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canslim Digest      Wednesday, December 11 1996      Volume 01 : Number 021



In this issue:

    Re: [CANSLIM] HDCO and stuff
    Re: [CANSLIM] Bad Call?
    Re: [CANSLIM] SGMA (Sigmatron)
    Re: [CANSLIM] HDCO and stuff
    Re: [CANSLIM] HDCO and stuff
    [CANSLIM] My market comments postings
    Re: [CANSLIM] My market comments postings
    Re: [CANSLIM] SGMA (Sigmatron)
    Re: [CANSLIM] My market comments postings
    Re: [CANSLIM] HDCO and stuff
    Re: [CANSLIM] HDCO and stuff
    Fw: [CANSLIM] My market comments postings
    Re: [CANSLIM] My market comments postings
    re: [CANSLIM] My market comments postings
    Re: [CANSLIM] HDCO and stuff
    Re: [CANSLIM] SGMA (Sigmatron)
    [CANSLIM] Fw: North Pole Report

See the end of the digest for information on subscribing to the canslim
or canslim-digest mailing lists and on how to retrieve back issues.

----------------------------------------------------------------------

Date: Tue, 10 Dec 1996 21:10:17 GMT
From: Craig Griffin <[e-mail]>
Subject: Re: [CANSLIM] HDCO and stuff

At 12:15 PM 12/10/96 CST, you wrote:

>Next time Zoran makes a serious buy - we should all consider
>researching it.   HDCO continues to climb.   It is at
>52-1/2 as I post this.

Agree with that sentiment, but only if we can get it within 10% of its break
point.  Looks like he has hooked another good one with SGMA.
Congratulations Zoran!  And your purchase at up 10% looks like an ok buy to
me, esp. given it's action today.  Sorry I missed it yesterday :).

>The stocks I sold due to the drop precipitated by Greenspan's
>comments continue to rise.  They are both pushing new highs.
>Sigh...   For those of you who can take the emotion completely
>out of this - I commend you.

I sure can't do it completely. It is teeth knashing to wait before pulling
the trigger when the market gets a blow like it did on Friday.  As time goes
by I become more able to wait out and separate market news from news
directly affecting my stocks.  But I have been there, too often.

>a hard time with this is because I usually don't set FIRM
>stops - I also factor in gut feeling.

I believe in firm stops.  I once asked O'Neil at a seminar, "what about 5%
stops in the situation where I've bought a stock and a day or two later it
suddenly drops 10% below my buy point?"  He basicly answered that buying
right solves 90% of your problems and that either I didn't buy right or the
stock was probably not "acting right" before that.  And I remember thinking
about the couple of examples I had in mind and I was worried because both
didn't feel right somehow, and I had been behind by 3 or 4% almost the
entire time I had owned them until the big drop that scared me out.  Don't
really know exactly how this might apply to your situation, especially since
the Market got you.  But its the best I can do.  I would encourage you to
re-read some of the excellent responses to your original post (Bad Call).

I do factor in gut feeling to this extent, I am willing to wait until the
end of the trading day to execute my stop in many situations.  My stop is
"soft" to that degree.  I do not put in stop loss orders with my broker,
because too often, they drop the stock down, take me out, and then take the
stock back up. I do however, look at the stop at the end of the day, and if
it is hit, I sell at 3:45pm or whatever.  It has sometimes bitten me to do
that, but I have found it to be much cheaper than the alternative (ie. no
firm stop).  For example, I sold MRVC last year at about a split adjusted 6
1/2 to avoid letting a 25% profit turn into a loss.  Then after it formed a
base and broke out again, I couldn't bring myself to buy it (24 1/5
yesterday).  O'Neil and Ryan say that one should divorce oneself from
earlier ownership when buying a stock, and look at it with fresh eyes
(sounds like Zen). It is HARD to do.  A far worse example is that I bought
KARE earlier this year on a breakout at around 19.25 and am still holding
1/2 of it at 12.25.  (Fortunately, I bought only about 1/3 of a position for
some reason).  This (and other similar experiences that I have had) is why I
believe in buying insurance via "firm stops": ie. a red line below which I
will always sell "at the close". Some stocks simply are too volatile for
CANSLIM, I think, that is why tight chart patterns are important.  I bought
PRIA on the appearance of a b/o and after good earnings (but not stellar
ones) got stopped out.  The stock gapped way down on the open and I waited
most of the day to choose my exit point (which was near the high for the
day).  So here is another example of not selling instantly when the stop is
hit.  There are other times when that is appropriate, I think, but it
usually has to do with really bad news on the stock.  Note by the way that
PRIA did the following, dropped another 10-15% from where I sold it (and I
sold on about a 5% stop), and then turned and tighted up and broke out over
the next couple of weeks.  But you can never predict which it will be, a
recovery or down and dead money like KARE is.  (And PRIA was too wide and
loose, I should have never bought it).

>My actions were to dump them because they got stopped out
>by a firm stop.   Even though the money I lost is less
>than on some other trades - this one hits harder for the
>above reason.   I'm having a hard time getting back into
>any trades because deep down I still feel the stocks I
>picked last week were the best - but can't bring myself to
>buy them 10% higher than I just sold them 2 days ago -
>especially since I took a net 8% loss on them.
>

And CANSLIM says that you should not buy them 10% past the breakout (unless
on a 10 day moving average bounce, which is a bit of a trick and I have
never personally tried it.) But, no one here can tell you how rigorously to
apply CANSLIM to your own trading style.  I do believe that you have partly
"fallen in love" with those stocks.  At any rate, if you think they are the
"best", it's not CANSLIM that's urging you to own them.  CANSLIM says you
should have been looking for other stocks such as Zoran has found, try to
catch a 25 or 30% profit, maybe sell 1/2, maybe all ... and move on looking
for the next one.  O'Neil says "there are no good stocks.  They are all bad,
sooner or later."   So if you are buying on a fundamental basis only,
without applying the technical rules of CANSLIM as well, then you are
outside anything I can really address.  The Motley Fools and Peter Lynch
both seem to do well with this (more fundamental only) approach over the
long haul. I don't know, really, I believe CANSLIM is the way to go of
course, but it is hard.  It takes discipline, focus, and emotional balance.

>My questions are (after this long-winded post):
(I second that sentiment, but I am trying to share my thinking as completely
as possible ... only way I know to try to help).

>
>1.  Given that I believe one MUST trade in accordance with
>    one's personality - can anyone suggest how I can shake
>    this feeling I illustrated in the last paragraph?

I am leery of making any suggestion, there is now the real fear for me that
the stocks you are referring too will move up 50% in the next couple of
months if I say "move on, find other good candidates, there are new ones
coming along all the time." or that they will drop precipitously if I say
"trust your feelings and look to get back in."  CANSLIM says look for new
candidates, and buy these after they form a new base and break out again,
unless the others trade back down on low volume and give you a second chance
to buy.  Lynch and Motley Fool say buy 'em and hold 'em after you know them
from doing your fundamental research, but they don't buy breakouts and use
stops of 7% either.  It takes some soul searching to determine your trading
style.  CANSLIM is a style that requires that one constantly accept one's
mistakes and move on, or briefly celebrate one's success and move on.  And
it seems like I make at least 2 mistakes for every one success. But I do
believe that executing exactly right will produce superior returns.  That's
what I am after, but have only achieved it 2 years out of four.  But I
believe my failure is because I am a slow learner.  Finally I'm getting
there though, starting to pull all of the pieces together with understanding
and learn to follow the plan with discipline.
>
>2.  Those of you who advocate FIRM stops - do you ever go
>    to gut feel.  If so, when?  If not, do events like
>    this bother you.
Yes, intraday. See above.

Hope this helps, Dave.  Its the best I can do.

Best regards,
Craig


PS. I am going to mostly lurking for a while because of a time crunch on
some things.  Blessings of the Season to all!

------------------------------

Date: Tue, 10 Dec 1996 18:55:21 -0500
From: "tom worley" <[e-mail]>
Subject: Re: [CANSLIM] Bad Call?

I agree to the extent that the "small investor":
   a) is dealing with a discount svc and/or via the net
   b) is either not sufficiently knowledgable on his own or has a broker
who is not sufficiently knowledgable to plan a course of action (panic
sell, hold on tightly, consider it a kmart blue lite special)

In the first case, too many comments I have heard indicate to me that
discount houses can make a profit w/discounted (often deeply) commissions
by reducing the level of service. Sadly, one of their areas of reduced
service is the number of lines into the firm either by phone or net and/or
by executing on the third mkt vs primary mkt. In times of chaos, both are
swamped.

In the second case, without a plan you either make no decision (which will
usually be a mistake) or you will run with the herd, which is also likely
to be a mistake (either because you sell at the day's low prior to a
temporary rebound or because selling was the wrong decision at any price
that day).

On the other hand, even dealing w/full svc firm does not guarantee access
in chaos. Ask your broker, if you are using one, if there is a direct line
to him bypassing the switchboard (which may be swamped). At least this way
you have two ways of calling him. In addition, he may have a beeper,
cellular, or email you can use (often these are not given out other than to
best clients, altho never hurts to ask). If you can get thru to your firm's
switchboard, most firms have a broker of the day (often may be a junior rep
with few clients) who can take your call if you just want to place a sell
order. Or you can ask for the manager, that can also get you thru to
someone who should be knowledgable about what is going on.

One advantage of dealing with a full svc firm is that they should be
computer linked (as mine is thru Bear Stearns) directly with the floor
specialist. Execution reports last Friday were online within a matter of
several minutes on market orders. On OTC trades, I have speed dial to 3
different broker-dealers where I can place the order by phone, or I can put
it via computer to Bear's OTC desk. Use last Friday as a dress
rehearsal/wake up call if you had problems w/access. Try some of the above
suggestions, ask questions if you had problems w/access to the mkt cuz
there should not be access problems. The one problem that realistically
can't be elimiinated is that of the fund mgr dumping a qtr mil shares as a
block. I have no easy answers to that one.

good luck
tom w

- ----------
> From: [e-mail]
> To: [e-mail]
> Subject: Re: [CANSLIM] Bad Call?
> Date: Monday, December 09, 1996 10:26 PM
>
> I think small investors always get mashed in volume sell offs; not only
> are they a non existant priority, but the shear volume of transactions
> makes gauging a sell like that very difficult and do much the
> happen stance of how many phone lines are up for calls at the
> brokerage house one has selected. The real savings in selecting a broker
> is not the $10 or $20 difference between different brokerage houses,
> rather who can handle volume during sell offs.

------------------------------

Date: Tue, 10 Dec 1996 19:20:37 -0500
From: "tom worley" <[e-mail]>
Subject: Re: [CANSLIM] SGMA (Sigmatron)

Personally, this tech mkt is so volatile that I would be inclined to day
trade. Today's action in Gateway 2000 (which started breaking out
yesterday) is good example. Several brokers in my office were buying it for
their own personal acct today at around 64 (another new high) but it ended
up at 58.75, down about 4 pts for the day). It's a vicious world out there,
and I am not embarrassed to admit if I hit one right for a 1 or 2 day
trade, I would probably take my profits and say thank you. Don't want to
influence you cuz I am still playing the small caps for the most part so
don't have any real money on the table on the big caps, but there's never
anything wrong in making a profit fast, even if it goes even higher.

good luck
tom w

- ----------
> From: Zoran Mitrovski <[e-mail]>
> To: [e-mail]
> Cc: [e-mail]
> Subject: [CANSLIM] SGMA (Sigmatron)
> Date: Tuesday, December 10, 1996 12:34 PM
>
>
> Bought at 14 7/8 yesterday on 10+ times the avg volume,
> after they announced great earnings.
> Nice numbers (90+ 90+ A ; PE=15).
>
> Hit 18 today, and wiggles around 17.5 now, again on
> what is supposed to be a record volume (this am, it is
> 10 times the avg volume already). I was affraid I bought
> it too late, but perhaps I didn't. (10% above pivot?)
> The chart had a nice base around 13.5. After the
> "Greenspan Friday AM" dip, it took off like a rocket.
>
> Negative: Group rank is E but as many here said,
> there is lots of money seeking technology stocks
> these days, and this one seems to have been overlooked.
> (1% institutional ownership, but someone is obviously
> paying for those 20k shares spikes on the volume chart).
>
> I pondered a bit on what the wisemen of the group
> said lately about acting too soon and I decided to
> wait for more than two days on this one, and see what
> happens. ;^)
>
> Any advice on this one?
> Shall I stay on it, or just take my profits and run?
> (as always)
>
> Also, perhaps I acted to hastily with HDCO. In at 37 and
> 44.5 and out at 45.9. Today it opened at 53 or smth.
> I still have to learn how to recognize and keep a winner.
> And this group helps me...a lot!
>
> SigmaTron International, Inc. manufactures electronic
>    components, printed circuit board assemblies, and turnkey
>    electronic products. The company primarily provides
>    automatic and manual insertion of components onto printed
>    circuit boards. It offers pin-through-hole and surface mount
>    technology, depending on the requirements of individual
>    customers. Subsidiary EMD Electronics designs and
>    produces electronic components, including coils, high
>    frequency products, toroids, ferrite transformers, and DC to
>    AC inverters, for the parent company and 3rd-party
>    customers. SigmaTron sells its printed circuit boards to
>    OEMs of a wide range of products, including electronic dart
>    boards, industrial electronics, and tanning beds.
>
>
> Cheers,
> Zoran
> http://www.seas.rochester.edu:8080/ee/users/zmitrov/home.html
>
> P.S. If SGMA doesn't plunge on me, I'm already up 25% on my
> money since I first started.
>

------------------------------

Date: Tue, 10 Dec 1996 19:32:25 -0500
From: "tom worley" <[e-mail]>
Subject: Re: [CANSLIM] HDCO and stuff

David, what you did was not a mistake, you followed the rules, and over
time and on average that will work to your favor. On the other hand, you
missed several signals that could have justified violating the rules
including not balancing Greenspan's words (actually the commentators
interpretation of his words) against the unemployment nrs; and not spotting
the reversal in the bond mkt prior to the opening of the equity mkt.
Leaving in hard stops (which were likely to be violated by a gap down, thus
executing you well below your stop nr) could not have been easily avoided
in the absence of these two major signals. When I have stop orders in place
(and no, I don't always use them) I will leave them in place in a
reasonably orderly mkt, but am likely to kill them in a chaotic one. Why?
Because I want to have some idea of what my execution price will likely be.
I will have also chosen my stop nr based on bases, resistance, 50/200 dma,
etc and barring news specific to the stock I am holding, will want to sell
if/when THAT stock trades into that nr. Obviously, if bad news about that
stock comes out, I take my lumps and move on.
You had one of those days we are supposed to learn from. What you know have
to do is to learn, and move forward. That may mean staying in cash for
awhile till the mkt becomes, to you, more predictable. You may want to look
at less volatile, more value based stocks. You may even just want to play
some on paper till you regain your confidence. But the bottom line is that
you should still apply CANSLIM principles to your reviews. It's not a
perfect system, just a tool, a guide, to help us increase the likelihood
that we will be more right than wrong.
good luck
tom w

- ----------
> From: David F. Cameron <[e-mail]>
> To: [e-mail]
> Subject: [CANSLIM] HDCO and stuff
> Date: Tuesday, December 10, 1996 1:15 PM
>
> Greetings everyone,
>
> Next time Zoran makes a serious buy - we should all consider
> researching it.   HDCO continues to climb.   It is at
> 52-1/2 as I post this.
>
> The stocks I sold due to the drop precipitated by Greenspan's
> comments continue to rise.  They are both pushing new highs.
> Sigh...   For those of you who can take the emotion completely
> out of this - I commend you.    I guess the reason I'm having
> a hard time with this is because I usually don't set FIRM
> stops - I also factor in gut feeling.   Sometimes this means
> I do the classic mistake of saying "gee this is such a good
> stock - how can it keep dropping..." and hang on for the ride,
> but sometimes it works ok.   THIS time, I listened
> to the posters in this group, and came to the conclusion that
> hard stops were better because they took the emotion and the
> "good stock" factor out of it.
>
> Well... now I could use advice.   My gut feel was to hang
> onto those stocks, because I felt the drop was overblown.
> My actions were to dump them because they got stopped out
> by a firm stop.   Even though the money I lost is less
> than on some other trades - this one hits harder for the
> above reason.   I'm having a hard time getting back into
> any trades because deep down I still feel the stocks I
> picked last week were the best - but can't bring myself to
> buy them 10% higher than I just sold them 2 days ago -
> especially since I took a net 8% loss on them.
>
> My questions are (after this long-winded post):
>
> 1.  Given that I believe one MUST trade in accordance with
>     one's personality - can anyone suggest how I can shake
>     this feeling I illustrated in the last paragraph?
>
> 2.  Those of you who advocate FIRM stops - do you ever go
>     to gut feel.  If so, when?  If not, do events like
>     this bother you.
>
> Thanks,
>
> Dave "almost feeling like a novice again" Cameron
> [e-mail]

------------------------------

Date: Tue, 10 Dec 1996 20:23:11 -0500
From: "tom worley" <[e-mail]>
Subject: Re: [CANSLIM] HDCO and stuff

Excellent response, thanks for taking the time, Craig.
I would like to repeat two points: first, soft stops as Craig is using it
(esp in a chaotic mkt) vs hard stops. What Craig is doing is maintaining
some control without losing sight of the rules. He is using judgement, and
my experience from both being a broker as well as entering orders for other
brokers is that this will usually be better than blindly following
rules/system/someone else's decisions.
Second, as to the market being "manipulated" to hit your stops, take you
out, then rally back on up, I must confess to having witnessed this on more
than one occasion when I had just entered a batch of "stop" orders a pt or
two below the mkt. The best (worst?) case example that I can cite is Diana
(DNA) where I have seen the stock halt briefly after just entering 8 or 9
stop orders 1.5 to 2 pts below the stock, seen it reopen below the limit
with immediate execution of the stop orders with a gap down from the limit
nr, then move back several pts higher than the limit.
This is not to say that limit orders are all bad, but showing your hand to
the floor specialist can, in some cases, be costly.
Every buy should be approached as if it was an entirely new stock, even if
the symbol "happens" to be the same as one you have previously traded.
Don't rely on past experience or charts or knowledge to aid your judgement,
start from scratch and do it all over again.
Just one order entry clerk's observation.
tom w
- ----------
> From: Craig Griffin <[e-mail]>
> To: [e-mail]
> Subject: Re: [CANSLIM] HDCO and stuff
> Date: Tuesday, December 10, 1996 4:10 PM
>
> I do factor in gut feeling to this extent, I am willing to wait until the
> end of the trading day to execute my stop in many situations.  My stop is
> "soft" to that degree.  I do not put in stop loss orders with my broker,
> because too often, they drop the stock down, take me out, and then take
the
> stock back up.

------------------------------

Date: Tue, 10 Dec 1996 20:35:49 -0500
From: "tom worley" <[e-mail]>
Subject: [CANSLIM] My market comments postings

I have posted some occasional "market comments" spiels with little feedback
so far. I realize I have a somewhat warped view as a broker/investor/back
office-order entry flunkie, but would be interested in knowing if (a) I am
wasting your time and space in your inbox or (b) I'm doing anyone any good
at least in educating and presenting a different (often contrarian) point
of view.

I'm not looking for feedback to my self esteem, as you already painfully
know, I love to respond and share my opinion, just want to see if I am
being of any help.

Feedback welcome, advice/suggestions will be honestly considered.

tom w

------------------------------

Date: Tue, 10 Dec 1996 21:39:41 -0500 (EST)
From: Zoran Mitrovski <[e-mail]>
Subject: Re: [CANSLIM] My market comments postings

Tom wrote:
..
> I'm not looking for feedback to my self esteem, as you already painfully
> know, I love to respond and share my opinion, just want to see if I am
> being of any help.

Yeah, right. You've been a hell of a lot help to many of us here
(Or perhaps I should speak for myself), and you know it. ;^)
Once again, Tom. Thanks a billion!!
Each of our green salads could always use some of your (r)(s)easoning.

> Feedback welcome, advice/suggestions will be honestly considered.
>
> tom w

Cheers,
Zoran
;^)

------------------------------

Date: Tue, 10 Dec 1996 21:52:39 -0500 (EST)
From: Zoran Mitrovski <[e-mail]>
Subject: Re: [CANSLIM] SGMA (Sigmatron)

Tom wrote:

> Personally, this tech mkt is so volatile that I would be inclined to day
> trade.

Tom, why are you doing this to me? Is your heart made of stone?
The moment I make a commitment to myself to hold a stock for
more than two days you say that I should sell the damn thing. ;^)
Do you know what that can do to a novice investor/speculator's
mind and future development? ;^)
Dammit, I'm gonna be watching SGMA every half an hour tomorrow,
(Btw, I get real time quotes through Datek now. It's GREAT!)
not knowing what to do every minute of the day.
The way it acted today (on a 1600% volume increase, so look
for it at the top of IBD's list of % increases), I have
a feeling that tomorrow it's gonna open with a gap. Up or
down, but almost sure with a gap. There's thousands of guys
tonite asking themselves whether they should say "thank you"
to the Lord of SGMA and get out or they should perhaps
sit to see whether there is more fuel in the rocket.

Today, it was 50-50 so almost the whole day, the stock
based around 17-17.5
Whatever...

Cheers,
Zoran
;^)

------------------------------

Date: Wed, 11 Dec 1996 02:57:45 GMT
From: Craig Griffin <[e-mail]>
Subject: Re: [CANSLIM] My market comments postings

At 08:35 PM 12/10/96 -0500, you wrote:
>I have posted some occasional "market comments" spiels with little feedback
>so far.

Hi Tom,

Couldn't resist responding to this. I for one quite enjoy and appreciate
your market comments and other posts tremendously.  There is rarely one from
which I do not learn something or which doesn't get me to thinking.  Thanks
for taking the time! For instance I found the posting just prior to this one
that began:

>David, what you did was not a mistake, you followed the rules, and over
>time and on average that will work to your favor.

to be extremely astute and to the point.  Thanks again.  ... Now back to
lurking.

Best regards,
Craig

------------------------------

Date: Tue, 10 Dec 1996 22:09:50 -0500 (EST)
From: Zoran Mitrovski <[e-mail]>
Subject: Re: [CANSLIM] HDCO and stuff

Tom wrote:
..
> Second, as to the market being "manipulated" to hit your stops, take you
> out, then rally back on up, I must confess to having witnessed this on more
> than one occasion when I had just entered a batch of "stop" orders a pt or
> two below the mkt.
..
> This is not to say that limit orders are all bad, but showing your hand to
> the floor specialist can, in some cases, be costly.

Waidaminit here guys!
Are you saying that someone out there knows of my STOP order
when I have placed it? I thought it was strictly confined to the
domain of my broker (E*Trade in my case), and it only went out
in public when it was sent to be executed.
I have a huge space of ignorance here that needs a quick fill.
If stop orders indeed influence the price movement then that's
utterly unfair. Obviously they can scalp you in many different ways
on the Street.

While at it. Any comments on the Busines Week cover article on
the involvment of the Mob on Wall Street? The writer sure had
some huge balls (or is crazy for a Pulizer or smth) to do the
digging and to come out with an article like that.

Unbelievable stuff.
Scared the s**t out of me!

Cheers,
Zoran
;^)

------------------------------

Date: Wed, 11 Dec 1996 05:16:00 GMT
From: [e-mail] (Richard S)
Subject: Re: [CANSLIM] HDCO and stuff

On Tue, 10 Dec 96 12:15:10 CST, you wrote:

::=20
:: Well... now I could use advice.   My gut feel was to hang
:: onto those stocks, because I felt the drop was overblown.
:: My actions were to dump them because they got stopped out
:: by a firm stop.   Even though the money I lost is less
:: than on some other trades - this one hits harder for the
:: above reason.   I'm having a hard time getting back into=20
:: any trades because deep down I still feel the stocks I
:: picked last week were the best - but can't bring myself to
:: buy them 10% higher than I just sold them 2 days ago -
:: especially since I took a net 8% loss on them.
::=20
:: My questions are (after this long-winded post):

OK, here is my opinion, maybe it will generate some discussion.

::=20
:: 1.  Given that I believe one MUST trade in accordance with
::     one's personality - can anyone suggest how I can shake
::     this feeling I illustrated in the last paragraph?

I think first you need to ask yourself if you are upset because you
lost money, or because you think you stop was too tight.  The stop=20
decision must be a logical one, based on good research, analysis, and
maybe a little gut feeling thrown in.  When one executes
automatically, that is what you placed it there for.  When they
execute earlier than I would like and I lose money, I just look at it
as a cost of doing business, kinda like paying the broker fee.  Since
the stock has rebounded, it looks/feels like a bad decision, but if it
had continued to drop to a 30% loss and not rebounded, then you would
be saying " thank God I had my stops in place".  A stop is kinda like
buying car insurance.  Every month I mail off my check, and every
month I think about th fact that I have not needed my insurance for
the last 10 years.  The insurance companies are getting rich off of
me. :)  BUT,,, sure as heck if I dropped it, I would be involved in a
wreck, and then I would be crying in my beer saying " I should have
know better than to drop that Insurance."  Thats all a stop is,
insurance against losing principal or profit, just a cost of doing
business but I don't think we can live without them any more than we
can live without our car or health insurance.

::=20
:: 2.  Those of you who advocate FIRM stops - do you ever go
::     to gut feel.  If so, when?  If not, do events like
::     this bother you.

I do go with the gut feel to some degree, and thats because I cannot
look at the situation from a completely unemotional standpoint, which
may be one of the reasons that all my stocks aren't winners.  But, my
gut feel is in the area of where the stop should be, 5%, 8%, 10% or
even 15%.  I try and use some logic, but the final decision has some
gut feelings too, but I always have the stops somewhere, I'll never
forget the burnings I received in the past when I didn't use stops at
all.  One thing I have never done, is to lower my stop.  I raise them
as my profit increases, to protect the profit, but so far, once I have
decided on a stop, I either leave it or raise it.  And yes, events
like this do bother me, but not as much as they would have if it had
fallen 20-30% before the stop kicked in.  I have a tendancy to fall in
love with some stocks, and when I lose a good one, and I've got a
couple I'm real worried about now, I just keep telling myself that it
was a good decision when I placed the stop, and its still a good
decision, even if things didn't work out the way I had hoped.=20
Hang in there, these are all learning experiences, even if we can't
always understand the lesson. :)

Richard...

------------------------------

Date: Wed, 11 Dec 1996 18:37:32 +1300
From: "Dean Edwards" <[e-mail]>
Subject: Fw: [CANSLIM] My market comments postings

I appreciate the comments you make about the market. I'm always lost
for words when it comes to writing. I would imagine that a lot time and
thought has gone into each post. Knowledge is wisdom and there have been
some real  "pearls of wisdom " about the market. I for one enjoy your
posts.
These are general comments to everyone. Someone who is posting something,
is obviously saying something that they feel is important . Otherwise they
wouldn't post it.  For me it adds a new dimension. I am seeing through
another person's eyes what they see. It doesn't matter if someone is right
or wrong. It is still interesting to get another persons perspective. That
person might have seen something that you might have missed. For example in
psychology, a person
can be shown a picture of a face and they will either see a young woman or
an old woman depending on their perspective. That is why I always strive to
be flexible and never rigid in my thinking. Anything about CANSLIM will
always have my undivided attention.

Regards Dean

- ----------
> From: tom worley <[e-mail]>
> To: CANSLIM <[e-mail]>
> Subject: [CANSLIM] My market comments postings
> Date: Wednesday, December 11, 1996 2:35 PM
>
> I have posted some occasional "market comments" spiels with little
feedback
> so far. I realize I have a somewhat warped view as a broker/investor/back
> office-order entry flunkie, but would be interested in knowing if (a) I
am
> wasting your time and space in your inbox or (b) I'm doing anyone any
good
> at least in educating and presenting a different (often contrarian) point
> of view.
>
> I'm not looking for feedback to my self esteem, as you already painfully
> know, I love to respond and share my opinion, just want to see if I am
> being of any help.
>
> Feedback welcome, advice/suggestions will be honestly considered.
>
> tom w

------------------------------

Date: Wed, 11 Dec 1996 05:53:04 GMT
From: [e-mail] (Richard S)
Subject: Re: [CANSLIM] My market comments postings

On Tue, 10 Dec 1996 20:35:49 -0500, you wrote:

I for one greatly appreciate your insight into the market in general,
and,also the specific areas that you sometime address. I am still a
Newbie, and I view your post as the voice of experience and most of
the time I agree with them completely.  But, agree or not, they always
make me think about this art of investing, and that's good.
I will add, that I read every post in this group, and the information
and insight of all the posters has been very helpful to my education,
and I hope everyone keeps up the postings. =20

:: I have posted some occasional "market comments" spiels with little =
feedback
:: so far. I realize I have a somewhat warped view as a =
broker/investor/back
:: office-order entry flunkie, but would be interested in knowing if (a) =
I am
:: wasting your time and space in your inbox or (b) I'm doing anyone any =
good
:: at least in educating and presenting a different (often contrarian) =
point
:: of view.=20
::=20

------------------------------

Date: Tue, 10 Dec 1996 23:38:41 -0500
From: Michael A Langston <[e-mail]>
Subject: re: [CANSLIM] My market comments postings

> Feedback welcome, advice/suggestions will be honestly considered.

just keep calling em like you see em tom, i appreciate the
time you take to post

mike

------------------------------

Date: Wed, 11 Dec 1996 06:15:30 -0500
From: "tom worley" <[e-mail]>
Subject: Re: [CANSLIM] HDCO and stuff

When you place an order of any kind (buy, sell, buy or sell limit, stop,
short sell) on a listed security, whether it is a day or GTC, most firms
will put that order on an exchange somewhere so it can be represented and
executed. I have heard that a lot of discount firms will put the order on
the Third market, Midwest exchange, Pacific exchange, etc rather than on
the primary mkt (NYSE, AMEX). In those cases, the true specialist (who will
likely have the greatest order flow and volume) may not be aware of your
specific order, but will be aware of others who may have chosen a similiar
limit to yours. This is one reason why I never use a whole dollar limit
(try to buy at 1/8 or sell at 7/8) to stay a step away from the pack.
The type of manipulation I described, and saw at least twice on Diana, is
not a common occurrence. Most stocks will never have it happen. Remember,
the specialist, among other things, is charged with maintaining an "orderly
market". If caught doing this, he would be out of business.
Don't worry about the security of your order, at least until your name
ranks in influence with Greenspan, Trump, Gates (hope GATE rebounds today,
will see), and a whole bunch of others where their buy or sell actions, if
known, would influence a lot of the "herd mentality". What I am emphasizing
is to avoid the "herd mentality", have your own plan based on logic,
reason, charts, CANSLIM, etc (and not on emotion), then stick to your plan.
Don't let others make your decisions for you. Listen to contrarian
thoughts, but don't let them act for you, use it to challenge and improve
your thinking.

good luck
tom w

- ----------
> From: Zoran Mitrovski <[e-mail]>
> To: [e-mail]
> Cc: Zoran Mitrovski <[e-mail]>
> Subject: Re: [CANSLIM] HDCO and stuff
> Date: Tuesday, December 10, 1996 10:09 PM
>
> Tom wrote:
> ..
> > Second, as to the market being "manipulated" to hit your stops, take
you
> > out, then rally back on up, I must confess to having witnessed this on
more
> > than one occasion when I had just entered a batch of "stop" orders a pt
or
> > two below the mkt.
> ..
> > This is not to say that limit orders are all bad, but showing your hand
to
> > the floor specialist can, in some cases, be costly.
>
> Waidaminit here guys!
> Are you saying that someone out there knows of my STOP order
> when I have placed it? I thought it was strictly confined to the
> domain of my broker (E*Trade in my case), and it only went out
> in public when it was sent to be executed.

------------------------------

Date: Wed, 11 Dec 1996 06:02:19 -0500
From: "tom worley" <[e-mail]>
Subject: Re: [CANSLIM] SGMA (Sigmatron)

Zoran, I'm really not trying to play with your head, so far you are making
better choices than me. That's why I said "I" would be inclined to day
trade. Sometimes a quick hitandrun profit is a good confidence builder, as
well as an asset builder. Monday's 85 pt gain on the Dow 30, as well as the
strength in NASDAQ, was no surprise to me. Once again we also had the
opportunity to see how Japan did Sun nite and Europe mon morning before our
mkt opened. Yesterday's strength was good to see, however I did not
anticipate the almost total selloff in the late afternoon. Once again, I
strongly suspect computer driven sell programs for most of it (of course,
they may have also created the run up). Point is, the mkt is still not
behaving real predictably. If a particular stock, however, behaves as you
expect, then stay with your game plan. Just remember each stock, and each
day, is a new one. Just because HDCO did so well after you sold for a nice
profit doesn't mean the next one will follow the same pattern.
Good luck
tom w

- ----------
> From: Zoran Mitrovski <[e-mail]>
> To: [e-mail]
> Cc: Zoran Mitrovski <[e-mail]>
> Subject: Re: [CANSLIM] SGMA (Sigmatron)
> Date: Tuesday, December 10, 1996 9:52 PM
>
> Tom wrote:
>
> > Personally, this tech mkt is so volatile that I would be inclined to
day
> > trade.
>
> Tom, why are you doing this to me? Is your heart made of stone?
> The moment I make a commitment to myself to hold a stock for
> more than two days you say that I should sell the damn thing. ;^)
> Do you know what that can do to a novice investor/speculator's
> mind and future development? ;^)

------------------------------

Date: Wed, 11 Dec 1996 06:29:34 -0500
From: "tom worley" <[e-mail]>
Subject: [CANSLIM] Fw: North Pole Report

It's often hard to find humor in the market, but I enjoyed this one I
snagged from another group.
enjoy
tom w

- ----------
> Subject:       FW: North Pole Report
> Date:          Tue, 10 Dec 1996 20:13:46 -0800
>
> BIG NEWS FROM NORTH POLE
>
> Christmas cutbacks
>
>      The recent announcement that Donner and Blitzen have elected to take
> the early reindeer retirement package has triggered a good deal of
concern
> about whether they will be replaced, and about other restructuring
decisions
> at the North Pole.  Streamlining was required due to the North Pole's
loss of
> dominance in the season's gift distribution business.  Home shopping
channels
> and mail order catalogues have diminished Santa's market share.  He could
not
> sit idly by and permit further erosion of the profit picture.
>
>      The reindeer downsizing was made possible through the purchase of a
> late model Japanese sled for the CEO's annual trip.  Improved
productivity
> from Dasher and Dancer, who summered at the Harvard Business School, is
> anticipated.  Reduction in reindeer will also lessen airborne
environmental
> emissions for which the North Pole has received unfavorable press.
>
>      I am pleased to inform you that Rudolph's role will not be
disturbed.
>  Tradition still counts for something at the North Pole.  Management
denies,
> in the strongest possible language, the earlier leak that Rudolph's nose
got
> that way, not from the cold, but from substance abuse.  Calling Rudolph
"a
> lush who was into the sauce and never did pull his share of the load" was
an
> unfortunate comment, made by one of Santa's helpers and taken out of
context
> at a time of year when he is known to be under executive stress.
>
>      As a further restructuring, today's global challenges require the
North
> Pole to continue to look for better, more competitive steps.  Effective
> immediately, the following economy measures are to take place in the
"Twelve
> Days of Christmas" subsidiary:
>
>      - The partridge will be retained, but the pear tree never turned out
to
> be the cash crop forecasted.  It will be replaced by a permanent
synthetic tree,
> providing considerable savings in maintenance;
>
>      - The two turtle doves represent a redundancy that is simply not
cost
> effective. In addition, their romance during working hours could not be
> condoned.
> The positions are therefore eliminated;
>
>      - The three French hens will remain intact.  After all, everyone
loves
> the French. However, as the current hens retire, we may opt for reducing
the
> number of hens, as their only real function is PR;
>
>      - The four calling birds were replaced by an automated voice mail
> system, with a call waiting option.  An analysis is underway to determine
who
> the
> birds have been calling, how often and how long they talked;
>
>      - The five golden rings have been put on hold by the Board of
Directors.
>        Maintaining a portfolio based on one commodity could have negative

>        implications for institutional investors.  Diversification into
other
> precious metals
>        as well as a mix of T-Bills and high technology stocks appear to
be in
> order;
>
>      - The six geese-a-laying constitutes a luxury which can no longer be
> afforded. It has long been felt that the production rate of one egg per
goose
> per
> day is an example of the decline in productivity.  Three geese will be
let go,
> and an upgrading in the selection procedure by personnel will assure
> management that from now on every goose it gets will be more productive;
>
>      - The seven swans-a-swimming is obviously a number chosen in better
> times.  The function is primarily decorative.  Robotic swans are on
order.
> Plus our IS department can program the new swans to be more active during
peak
> viewing times. The current swans will be retrained to learn some new
strokes
> and therefore enhance their outplacement;
>
>      - As you know, the eight maids-a-milking concept has been under
heavy
> scrutiny by the EEOC.  A male/female balance in the workforce is being
sought.
> The more militant maids consider this a dead-end job with no upward
> mobility. Automation of the process may permit the maids to try
a-mending,
> a-mentoring or a-mulching;
>
>      - Nine ladies dancing has always been an odd number.  This function
will
> be phased out as these individuals grow older and can no longer do the
> steps. Also research has shown the current staff is not up to speed with
the
> popular dance routines and unwilling to retrain;
>
>      - Ten Lords-a-leaping is overkill.  The high cost of Lords plus the
> expense of international air travel prompted the Compensation Committee
to
> suggest replacing this group with ten out-of-work congressmen.  While
leaping
> ability may be somewhat sacrificed, the savings are significant because
we
> expect an oversupply of unemployed congressmen this year;
>
>      - Eleven pipers piping and twelve drummers drumming is a simple case
of
> the band getting too big.  A substitution with a string quartet or even a
> one person band with a synthesizer, a cutback on new music and no
uniforms will
> produce savings which will drop right down to the bottom line;
>
>      We can expect a substantial reduction in assorted people, fowl,
animals
> and  other expenses.  Though incomplete, studies indicate that stretching

> deliveries over twelve days is inefficient.  If we can drop ship in one
day,
> service levels will be improved.
>
>      Regarding the lawsuit filed by the attorney's association seeking
> expansion to include the legal profession ("thirteen lawyers-a-suing")
action
> is pending and our legal department assures us we are on solid ground.
>
>      Lastly, it is not beyond consideration that deeper cuts may be
necessary
> in the future to stay competitive.  Should that happen, the Board will
> request management to scrutinize the Snow White Division to see if seven
> dwarfs is the right number.
>
> Happy Holidays,
> Murf
> - - - - -
>
>
>
> Larry Click   [e-mail]

------------------------------

End of canslim Digest V1 #21
****************************

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