THE NEXT LIST ARE STOCKS WITHIN 10% OF THEIR HIGH ONLY.
ADACLABS ADAC
ANADIGICS ANAD
ANALYSISINT ANLY
ANALOGIC CP ALOG
BCBFINL BCBF
BANPONCECP BPOP
BOOLE & BABGE BOOL
CACI INTL INC CACI
CAMERON ASH CABP
COMWITH BCP CMSB
CONSOL GRPHC COGI
DAWSONPRO DPSI
DURA ATMTV DRRA
ERICSSON ADR ERICY
FIRST ALLIANCE FACO
FIRST MUTAL SVG FMSB
PLEASE CHECK YOUR CHARTS FOR FURTHER INFO.
Lehman Dennis
p006601b@pbfreenet.seflin.lib.fl.us
------------------------------
From: Craig Griffin <cagriffin@mindspring.com>
Date: Tue, 21 Jan 1997 10:42:44 -0500
Subject: [CANSLIM] Quicksand and Market Comments
Tom,
Nothing at all wrong with missing a call. Everybody does it, and the fact
that you have missed one only proves that you are human :^). Heck, if you
read my analysis of individual stocks the last couple of days, you'll notice
some of the ones I was leary of, like NVLS, did the best yesterday.
(And thanks for the kind words last month when I called for a market top and
the DOW turned around and soared two days later.)
On another note ...
At 08:30 PM 1/20/97 -0500, you wrote:
> I was right on one point in stating that I see NASDAQ as stronger
> right now than NYSE. That was clearly demonstrated today.
(The following is inspired by the above snippet and also by your "Market
Comments" email that you sent out last night.)
Indeed. And that DOW 7000 call might as well have been achieved now with the
Dow's intraday high of 6893 yesterday. I have been amazed by the power of
this market. These high volume days (even on a market semi-holiday like
Monday), coupled with pretty good up moves in many of the leaders has me
convinced for now, this old bull is still snorting. CSCO and ASND broke out
in the last week, but they look a little tired coming out of their bases.
ATML looks like it may become one of the newer "warrior stocks" with a
strong b/o (like DELL has become in the last year or two). Of course some
of the other old warriors kicked off the current up leg back in the summer
and early fall (INTC, MSFT, DELL) in sync with the DOW.
To paraphrase one of your Mkt Comments, the "young colts" that are ready to
sprint should be coming out of the chutes now on a regular basis for a while
as the NASDAQ shows the strength you mentioned and (hopefully) leads the DOW
rather than trailing it. The young colts are those smaller companies like
KEG, TLGD, ORBKF, LSBX, SNSR, and dozens of other CANSLIM candidates who
have yet to prove themselves over the long haul. Most of them will not make
it over the longer term, but some of those that don't will have a couple of
good rides in them for 30% or so. A few of them will become long term
growers and market leaders like those mentioned in the previous paragraph.
One thing I would like learn is to pick up one of those CSCO's or ASND's, in
the early to mid part of its life cycle, and then manage to hold it for the
long haul (the 10 bagger grail). Anyone out there good at this, it would be
great to hear how you apply selling rules to enable a longer term hold, and
yet not get stuck holding on to "dead money" for a year or more.
Best regards,
Craig
------------------------------
From: Lehman Dennis <p006601b@pb.seflin.org>
Date: Tue, 21 Jan 1997 17:00:43 -0500 (EST)
Subject: [CANSLIM] results of 10% of high with +50% volume
mask +1/4
andp +1/8
capf 0
ebay +3/8
The more I test Mr o'Neals book, the I become a believer.
q
x
Lehman Dennis
p006601b@pbfreenet.seflin.lib.fl.us
------------------------------
From: Zoran Mitrovski <zmitrov@ee.rochester.edu>
Date: Tue, 21 Jan 1997 18:18:33 -0500 (EST)
Subject: Re: [CANSLIM] results of 10% of high with +50% volume
Lehman wrote:
> mask +1/4
> andp +1/8
> capf 0
> ebay +3/8
>
> The more I test Mr o'Neals book, the I become a believer.
Lehman, do they charge your email account by the number of
characters you send out? ;^)
> q
> x
> Lehman Dennis
> p006601b@pbfreenet.seflin.lib.fl.us
Cheers,
Zoran
------------------------------
From: OWENTIME@delphi.com
Date: Wed, 22 Jan 1997 01:14:46 -0500 (EST)
Subject: [CANSLIM] Quick Sand and Indicators from CANSLIM?
=================================
Craig:
"... learn is to pick up one of those CSCO's or ASND's, in
the early to mid part of its life cycle, and then manage to hold it for the long haul (the 10 bagger grail)..,
yet not get stuck holding on to "dead money" for a year or more."
Best regards,
Craig
- ---------------------------------
Predicting the "END of the CYCLE" as in IBD today
Warren:
IMO distant quick sand was spotted in today's IBD January 21,1997 regarding
tired market conditions due for the major correction to
separate dead money from working money.
Front page article profiled simplified market crumbling indicators:
Rise in stock splits (current new record @ five -year high) of
171 splits, not dissimilar to June '87 record high of 169 splits before the crash of '87.
Same indicators were highlighted for June '92 indication of a "peak"
with the market soon after growing weak. These statistics on highs for splits occurred with ample 3-4 months shepherd profits in all cases, so maybe April 15th for a correction??
As a novice, I'm intrigued that they see a split indicating stale stock and
Money magazine chose the chronically split USRX as a prime choice to be run way up above 100 this year; 99 57 B +61 +92 +108 .71 @74.
Interesting to see if the Utility Market Forecaster of Dow Util. Avg.
against its own 50 week moving avg. drops neg. through 220 in mid Feb.
Comments on split indications for quicksand?
As a novice my question would be if it is wiser to avoid commissions and fees and leave the CANSLIM stocks "put" through such a correction and let them come right back when the DOW rebounds to 8000 by June of this year?
=================================
Other Question:
I keep hearing "too much overhead supply in this stock so I'm not
going to consider it a CANSLIM candidate." Could someone please
explain to me what "too much overhead supply" means? How is it
calculated?
===
Thanks
Warren
------------------------------
From: Zoran Mitrovski <zmitrov@ee.rochester.edu>
Date: Wed, 22 Jan 1997 10:59:24 -0500 (EST)
Subject: Re: [CANSLIM] Quick Sand and Indicators from CANSLIM?
Warren wrote:
> As a novice my question would be if it is wiser to avoid commissions and
> fees and leave the CANSLIM stocks "put" through such a correction and let
> them come right back when the DOW rebounds to 8000 by June of this year?
Warren, here's what another novice such as myself thinks about that.
Nope, it is not wiser at all. What makes you think that the DOW will
rebound to 8000 by June? And if so, why does the DOW need the
correction in the first place, when you are so sure that it's
"proper" valuation for June should be 8000 anyway?
Why don't you just use O'Neil's rules on when to sell?
I would never let commissions (and fees?) enter the equation.
If they play a significant part in your equation then perhaps
you need to reconsider the number of stocks you own relative to
the size of your funds and the brokerage fees.
> =================================
> Other Question:
>
> I keep hearing "too much overhead supply in this stock so I'm not
> going to consider it a CANSLIM candidate." Could someone please
> explain to me what "too much overhead supply" means? How is it
> calculated?
I don't know how it is calculated. I just learn how to see if it's
there at all, and few previous discussions on chart patterns
explained a bit. That's why you need a new high in the price, to
make sure that there is noone there above you all eager to sell
once your stock hits their entry point on its way up.
The way I see it, a "sweet" breakout from a tight base on a new
52 week high assures you of two things:
1. There is noone to provide supply above it.
2. It is too early for the profit takers (such as yourself, that
are on the breakout wagon from it's start) to start thinking
about getting out thus providing supply.
..so on a good run in a bull market like this one, you should be
able to ride 20-30% in just a few days. Beyond that point I
watch the intraday charts and if the volume persist on high levels
while the stock starts drifting down, for me it is a sign that some
people are deciding to take profits, and I become more careful.
I either put a stop below the present value, or if the drift down is
too strong I just get out an look for a new wagon.
That's what I did with HDCO, SGMA and SEMX the past couple of
months. I only got burned by SEMX cause I couldn't follow it
properly from Macedonia. That's why I had a small position in it
to begin with. Oh yeah, I also think that risk management and
position sizes are VERY important and they should match your
comfort levels and your personality. That's why knowing yourself
is a MUST in investing.
> ===
> Thanks
> Warren
Cheers,
Zoran
------------------------------
From: perinvm@ibm.net (Gui.)
Date: Wed, 22 Jan 1997 21:27:20 GMT
Subject: [CANSLIM] "cooked" earning estimates?
On "double bookkeeping of analysts". How analysts often report two
different earnings estimates, one published and one "whispered." I got
this from the Wall Street Journal Jan 16th.:
- -------------------------------------
Traders Ignore the 'Official,'=20
Act on 'Whispered' Estimates=20
By GREG IP=20
Staff Reporter of THE WALL STREET JOURNAL NEW YORK-
- -Take those official earnings estimates with a grain of salt, and
listen for the whisper. In a market obsessed with the earnings
momentum of technology stocks, many traders and analysts are ignoring
published earnings estimates and trading stocks based on whether they
meet or beat the "whisper" earnings that swirl among traders and
investors -- including on the Internet--ahead of the official earnings
report. The question is:
Are small investors unfairly out of the loop?
- ------------<cut>---------------------
"The whisper ... becomes in effect more important than the published
number," he said. "The whisper is increasingly becoming the true
expectation. " Though there are various explanations for the origin of
whispers, there is general agreement they are the byproduct of
investors' obsession with earnings momentum. Technology stocks in
particular are driven up based on their ability to regularly increase
earnings more than expected. Larger, more stable companies surprise
more rarely. So who should pay any attention to all those "official"
estimates? And why should analysts bother to publish official
estimates that they believe are off the mark?
Stock Is Downgraded.
Drew Peck, an analyst at Cowen & Co., is a
case in point. Mr. Peck's official estimate had pegged Intel's
earnings at $1.85 a share, in line with Wall Street's consensus.
Wednesday, after Intel reported much stronger results, Mr. Peck
downgraded the stock from strong buy to buy, citing a reversal of
momentum. He said that had Intel posted earnings of less than $2 a
share, "this stock would have gotten killed." Mr. Peck acknowledged in
an interview Wednesday that although he thought the company would beat
his estimate, he saw no point in changing it because most investors
knew the whisper number and were discounting it. The focus,
he said, is now on the year ahead. "Once the quarter is over, I never
bother changing estimates. At that point, you're trying to fine-tune
it Once a quarter is finished and the stock is discounting an estimate
you know is higher than your printed estimate, it's no longer
relevant," he said. Intel shrugs off the whisper estimates as
something beyond its control. "When we try to do our guesstimates of
whether people are going to receive a message positively or negatively
... the message has to be driven by the facts," said an Intel
spokesman. "You can't change the facts based on the whisper or rumor
mill." That analysts sometimes leave their estimates unchanged even
when they believe they are low unsettles some. "Intellectually I say
to myself, if they really think [earnings will be different], they
should say it," said George Novello, managing director and
manager of Smith Barney's Special Equities Portfolio. Given that
whisper numbers are known by market professionals but not the public
at large, "I almost think it's unethical." John Markese, president of
the American Association of Individual Investors, said analysts
shouldn't print one number and tell clients another. Small investors
are generally "out of that loop." But he said they aren't necessarily
losing out as a result. "If whisper numbers were more accurate than
the consensus, I'd say it's to their disadvantage. But we haven't
proven that," he said.=20
- -------------End of Quote---------------
There is some more but I refrain from copying it here since it is not
really a CANSLIM matter.
Gui M.
------------------------------
From: Craig Griffin <cagriffin@mindspring.com>
Date: Wed, 22 Jan 1997 23:37:31 -0500
Subject: [CANSLIM] Whisper estimates
Gui,
Thanks for the post. I found it interesting. But it is nothing new. Has
been the same for years. Lots of the smaller stocks are followed by only
one or two analysts. It seems that many of them only update their reports
once a year. So the situation can change radically, and long after the news
is out the analyst will hustle to talk to the company and update his numbers.
This relates directly to CANSLIM in the following way: by buying breakouts
with strong volume, the CANSLIM'r doesn't need to be in the whisper loop.
The "inside information/non-published information" shows up in the price/vol
action of the stock. This is the beauty of CANSLIM. O'Neil only suggests
that the earnings estimates must be positive for the coming year and that
the prior 3 qtrs must show growth and that the prior 5 years show growth
every year, from one year to the next. He does NOT attempt to correlate the
price of the stock to the next quarter's estimates or to the PE. So CANSLIM
only requires that you know in general that you have a strong and growing
company. The breakout in the stock price will generally tell you if the
earnings will be good enough to satisfy the rest of the investment
community. Or if the breakout comes sometime after the earnings are
released, so much the better. If the stock is not in a base around the time
of earnings, then it must be on a run (if it was falling you would have
probably been stopped out). In the case where it is on a run, the old base
will give support if the earnings are terrible, giving one time to sell and
perhaps salvage some profit. In the case of a stock like IBM, if you bought
the last breakout, somewhere around $130 or $140, today's drop may make you
wince but you would still be sitting with a 10-20% profit tonight while you
