: [CANSLIM] Break outs or pullbacks Thanks, Mike. I'll check out investmenthouse.com as you suggest Dave - - - -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: Fri, 11 Jul 2003 12:26:21 EDT From: Davellil5@aol.com Subject: Re: [CANSLIM] Break outs or pullbacks Good 2-cents worth. Thanks - - - -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: Fri, 11 Jul 2003 10:36:12 -0700 (PDT) From: Bill Triffet Subject: Re: Re: [CANSLIM] Break outs or pullbacks Dave, You make some very good points. Most will agree there are basic canslim guidelines. Buying on a pullback is one of them provide the price and volume are still cooperating. My perception is at different times the market will offer several scenarios: A. Large percentage of solid breakouts B. A mix of solid breakouts and pullbacks with opportunities to buy. C. Failed breakouts. D. An infinate combination of A, B, & C. Given these scenarios, my belief is you might find yourself looking for more pullback plays as the market presents them. Other times more solid breakouts. Bottom line - it's all canslim. It's not modifiying your buying or selling rules, it's just applying the right canslim approach for the current market. I recall most of my big winners back in the fall of 1999 were double bottoms with short or no handles. It was just how the market was acting back then. - -- Bill - -------Original Message------- From: Davellil5@aol.com Sent: 07/11/03 05:26 AM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] Break outs or pullbacks > > Re: All the email about "Breakouts or Pullbacks". According to O'Neil's research, 6 out of ten stocks that break out of "good-quality" bases (with good Company performance and/or prospects) rise. The other four drop below the 7% fail-safe rule. So, if one sells the 4 at or around 7% loss and rides the other 6, he makes money. But those are long-term odds under a variety of market conditions. Suppose we're in a market where 8 out of 10 stocks suffer a correction in excess of 7%, instead of only 4. Then, if one keeps buying on breakouts, he loses. I haven't kept a statistical record, but believe, from much observatioon, that in the present rising (but still spooky) market, the number of stocks that correct after breakout is closer to 8 out of 10 than 4 out of 10. If that's right, then doesn't it make sense not to buy on a breakout, but wait for the correction and buy on signs of recovery therefrom (while this behavior persists). In these emails, some have called such behavior the "IBD curse", i.e., smart-alecs taking advantage of CANSLIM-ers, buying into handles and selling on breakout. Whether it's that or just investors taking profit quickly, why follow O'Neil's general rule blindly instead of adapting it to investors' behavior under current market conditions? If one waits for initial recovery from post-breakout correction to buy a good CANSLIM stock, he may indeed miss some (the 2 out of 10) that keep rising after breakout even in these times. So what -- other fish in the sea! Or maybe, after a flat base or very shallow saucer, one should buy at breakout -- even in this market -- because investors in such stocks haven't bought at much lower prices on the right wall of a cup or "W", and therefore are less likely to sell off. Observation would reveal if that's a sensible exception to the "Don't buy on breakout rule" for now. Should we CANSLIM-ers be developing adaptations of WON rules like this, when market behavior so dictates? What have y'all observed along these lines? What do you think? Regards, Dave Any thoughts from others on this line of thinking. Just because we have ageberal rule, doesn't mean that - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. > - - - -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 #3412 ****************************** 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.