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canslim-digest       Thursday, November 25 1999       Volume 02 : Number 752



In this issue:

       Re: [CANSLIM] Happy Thanksgiving
       Re: [CANSLIM] Breakouts on High Volume
       Re: [CANSLIM] Selling Rules
       Re: [CANSLIM] CANSLIM Screening Approach Question
       [CANSLIM] Gee, thanks...
       Re: [CANSLIM] Fw: My Move
       [none]
       Re: [CANSLIM] Selling Rules
       [CANSLIM] Is the Nasdaq advance too narrow?
       Re: [CANSLIM] Is the Nasdaq advance too narrow?
       Re: [CANSLIM] Is the Nasdaq advance too narrow?
       Re: [CANSLIM] CANSLIM Screening Approach Question
       Re: [CANSLIM] Selling Rules
       Re: [CANSLIM] Is the Nasdaq advance too narrow?
       Re: [CANSLIM] VARL Article
       Re: [CANSLIM] Selling Rules

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

Date: Wed, 24 Nov 1999 01:19:03 -0500
From: inderjit singh <[e-mail]>
Subject: Re: [CANSLIM] Happy Thanksgiving

How would you like to have: baked or roasted?

David Reid wrote:

> thankyou and same to you
>
> ps
> nice turkey
>
> ----- Original Message -----
> From: Surindra J. Singh <[e-mail]>
> To: <[e-mail]>
> Sent: Tuesday, November 23, 1999 12:49 PM
> Subject: [CANSLIM] Happy Thanksgiving
>
> >
> >
> > Happy Thanksgiving
> >
> >
> >
> >
> >                  ,+*^^*+___+++_
> >                         ,*^^^^              )
> >                      _+*                     ^**+_
> >                    +^       _ _++*+_+++_,         )
> >        _+^^*+_    (     ,+*^ ^          \+_        )
> >       {       )  (    ,(    ,_+--+--,      ^)      ^\
> >      { (@)    } f   ,(  ,+-^ __*_*_  ^^\_   ^\       )
> >     {:;-/    (_+*-+^^^^^+*+*<_ _++_)_    )    )      /
> >    ( /  (    (        ,___    ^*+_+* )   <    <      \
> >     U _/     )    *--<  ) ^\-----++__)   )    )       )
> >      (      )  _(^)^^))  )  )\^^^^^))^*+/    /       /
> >    (      /  (_))_^)) )  )  ))^^^^^))^^^)__/     +^^
> >   (     ,/    (^))^))  )  ) ))^^^^^^^))^^)       _)
> >    *+__+*       (_))^)  ) ) ))^^^^^^))^^^^^)____*^
> >    \             \_)^)_)) ))^^^^^^^^^^))^^^^)
> >     (_             ^\__^^^^^^^^^^^^))^^^^^^^)
> >       ^\___            ^\__^^^^^^))^^^^^^^^)\\
> >            ^^^^^\uuu/^^\uuu/^^^^\^\^\^\^\^\^\^\
> >               ___) >____) >___   ^\_\_\_\_\_\_\)
> >              ^^^//\\_^^//\\_^       ^(\_\_\_\)
> >                ^^^ ^^ ^^^ ^^
> >
> >
> > -
> >
> >
>
> -


- -

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

Date: Wed, 24 Nov 1999 01:28:04 -0500
From: "Tom Worley" <[e-mail]>
Subject: Re: [CANSLIM] Breakouts on High Volume

In response to your item # 3, I would caution that the last
50 trading days are hardly characteristic of the longer
trends in the marketplace.  In addition to abating a lot of
fears, and three rate hikes by the Feds, we have also
entered into the time period when lot's of investors are
either receiving their annual bonuses, or at least finding
out how large they will be (thus more willing to part with
savings or other hoarded cash). We also have been seeing a
virtually limitless amount of cash trapped on the sidelines,
now rushing in to catch at least some part of this recovery.
We have also seen an abundance of IPOs opening at nice
premiums, some brought by smaller houses where the
individual investor may have actually had a chance to
participate.

The overall major recovery in the past two months has
created a lot of "instant wealth" for those smart enough to
have bailed out early in the correction, much of which is
being plowed right back in again with other issues, thereby
fueling a continued string of gains, and new records both on
price and volume.

Try opening up the time period to a year, or even two years,
and see what differences you get in the results.  Also pick
a 50 day or so period when the markets were in a continuous
downtrend, and check those results as well. Could be
educational for all of us. You could also use the "mutual
fund" rule of three year performance.

Tom Worley
[e-mail]
chat with me at ICQ # 5568838
get ICQ software at http://www.icq.com/icqhomepage.html


- -----Original Message-----
From: rolatzi <[e-mail]>
To: [e-mail] <[e-mail]>
Date: Tuesday, November 23, 1999 1:06 PM
Subject: [CANSLIM] Breakouts on High Volume


I have done a cursory analysis of the data i culled.
I didn't look for canslim breakouts, but the following:
1.  new highs in the last 50 days
2.  volume increases of at least 5x over the adv for last
50d
3   qrs > 80.

Dave's instincts were in fact very good.  I have summarized
the
results as follows:

Vol   Inc in price between high vol day and
Inc.    d+10    d+20    d+30    d-50
>5 0.91 0.93 0.91 1.93
>10 0.88 0.94 0.93 2.25
>20 0.85 0.92 0.88 2.81
>30 0.83 0.88 0.82 3.36
>40 0.80 0.83 0.83 3.74

So, the higher the volume increase the more the price is
depressed.  Also, the greater the increase in price prior to
the
high volume day, the greater the volume increase.  This
suggests
that the really big run ups are the stocks that show the
biggest
volume increases.  Also, note that within 10 days of the
break
out, the move is complete.

Some ideas to further test might include,
1.  how much of a break out is there on the high volume day?
2.  what kind of pattern is the stock making?  This is a
little
bit harder to program in.
3.  Any other ideas could be readily tested if they can be
quantitated easily.
Ciao,
rolatzi
__________________________________________________
Do You Yahoo!?
Bid and sell for free at http://auctions.yahoo.com

- -



- -

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

Date: Wed, 24 Nov 1999 01:35:43 -0500
From: "Tom Worley" <[e-mail]>
Subject: Re: [CANSLIM] Selling Rules

Hi Harry,

WON pats himself on the back for having more selling rules
than buying rules, which is admittedly much different from
many sources that only have buy rules or a lot of buy rules
and very few rules on when to exit.  WON stresses protecting
your capital, whether it is your initial money or subsequent
profits.

Better to save your capital and live to play another day
than to lose so much you retire from the game entirely.
Simple selling rules just create too many reasons to hang on
in a downtrend.

Tom Worley
[e-mail]
chat with me at ICQ # 5568838
get ICQ software at http://www.icq.com/icqhomepage.html


- -----Original Message-----
From: Harry Yang <[e-mail]>
To: [e-mail] <[e-mail]>
Date: Tuesday, November 23, 1999 3:30 PM
Subject: [CANSLIM] Selling Rules


hi there,

WON defines a very clear buying point. However he doesn't
give us
a clear selling point. Even the book gives over 20 selling
rules. I like
CANSLIM because of its simple and straight strategy. But it
sounds to have
difficulity to form a simple and straight selling strategy.
Any suggestion
there?

Harry

______________________________________________________
Get Your Private, Free Email at http://www.hotmail.com

- -



- -

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

Date: Wed, 24 Nov 1999 07:27:52 -0600
From: Dave Cameron <[e-mail]>
Subject: Re: [CANSLIM] CANSLIM Screening Approach Question

I agree with Tim - we were talking about one-time volume spikes.
When stocks get added to an index, their volume tends to stay
at a higher level.

Dave


Earl Setser wrote:
>
> I own a couple of stocks that exhibited this level of volume after getting
> added to an index (i.e. S&P 500).  Would you consider this a bad sign also,
> or would this be an exception?
>
> At 09:06 PM 11/22/99 -0600, you wrote:
> >Tim Fisher wrote:
> >>
> >> Dave, do you mean blowoff volume? If you do, how do you recognize a blowoff
> >> top from a bona fide blowout? Doesn't it relate to the rapidity of the
> >> march up, extension from the base, etc? Personally if the stock is just
> >> making a new high or breaking through resistance on the way to a new high
> >> off a decent base, I love to see 3x to 10x daily volume. These type of
> >> breakouts are usually the most stable in my experience - i.e. it's tough to
> >> trade down below the breakout point when you have a big clot of new holders
> >> at that price.
> >
> >Actually I agree totally on the blowoff top comments.   What I meant by
> >blowout volume is volume that is 10x daily average or more.   I've found
> >that when volume is THAT high - that the stock tends not to advance any
> >more.   I have a theory that its the concept "everyone who would be willing
> >to buy just bought - hence no more available buyers".   My best successes
> >have been breakouts from a long base with volume in the 2x to 5x range.
> >
> >Dave
> >
> >[e-mail]
> >
> >-
> >
> >
> >
>
> -

- -

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

Date: Wed, 24 Nov 1999 07:33:57 -0600
From: Dave Cameron <[e-mail]>
Subject: [CANSLIM] Gee, thanks...

Rolatzi,

Thanks for the analysis.   As someone else (Tim?) pointed out,
its tough to re-create whether the stock was in a base, in
a C-and-H or whatever prior to the high volume day.   So, one
can't say that after a stock advanced on high volume, the
expected gains are negative.   But there is evidence that
one must be careful.  I do still think that your work
supports my findings that too much volume on a breakout
is a bad thing.   One wants high volume, but not too high.

Dave

- -

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

Date: Wed, 24 Nov 1999 09:30:59 +0100
From: Johan Van Houtven <[e-mail]>
Subject: Re: [CANSLIM] Fw: My Move

At 08:02 PM 23-11-99 -0600, you wrote:
>Hi all,
>
>Here is an update from Marder for those who might not have seen it.
>Tradehard just got much more useful!
>
>DSquires

Dave,

Thanks for the heads up.

Have you used Tradehard.com in the past? If so, what do you think of it?

Regards,




- -- Johan



- -

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

Date: Wed, 24 Nov 1999 10:36:29 -0700
From: [e-mail]
Subject: [none]

[207.69.14.117])
        by smtp10.atl.mindspring.net (8.9.3/8.8.5) with SMTP id MAA28626
        for <[e-mail]>; Wed, 24 Nov 1999 12:19:12 -0500
(EST)
Message-ID: <002001bf36a8$5a245780$750e45cf@oemcomputer>
From: "David Squires" <[e-mail]>
To: <[e-mail]>
References: <[e-mail]>
Subject: Tradehard
Date: Wed, 24 Nov 1999 12:18:34 -0600
MIME-Version: 1.0
Content-Type: text/plain;
        charset="iso-8859-1"
Content-Transfer-Encoding: 7bit
X-Priority: 3
X-MSMail-Priority: Normal
X-Mailer: Microsoft Outlook Express 5.00.2014.211
X-MimeOLE: Produced By Microsoft MimeOLE V5.00.2014.211

Johan,

Yes, I have but don't right now. I found it somewhat useful but it was
geared more towards day traders and I mostly position trade so it was not
great for my purposes. However, there are some very smart traders on that
site. I think the Marder stuff is worth ten bucks and I will probably
subscribe. He has been an excellent confirming indicator for me.

Regards,
Dave

- ----- Original Message -----
From: Johan Van Houtven <[e-mail]>
To: <[e-mail]>
Sent: Wednesday, November 24, 1999 2:30 AM
Subject: Re: [CANSLIM] Fw: My Move

> At 08:02 PM 23-11-99 -0600, you wrote:
> >Hi all,
> >
> >Here is an update from Marder for those who might not have seen it.
> >Tradehard just got much more useful!
> >
> >DSquires
>
> Dave,
>
> Thanks for the heads up.
>
> Have you used Tradehard.com in the past? If so, what do you think of it?
>
> Regards,
>
>
>
>
> -- Johan
>
>
>
> -
>

- -

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

Date: Wed, 24 Nov 1999 11:29:46 PST
From: "Harry Yang" <[e-mail]>
Subject: Re: [CANSLIM] Selling Rules

Hi there,

Simple selling rules could create too many reasons to hang on
in a downtrend, since people will interpret it in different ways.
But if this simple rules have clear and straight definition,
people won't have a chance to alter them. Like the stop loss rule.
It is very clear and straight. After you have your version, whatever
it is 7% or 3xATR, it could be measured clearly. And you stick with
it, you won't have a chance to miss it. I believe in this part,
most of people just can't stick with it and they failed.

However too many rules could make things more complex and leave
much bigger space to let people imagine or interpret these rules.
And this, believe or not, will not protect any capital, since when
it could not be measured, you can interpret it whatever you want.
And if you can't stick with it, the rules are meaningless.

So I am looking for a set of simple, straight and measurable rules
which I can stick with. So far, I didn't find it. Anyone has better
situation then me?

Harry

- --- Tom Worley <[e-mail]> wrote:
>Hi Harry,
>
>WON pats himself on the back for having more selling rules
>than buying rules, which is admittedly much different from
>many sources that only have buy rules or a lot of buy rules
>and very few rules on when to exit.  WON stresses protecting
>your capital, whether it is your initial money or subsequent
>profits.
>
>Better to save your capital and live to play another day
>than to lose so much you retire from the game entirely.
>Simple selling rules just create too many reasons to hang on
>in a downtrend.
>
>Tom Worley
>[e-mail]
>chat with me at ICQ # 5568838
>get ICQ software at http://www.icq.com/icqhomepage.html
>
>
>-----Original Message-----
>From: Harry Yang <[e-mail]>
>To: [e-mail] <[e-mail]>
>Date: Tuesday, November 23, 1999 3:30 PM
>Subject: [CANSLIM] Selling Rules
>
>
>hi there,
>
>WON defines a very clear buying point. However he doesn't
>give us
>a clear selling point. Even the book gives over 20 selling
>rules. I like
>CANSLIM because of its simple and straight strategy. But it
>sounds to have
>difficulity to form a simple and straight selling strategy.
>Any suggestion
>there?
>
>Harry
>
>______________________________________________________
>Get Your Private, Free Email at http://www.hotmail.com
>
>-
>
>
>
>-
>
>

______________________________________________________
Get Your Private, Free Email at http://www.hotmail.com

- -

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

Date: Wed, 24 Nov 1999 15:19:33 -0800
From: "David Reid" <[e-mail]>
Subject: [CANSLIM] Is the Nasdaq advance too narrow?

It seems the A\D Line is in shreds also the New high New lows is not
confirming this advance..

I am of the opinion we are going to have a sharp year end correction in the
NASDAQ soon..

any other opinions are appreciated

David
[e-mail]



- -

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

Date: Wed, 24 Nov 1999 13:09:52 -0800 (PST)
From: Anindo Majumdar <[e-mail]>
Subject: Re: [CANSLIM] Is the Nasdaq advance too narrow?

 The A/D line reached its peak in April 1998. If the declineing A/D line
kept you out you have missed one of the biggest bull runs in this bull
market.

Anindo
>
> It seems the A\D Line is in shreds also the New high New lows is not
> confirming this advance..
>
> I am of the opinion we are going to have a sharp year end correction in the
> NASDAQ soon..
>
> any other opinions are appreciated
>
> David
> [e-mail]
>
>
>
> -
>
>
>


- -

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

Date: Wed, 24 Nov 1999 16:28:17 -0800
From: "David Reid" <[e-mail]>
Subject: Re: [CANSLIM] Is the Nasdaq advance too narrow?

did I say I had been out of the market??

NO

just posing a question for the group
sorry for asking

[e-mail]

- ----- Original Message -----
From: Anindo Majumdar <[e-mail]>
To: <[e-mail]>
Sent: Wednesday, November 24, 1999 1:09 PM
Subject: Re: [CANSLIM] Is the Nasdaq advance too narrow?


> The A/D line reached its peak in April 1998. If the declineing A/D line
> kept you out you have missed one of the biggest bull runs in this bull
> market.
>
> Anindo
> >
> > It seems the A\D Line is in shreds also the New high New lows is not
> > confirming this advance..
> >
> > I am of the opinion we are going to have a sharp year end correction in
the
> > NASDAQ soon..
> >
> > any other opinions are appreciated
> >
> > David
> > [e-mail]
> >
> >
> >
> > -
> >
> >
> >
>
>
> -
>
>


- -

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

Date: Wed, 24 Nov 1999 17:49:00 -0800
From: Earl Setser <[e-mail]>
Subject: Re: [CANSLIM] CANSLIM Screening Approach Question

No, I was referring to one day spikes.  Two examples are XLNX and CMVT.
Both have been added to the S&P 500, and that day was 5X-10X ADV.  I was
thinking that this would an exception to the strong volume rule.  I'm
certainly glad I held CMVT after that day!!

 At 06:50 PM 11/23/99 -0800, you wrote:
>I just observed that today as I was looking for a place to put my ALTR
>cash. I was scared by the volume increase but noticed it kept up. I.e. the
>high volume is continuing a week after they were added. I was referring to
>one-time volume spikes, which I think is a different situation.
>
>At 06:25 PM 11/23/99 -0800, you wrote:
>>I own a couple of stocks that exhibited this level of volume after getting
>>added to an index (i.e. S&P 500).  Would you consider this a bad sign also,
>>or would this be an exception?
>>
>>At 09:06 PM 11/22/99 -0600, you wrote:
>> >Tim Fisher wrote:
>> >>
>> >> Dave, do you mean blowoff volume? If you do, how do you recognize a
>> blowoff
>> >> top from a bona fide blowout? Doesn't it relate to the rapidity of the
>> >> march up, extension from the base, etc? Personally if the stock is just
>> >> making a new high or breaking through resistance on the way to a new
high
>> >> off a decent base, I love to see 3x to 10x daily volume. These type of
>> >> breakouts are usually the most stable in my experience - i.e. it's
>> tough to
>> >> trade down below the breakout point when you have a big clot of new
>> holders
>> >> at that price.
>> >
>> >Actually I agree totally on the blowoff top comments.   What I meant by
>> >blowout volume is volume that is 10x daily average or more.   I've found
>> >that when volume is THAT high - that the stock tends not to advance any
>> >more.   I have a theory that its the concept "everyone who would be
willing
>> >to buy just bought - hence no more available buyers".   My best successes
>> >have been breakouts from a long base with volume in the 2x to 5x range.
>> >
>> >Dave
>> >
>> >[e-mail]
>> >
>> >-
>> >
>> >
>> >
>>
>>
>>-
>
>Tim Fisher, 1995 President, Pacific Fishery Biologists
>Ore-ROCK-On Rockhounding Web Site
>PFB Information
>mailto:[e-mail]
>WWW http://OreRockOn.com
>
>
>-
>
>
>


- -

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

Date: Wed, 24 Nov 1999 18:15:22 -0800
From: Earl Setser <[e-mail]>
Subject: Re: [CANSLIM] Selling Rules

As you've seen, Harry, I'm also struggling with the best way to stay in the
good stocks and escape from the real turns.  A friend and I have been
working with CANSLIM since spring, and our list of stocks (that we've been
stopped out of) reads like a list of who's hot in the market:  SDLI, THQI,
CREE, CMVT (I've held, he didn't), RFMD, etc.

To further agree with your opinion of WON's "sell rules", I grabbed HTMMIS.
 The "rules" include the following terms:

"watch out if" - not sell, but watch out?
"In many instances, the stock should be sold" - doesn't define which instances
"consider selling if ..." used in numerous descriptions
"Be careful on selling if"
"Try to avoid selling if"
"You may occasionally want to sell if"
"In a few cases, you should sell if.."
"In some cases, sell if a stock"

and my personal favorite
"Sell quickly before it becomes completely clear that a stock should be sold"

I don't want to be too critical of WON, but these are hardly clear rules.
They seem to be a list of reminders of mistakes or lessons learned over
many years.  It's not clear to me how to separate many instances, some
cases, occasionally, and a few cases!  Just like you, I get into my own
judgement and emotions, and that's what I've been trying to get away from
with CANSLIM!

Well, the search for the Holy Grail of CANSLIM sell rules continues!!!




At 11:29 AM 11/24/99 PST, you wrote:
>Hi there,
>
>Simple selling rules could create too many reasons to hang on
>in a downtrend, since people will interpret it in different ways.
>But if this simple rules have clear and straight definition,
>people won't have a chance to alter them. Like the stop loss rule.
>It is very clear and straight. After you have your version, whatever
>it is 7% or 3xATR, it could be measured clearly. And you stick with
>it, you won't have a chance to miss it. I believe in this part,
>most of people just can't stick with it and they failed.
>
>However too many rules could make things more complex and leave
>much bigger space to let people imagine or interpret these rules.
>And this, believe or not, will not protect any capital, since when
>it could not be measured, you can interpret it whatever you want.
>And if you can't stick with it, the rules are meaningless.
>
>So I am looking for a set of simple, straight and measurable rules
>which I can stick with. So far, I didn't find it. Anyone has better
>situation then me?
>
>Harry
>
>--- Tom Worley <[e-mail]> wrote:
>>Hi Harry,
>>
>>WON pats himself on the back for having more selling rules
>>than buying rules, which is admittedly much different from
>>many sources that only have buy rules or a lot of buy rules
>>and very few rules on when to exit.  WON stresses protecting
>>your capital, whether it is your initial money or subsequent
>>profits.
>>
>>Better to save your capital and live to play another day
>>than to lose so much you retire from the game entirely.
>>Simple selling rules just create too many reasons to hang on
>>in a downtrend.
>>
>>Tom Worley
>>[e-mail]
>>chat with me at ICQ # 5568838
>>get ICQ software at http://www.icq.com/icqhomepage.html
>>
>>
>>-----Original Message-----
>>From: Harry Yang <[e-mail]>
>>To: [e-mail] <[e-mail]>
>>Date: Tuesday, November 23, 1999 3:30 PM
>>Subject: [CANSLIM] Selling Rules
>>
>>
>>hi there,
>>
>>WON defines a very clear buying point. However he doesn't
>>give us
>>a clear selling point. Even the book gives over 20 selling
>>rules. I like
>>CANSLIM because of its simple and straight strategy. But it
>>sounds to have
>>difficulity to form a simple and straight selling strategy.
>>Any suggestion
>>there?
>>
>>Harry
>>
>>______________________________________________________
>>Get Your Private, Free Email at http://www.hotmail.com
>>
>>-
>>
>>
>>
>>-
>>
>>
>
>______________________________________________________
>Get Your Private, Free Email at http://www.hotmail.com
>
>-
>
>
>


- -

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

Date: Wed, 24 Nov 1999 18:16:45 -0800
From: Earl Setser <[e-mail]>
Subject: Re: [CANSLIM] Is the Nasdaq advance too narrow?

IBD discussed the weakness in the A/D line today, but didn't seem concerned
about it.  They pointed out that the A/D line didn't support much of the
gains made over the last year, so it shouldn't be considered an important
indicator at this point.

At 03:19 PM 11/24/99 -0800, you wrote:
>It seems the A\D Line is in shreds also the New high New lows is not
>confirming this advance..
>
>I am of the opinion we are going to have a sharp year end correction in the
>NASDAQ soon..
>
>any other opinions are appreciated
>
>David
>[e-mail]
>
>
>
>-
>
>
>


- -

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

Date: Wed, 24 Nov 1999 18:19:31 -0800
From: Earl Setser <[e-mail]>
Subject: Re: [CANSLIM] VARL Article

Yes, I didn't get this one, but a co-worker/investor jumped on it in the
14's.  It's done well since then, and was one of very few stocks I looked
at today that was strong.

At 01:42 PM 11/23/99 -0800, you wrote:
>Earl, I think this one was on one of your lists. He missed the boat though
>- it was at 11 two weeks ago. Looks like the pivot was around 12.5.
>
>Stock of the Day
>
>Nov 23, 1999
>
>Vari-L: What's Up Here?
>
>Vari-L (Nasdaq:VARL - news) is a very small electronics company that we've
>been following
>for about two years now. The stock has more than doubled in the last six
>months, and it just
>jumped 17% ($2.38) to $16.50 on nine times average volume Monday. There was
>no news
>specific to Vari-L, but when a company's market cap is less than $100
>million, all it takes is a
>little interest from Wall Street and institutional investors to get things
>cooking.
>
>Vari-L is not exactly a household name, but its customers certainly are. It
>supplies components to
>most of the heavy hitters in wireless communications including Lucent
>(NYSE:LU - news) ,
>Motorola (NYSE:MOT - news) , Nokia (NYSE:NOK - news) , Ericsson
(Nasdaq:ERICY -
>news) , and Qualcomm (Nasdaq:QCOM - news) . Vari-L makes signal processing
>components used in wireless equipment, a
>fast-growing market with great long-term potential. Vari-L began the decade
>as a defense contractor, and it continues to
>provide components to the military for use in advanced radar, weapons
>guidance and navigational systems. But its pursuit of
>commercial market opportunities is really beginning to pay off now, as
>demand for its voltage controlled oscillators (VCOs)
>and other signal processing components is soaring due to their use in
>cellular/PCS, fiber-optic and satellite communications.
>
>In a nutshell, VCOs adjust the wireless signal to a predetermined
>frequency, a necessary step for any wireless transmission.
>The company dominates the market for VCOs used in base-stations for
>cellular and PCS, and now it is hoping to leverage its
>position in the much larger handset market. It has patents for low-power
>VCO design and production that position it well for
>subscriber applications like wireless phones and pagers.
>
>Vari-L is so small that it only has two brokerage firms providing earnings
>estimates. They forecast 25% growth in earnings
>per share this year and 30% annually over the next five years. The company
>has annual sales of approximately $23 million.
>
>Vari-L has invested aggressively in assembly line automation to increase
>production efficiency and capacity. Vari-L installed
>three new state-of-the-art assembly lines. As a result, Vari-L has shown
>significant improvement in its profit margins. Net
>profit margins are holding consistently above 14% now versus 11.5% in 1997
>and 9.8% in '96.
>
>It looks like the investment in greater production efficiency and capacity
>is already paying off, but there's always a risk with
>this sort of capital spending. If demand should soften for whatever reason,
>some or all of that new equipment sits idle. That
>can be quite distressful for any manufacturer. The outlook for the wireless
>communications industry is so strong, though, that
>this doesn't seem like a meaningful concern these days.
>
>The company is 22% owned by management, and institutional investors own
>just 14% of outstanding shares. But with a
>market capitalization of less than $100 million, its tough for big
>institutional investors to get involved. Mutual funds, for
>example, typically have limits on the percentage of a company they can own.
>If sales do take off and the stock really is
>catching the attention of Wall Street, the big money can move a little
>stock like this up in a hurry. Unless and until that
>happens, though, all that investors have are a good story and a very
>volatile stock. Its beta of 1.62 means Vari-L has moved
>62% more, up or down, as compared to the S&P 500. Average daily volume is
>growing, now at 86,400 shares compared to
>51,700 a few months ago, but that's still pretty thin for institutional
>investors.
>
>Vari-L certainly has a compelling story, with the wireless communications
>industry expected to grow substantially in the
>coming decades. The company has already staked out an impressive presence
>in several segments of the signal processor
>market, and the biggest opportunity may be just around the corner--its
>low-power VCO for wireless handsets. Now it comes
>down to execution and gaining the attention of more on Wall Street.
>
>- James Hale
>The Online Investor
>
>
>Tim Fisher
>Ore-Rock-On and Pacific Fishery Biologists WWW Sites
>
>[e-mail]
>WWW: http://OreRockOn.com
>See naked fish and rocks!
>
>
>-
>
>
>


- -

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

Date: Thu, 25 Nov 1999 02:03:01 -0500
From: "Tom Worley" <[e-mail]>
Subject: Re: [CANSLIM] Selling Rules

The bottom line is simply discipline, you either stick to
what works for you, or you don't. Ultimately, it doesn't so
much matter as to what rules you improvise from CANSLIM,
it's what you find works for you in your own individual
environment.

When you start hedging the rules that "used to" make sense
to you based on your past investing experience, that is when
the "red flags" must be raised. The first few times I read
HTMMIS, I kept smacking my forehead as things finally made
more sense.  I promised myself I wouldn't keep repeating my
past mistakes, but of course I did. It truly took a lot of
years before I convinced myself I did have to learn from not
only my own mistakes, but from the lessons of others, WON in
particular.

And every time I do the same stupid thing again, and pay the
price, I smack myself in the forehead and ask myself, "what
does it take for me to learn?".

The "best time" to pick an exit point when you made a
mistake (or even are right) is right before or just after
you bot a new stock.  The "worst" time is when it's going
against you. Likewise, the best time to pick an exit for a
nice profit is even before you actually bot the stock.
However, my caution would be to treat this more as a
"review" point than as a hard exit (at least for the
experienced investors).  You could also use this the same
way on a position that goes against you, make a positive and
pro-active position review, ask yourself why do you own the
position at this point in time and price (regardless of
whether its up or down from your entry).  Would you stilll
buy the stock at its current price, and performance, and
chart? What rules (make a conscious decision here) would you
violate if you decide to hold a losing position? What if
it's a winning position, but losing all your paper profits?
What if you're sitting on cash, and don't have a stake in
the performance of this issue, would you want to commit your
real money into the risk that it would perform?  And at its
current price, and perfornance (after all, that's the
question presented by all the other investors out there that
don't already own the  stock, or might be persuaded to
average down), would you commit real money into owning it if
you didn''t already have a stake in its success?

Tom Worley
[e-mail]
chat with me at ICQ # 5568838
get ICQ software at http://www.icq.com/icqhomepage.html


- -----Original Message-----
From: Harry Yang <[e-mail]>
To: [e-mail] <[e-mail]>
Date: Wednesday, November 24, 1999 2:32 PM
Subject: Re: [CANSLIM] Selling Rules


Hi there,

Simple selling rules could create too many reasons to hang
on
in a downtrend, since people will interpret it in different
ways.
But if this simple rules have clear and straight definition,
people won't have a chance to alter them. Like the stop loss
rule.
It is very clear and straight. After you have your version,
whatever
it is 7% or 3xATR, it could be measured clearly. And you
stick with
it, you won't have a chance to miss it. I believe in this
part,
most of people just can't stick with it and they failed.

However too many rules could make things more complex and
leave
much bigger space to let people imagine or interpret these
rules.
And this, believe or not, will not protect any capital,
since when
it could not be measured, you can interpret it whatever you
want.
And if you can't stick with it, the rules are meaningless.

So I am looking for a set of simple, straight and measurable
rules
which I can stick with. So far, I didn't find it. Anyone has
better
situation then me?

Harry

- --- Tom Worley <[e-mail]> wrote:
>Hi Harry,
>
>WON pats himself on the back for having more selling rules
>than buying rules, which is admittedly much different from
>many sources that only have buy rules or a lot of buy rules
>and very few rules on when to exit.  WON stresses
protecting
>your capital, whether it is your initial money or
subsequent
>profits.
>
>Better to save your capital and live to play another day
>than to lose so much you retire from the game entirely.
>Simple selling rules just create too many reasons to hang
on
>in a downtrend.
>
>Tom Worley
>[e-mail]
>chat with me at ICQ # 5568838
>get ICQ software at http://www.icq.com/icqhomepage.html
>
>
>-----Original Message-----
>From: Harry Yang <[e-mail]>
>To: [e-mail] <[e-mail]>
>Date: Tuesday, November 23, 1999 3:30 PM
>Subject: [CANSLIM] Selling Rules
>
>
>hi there,
>
>WON defines a very clear buying point. However he doesn't
>give us
>a clear selling point. Even the book gives over 20 selling
>rules. I like
>CANSLIM because of its simple and straight strategy. But it
>sounds to have
>difficulity to form a simple and straight selling strategy.
>Any suggestion
>there?
>
>Harry
>



- -

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

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