Can Slim

[bashirb]

My buddy has been yelling at me to stop wasting my time and start using the can slim feature on Investors Business Daily website (investors.com). I got the paper as a trial and it's amazing! Great articles and stories if you follow the market. It also highlights great companies that I am sure would fit the "Rule 1" criterion.

Anyways let me know if anybody has used this feature on investors.com and what did you think about it?

[tombrown1]

I read O'Neil's book on Canslim and it has some very good ideas. I think that combined with Murphy's T.A. book make for a very good T.A. foundation.

[bashirb]

Could you expand on your previous comment?

What was the book about more specifically? What is the T.A. foundation?

[Gunnski]

CANSLIM is very good and pretty easy to remember.

Some of the first investment books I read were William O'Neil's. They made alot of sense and give you a strong investing foundation.

I suggest picking up a IBD at Borders (or whatever book store is available to you), and try it out. Your local libaray probably carries it also (FREE). I get home delivery (newspaper format). I have tried on the online electric version. I did not care for that much. IBD 100 comes out on Fridays. This is a nice way to start a watch list. These are very good companies & have many R-1 values.

C= Current earnings, A= Annual earnings, N= New product or service, S= Supply & demand, L= Leader or laggard? I= Intitutional ownership, M= Market indexes.

You can put this into a very useful scan on MSN Investment tool box.

Early on I became interested in the Cup w/ Handle pattern, (IBD main stay pattern). This is a chart pattern. It reflects some of T.A. foundation. Which is reading charts. T.A. involves, Price, Timing and Volumn. Tools are moving averages, trend lines, resistant points, MACD, Stochastics, RSI etc. These are the basics, there are many more advanced tools, like Elliot Wave.

Take a look at Investor.com. There is a CAN SLIM Education center.

Hope that helps. Best of investing.

[tombrown1]

Well put Gun. Just to further clarify - T.A. is technical analysis. It's a method of looking at stocks based on price trends rather than fundamentals.

[bashirb]

I have been studying Elliot Wave. It is fascinating. It is actually quite simple just hard to apply and use effectively. Even studying the initial idea you can actually see the wave patterns in everything, not just security markets. Would not be surprised to see Elliot Pretcher go down in history as a market genius.

[bashirb]

I cannot believe I saw T.A. and did not realize you were talking about technical analysis! haha

[physics]

I do not recommend the CANSLIM approach at all. I read the book as a teenager and did an extensive analysis of the stock market to find stocks that met all of the criteria, and practically every stock was eliminated. There are very few stocks that meet all of the original criteria, probably fewer than 5 out of 10,000 publicly traded stocks. There have been explosive increases by dozens of stocks over the past few years which did NOT meet the CANSLIM criteria. The other telling indicator is that if you look at O'Neil and the CANSLIM method over the past few years, it has not performed very well. This is the biggest evidence his method doesn't work.

[CT]

Totally disagree with physics. I've got a finance background (MBA in finance) and have been using this approach coupled with other approaches I've learned.

The problem with the CANSLIM method is valuation. You need to understand what the top line valuation for the stock is. Bill's method works if you couple that with his approach.

FYI, I've been taking a break with from trading/investing and just got in in late march. Up 30% so far and going up. However, I also subscribe to the premium features of his service.

Listen, from a purely analyst's perspective it makes sense. Analysts pick stocks after sorting through macro, industrial and sector trends. That's why some stocks, no matter how great the valuation is, sit in the gutter while others, not so well valued, are flying off the shelves. Look at what's hot now.... Oil. T.A. has its place (I've offended the gods of EMH), because I've used it and it works.

Lots of professors in their ivory towers proclaim that Wall Street is a random walk. It is, if you look at from a purely statistical and regression based approach. But its dynamic, and thats why analysis such as yours fail to detect the relations.

[physics]

I'm not sure that you're understanding what I'm saying.

I agree that the EMH is false and has no basis on anything in the stock market. It IS possible to beat the market. What I am saying is that you will not do it with the CANSLIM method. You mention yourself that you combine ideas of CANSLIM with other techniques, which lends credibility to what I am saying that CANSLIM by itself does not work.

All you need to do is look at the performance of CANSLIM over the past few years. It has NOT done well. Maybe you could say that I use some ideas of CANSLIM, because it includes basics like earnings, etc., but that is not the same as using his method in totality. My method, and probably most people here, is not CANSLIM.