CANSLIM doesn't work ?

[Hook N. Sinker]

Quote from ehsmama:

You are mistaken,
It has both
risk rule = 7% stoploss
Position sizing Rule = 8-10 Positions for any account

The difference between rules and guidelines is that rules are fixed and not broken; guidelines are subject to judgement.

My copy of "How To Make Money In Stocks" page 106 reads somewhere between two and seven stocks. Page 87 reads "limit loss to 7 or 8 % of your cost". So which is is, 7 % or 8 %? And lets not pretend that when I sell a $ 15 / share stock to stop a loss there is no slippage. My loss might be 15 %. Pages 99 to 102 list 36 "Other Prime Selling Pointers". CANSLIM is not a method with fixed rules, it is a set of guidelines that confuse me sometimes. CANSLIM is not a method, it is a notion.

I like the book "How To Make Money In Stocks". I recall learning a lot from the book. I recall seeing many examples of growth stocks over many years that meet at least some CANSLIM guidelines.

My problem with CANSLIM is that it is not a strict set of rules that allow no deviations.

I write computer code to test trading methods. I find many systems with simple rules that show many years of profitability. Maybe William J. O'Neill did not have computers to test methods when he began speculating about year 1960. He did the best he could with profiling approaches. In my opinion he did a very good job.

 

[Lamont_C]

Quote from Hook N. Sinker:

The difference between rules and guidelines is that rules are fixed and not broken; guidelines are subject to judgement.

My copy of "How To Make Money In Stocks" page 106 reads somewhere between two and seven stocks. Page 87 reads "limit loss to 7 or 8 % of your cost". So which is is, 7 % or 8 %? And lets not pretend that when I sell a $ 15 / share stock to stop a loss there is no slippage. My loss might be 15 %.

Doubing an 8% loss due to slippage seems unlikely. Even so, your example is no fuzzier than your "rule" of holding "until price decreases below the value of the 100 day moving average". What is meant by "decrease"? A tic? A close? What kind of bar? What type of MA? As it stands, 8% seems far less equivocal.

LC

 

[TRADERCJ]

Quote from Hook N. Sinker:

I believe CANSLIM works a LOT better when the value of the Standard And Poors 500 index is near the low value of the year and not the highest value of the year.

I think you might have something here. I was using Canslim earily in the year and was winning with it. Now I lose when I use it.

 

[maxpi]

The major effect that the CANSLIM book had for me was to show me how research is done. I got the idea from that book to do my own research since I did not want such a seasonal strategy.

 

[piezoe]

The following are statements of personal opinion, but believed to be factual.

1> CANSLIM works in Bull markets.

2> CANSLIM is gimicky and overhyped.

3> There are websights other than IBD that provide the same stock screening, or very very similar, at far lower cost.

4> O'Niels book is an OK beginners book for investors, but offers some seriously outdated advice.

5> The editorials in IBD are written from a radical right-wing perspective.

6> The software on the IBD websight is primative and some features are Internet Explorer dependent. The search function is all but worthless.

7> IBD is too expensive for what it offers.

8> O'Niel advises not to buy foreign equities (Draw your own conclusion Re whether you want to take investment advice from someone who would advise that.)

9> W. O'Niel is a highly successful promoter and huckster of IBD, his books, and his investment ideas. IBD is agressively marketed. Perhaps O'niel has made more money from selling books, methods and IBD than he has from investing.

10> Mutual funds supposedly based on CANSLIM have not been successful.

 

[Kicking]

I concur with your assesment, the editorial always pissed me off

O'Neill does not manage money by the way and not to take anything from his success as an investor, his legend holds to just a few trades he made in a couple stocks in a bullmarket.

 

[patoo]

Quote from piezoe:
......................

9> W. O'Niel is a highly successful promoter and huckster of IBD, his books, and his investment ideas. IBD is agressively marketed. Perhaps O'niel has made more money from selling books, methods and IBD than he has from investing.
. [/B]

I don't know how old you are, kid, but O'Neil is the genuine article. He supported IBD in the early days with his own trading. Not the other way around.

He taught fund managers how to trade.

His technique is widely followed by all kinds of people in their own style. Of course it works. Its nothing but momentum trading of high flying stocks.

I went to several of his seminars 15 years ago. In the context of answering a question about funds, he said at one of his seminars that his technique does not work in a fund. He tried and failed.

P.S. learn how to spell the guys name

<B><FONT SIZE=4>WILLIAM J. O'NEIL</FONT></B>

 

[piezoe]

"I don't know how old you are, kid, ..."

I'm very old. Though i misspelled his name, i am pleased that you at least knew who i was referring to. I have read O'Neil's book and was at one time a subscriber to IBD and the Website. O'Neil has his defenders. I am not one of them, though i respect his accomplishments.

 

[stonedinvestor]

I hate this O'neil character! He hurt me BIG time in the internet mania days, got me into Infospace, Doubleclick, and a zillion other crash and burners and always with that " New America " hyped up nonsense. And the armature technical take in the sidebars is SO dangerous.. Haupoge Digital just broke out of a long and stable three year base.... yea, and then went on to break my Freakin' heart.

There was a time long. long ago when you could get an idea of where a stock was going by waiting for it's accumulation rating in IBD to crawl over 70 and to get the popper letters in line under their headings B for sector strength A for earnings strength and B for accumulation always worked nice ... none of this works anymore! I continually see " E " ranked stocks that shoot to the moon and that rag of a paper recommending certain stocks despite the fact that they might have zero institutional backing - one of their own parameters. It's all just like CNBC in a newspaper and with that annoying Republican slant- No thank you. It doesn't matter how old you are, William O'Neil will lose you money and have the gaul to ask you for $1.25 in return.

 

[dac8555]

I dont use canslim exactly...

But...

1. in a bull market
2. Using stigher stops
3. incorporating more technical analysis
4. using the IDB 100.


I have made money.