William O'neil ''canslim'' method

Pulled down 37 stocks I think it was. The problem I'm having is identifying the cycles, but I'll keep working at it.

Kind of fun: some of my backtested methods are supercharged(because of the inherent fundamental bias of course). Makes me feel like a financial genius. But I know better: how many of these 37 highflyers will die in the next few months because of some sort of disappointment? This will undoubedly snuff my supercharged methods.

Question: how do I limit getting zapped by some negative analyst comment or insider knowledge of bad earnings or even negative sector expectations?
 
ShoeshineBoy
Question: how do I limit getting zapped by some negative analyst comment or insider knowledge of bad earnings or even negative sector expectations?
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Part of the protection comes form the method used to select the universe: ie. High Eps/RS.

Another protection is to divide you total pool of money into 4 or 5 streams. A friend of mine was holding a stock one time and overnight foul news came out. At the close of the day the stock was at 60, the following morning, it opend at 30. He lost 50% of his money in one night. If he had 5 equal streams going, that loss would have been 10%. Still painful, but not crippling.

Another advantage to working multiple streams is the ability to play multiple stocks. Jack's method calls for holding 6-9 days at a time. Having 4 or 5 streams allows you to roll from one stock to another as the price cycles play themselves out. If you are only using 1 stream, you are stuck with your last pick. Imagine holding a stock that is puttering about while you see 2 or 3 more making a nice move. Having multiple streams allows you more chance to have money available when the next great set up comes along.
 
I understand the idea of multiple streams and already do that. But what do you mean hi EPS/RS? Are you talking about a ratio? And how would that protect you? Doesn't that actually make you more vulnerable - that is what are the odds a 96 can sustain that? Or am I worrying about nothing?
 
EPS: Earnings Per Share. This is the C in CANSLIM (Curent quarterly earnings per share)

RS: Relative Strength. How a stock compares an Index, or other group of stocks. This is the L in CANSLIM (Leader or Laggard).

By picking your universe from the cream of the crop as it were (ie EPS and RS as high as possible) you should be limiting risk. At least this is part of the idea behind CANSLIM. High EPS gives a reason for growth in a stock. High RS shows strength when compared to other stocks, especially in a weak market at this.

Jack has suggested getting your universe from StockTables.com. You will notice that their rankings are much like IBD's rankings which is run by William O'Neil, the founder of the CANSLIM method.

I don't beleive that Jack is promoting the use of the CANSLIM method throughout, since their time frame is different from his method. At least I think so, it's been a while since I have read his O'Neals book that outlines the CANSLIM method: "How to Make Money In Stocks". If I recall correctly, CANSLIM overall is an investment strategy. To me, investing implies a long holding period (months). Jack's method calls for a much shorter time frame (6-9 days).
 
Stocktables.com is a pretty neat site that is operated by the folks at PitBull.com. Their approach to the CANSLIM method is streamlined and simplifies a lot of the work that can go into finding the right candidates. Henry Ford is the founder, no relation to the more famous one he says, and seems like a genuine person.
 
We are getting down here and the results are going to be terrific for you.

Let me be brutal and well as extremely supportive in a brief and direct manner.

Build a triangle of: A quality universe; a scoring technique to be timely; and a rotation of threads of capital to appreciate capital optimally.

You can't read my stuff as yet because yoiu don't have he knowledge.

Your universe is based on top quality. EPS and RS are a pair that you "and". Both must be present.

Read How to Make Money in Stocks to get with it. You most need to have a log in landscape of the 18 common mistakes in chapter 20. Log your progress periodically in getting these out of your mind.

You had a poor dad. read Rich dad, Poor dad to determine more of your present handicaps.

when you bring up what ifs.... you demonstrate that you have not taken the time to learn the terminology here. The EPS and RS thing is key to minimizing the crap you have fears about.


You have to assess stuff continually to make money. Don't fret. get to work. The comments that are going to come down here from a variety of people are going to knock your socks off. All of this stuff has a transference that is almost perfect. All of this is objective and right down the middle of a six lane hiway to being really rich.

I suggest that the cycles will show up on all the the stocks you play at least 5 times in six months. You say you can't find a cycle. Use thestuff i gave you. set the EPS and RS at 90 each and see the list is short because we are having bad times because of our Prez etc. So what loosen the EPS and RS values to see the list get longer.

Absolutely erase from your mind that these are risky stocks from the viewpoint od analyists. The analysts will naver be able to keep up with you when you get to where I am.

I get citations from SEC for insider trading because they detect multiple accounts I have POA on are trading like insider trading.

This is a screw up on their part and I am training them out of it. And what they are perceiving is this: I trade like I have insider info which in fact iI do not. Forget the analysts; they lag and screw up too. their screw up consistently on stocks in your universe will be that they undershoot the realperformance in their estimates.. This is a neat backtest9ing subject. Do the EPS and RS for five years and find out the offset between analysts and performance. The result is totally skewed towards performance.

so we have two sheets to use to assess stocks that make it into the universe and I have set you up in such a kewl manner, you actually can get one sort to turn out the three key scores to be monitoring. you get 7's at top ; 0's at bottom and 1's in the middle.

you will have to get to the place where you clearly understand that no one else in the world can come up with this precision and iin fact only take 5 seconds to go through 16,000 stocks to get 100 to 150 by just trimming the settings on two variables. What the heck. Get into the groove and get off the downside stuff for a day or two.

you need to have a set of money threads. you need this for several reasons. One is focus. If you hold for 6 to 8 days and you want to focus, then have 4 or 8 threads. 4 threads if money is low and focus every other day.

I am plagued with rules like limiting by thread to 100,000 shares of one stock there and not reading more thqan 10% of the days cummulative volume. You will not face this for a few years but it is coming if you get in the groove.

The comments made about spreading risk are true and well known. But remember the blue chip stocks are too low in quality for us to consider. Investing and trading is rocket science when you get to the big leagues. You can creme the market so well that your broker is totally dependant upon you all the time for the benefit of his clientele. You can't imagine how commissions are set.

Okay you have a milking stool with three legs.

A universe that is excellent
stocks that are analyzed to the extent that they always deliver cycles of profit in 6 to 8 days.
a continuing rotation of capital where daily you focus on wht is ripe for selling and what is ripe for buying.

I have siumply put on as attachments a complete set of tools for doing this.

All that is left to do is learn to be fluent in their use and learning how the market works.

fortunately for you we have a perfect market to operate within. there is no better place than this because of the lulu runing the whitehouse (where I have worked for three Presidents). We have an absolute guarantee that something good and bad are always going to be coming up. This enables the best 6 to 8 day cycles possible.

Also please note that all the financial damage being done across the board does set us up for a global recovery once it is over. The money sidelined now, alone is going to drive the DJ up to over 12,000. the largest detor nation we have achieved, so we can now get ready to retrace all that crap too. Last and biggest, all the ugly balance of payments we have screwed up in the US, has served as seed money for building corporations all over the place. What happens next is that there will be a global trading infrastructure to trade these stocks.

I pop into Singapore occassionally and all the other places you can think of too. I did miss snorkling in Antartica this January (summertime) but not next year. What is ahead economically is now just building in potential energy. When the free enterprise system hits globally it is going to be like nothing anyone has ever seen.

This thing we are doing is being done in most of all the current exchanges in the world. I know this from emails and web sites that have this stuff on them. Music, engineering drawing and market trading are all the same there is no language barrier.

Since 1957, I have been doing 6 to 8 day cycle for 10% and now with the invention of commodities indexes you can pull down a bout 50 times the ROI using the same stuff.

It is nice to see that the PC has been invented too. I had to change all the defults on the indicators when the PC came along.

Before indicators were invented there were just formations and the P, V relationship.

Anyone can make more money in the markets than professionally within three years of starting regardless of initial capital.

the fractal for equities is the 30 min bars and the fractal for commodity futures indexes is the 5 min. you anticipate on the neaxt faster fractal. and you shift to the slowest fractal possible to "see" a tape to monitor. A tape is when the price bars fill the trend channel.

So this is the bounding tuff that defines it all.

Please focus on this stuff and forget about your poor dad downside thinking.
 
Quote from BigBriQuaker:



Part of the protection comes form the method used to select the universe: ie. High Eps/RS.

Another protection is to divide you total pool of money into 4 or 5 streams. A friend of mine was holding a stock one time and overnight foul news came out. At the close of the day the stock was at 60, the following morning, it opend at 30. He lost 50% of his money in one night. If he had 5 equal streams going, that loss would have been 10%. Still painful, but not crippling.

Another advantage to working multiple streams is the ability to play multiple stocks. Jack's method calls for holding 6-9 days at a time. Having 4 or 5 streams allows you to roll from one stock to another as the price cycles play themselves out. If you are only using 1 stream, you are stuck with your last pick. Imagine holding a stock that is puttering about while you see 2 or 3 more making a nice move. Having multiple streams allows you more chance to have money available when the next great set up comes along.
More...

Super comments and observations
 
Quote from BigBriQuaker:

EPS: Earnings Per Share. This is the C in CANSLIM (Curent quarterly earnings per share)

RS: Relative Strength. How a stock compares an Index, or other group of stocks. This is the L in CANSLIM (Leader or Laggard).

By picking your universe from the cream of the crop as it were (ie EPS and RS as high as possible) you should be limiting risk. At least this is part of the idea behind CANSLIM. High EPS gives a reason for growth in a stock. High RS shows strength when compared to other stocks, especially in a weak market at this.

Jack has suggested getting your universe from StockTables.com. You will notice that their rankings are much like IBD's rankings which is run by William O'Neil, the founder of the CANSLIM method.

I don't beleive that Jack is promoting the use of the CANSLIM method throughout, since their time frame is different from his method. At least I think so, it's been a while since I have read his O'Neals book that outlines the CANSLIM method: "How to Make Money In Stocks". If I recall correctly, CANSLIM overall is an investment strategy. To me, investing implies a long holding period (months). Jack's method calls for a much shorter time frame (6-9 days).
More...

thanks so much.

The timeframe for making money is dictated to us by the markets.

O'Neil prefers to do the IT thing. Meaning intermediate term. the cup and handle is the key thing he likes. It fits into the stages of the life of a corporation.

what I do is perceive that the compound interest formula can be applied to various fractals (all of them actually) and you get a result where it looks optimum on the 6 to 8 day cycle that rides along on the slower trends (IT trends).

You can make an example for your self. Do a point to point (beginning to end) on a daily chart for a year or so. Then do all the 6 to 8 day cycles withing the pint to point and compound them. QED.
 
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when you bring up what ifs.... you demonstrate that you have not taken the time to learn the terminology here. The EPS and RS thing is key to minimizing the crap you have fears about.
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Please, give me the benefit of the doubt: I knew what EPS and RS meant. I thought he had some magic quantity using these two that helped eliminate risk. Forget I asked this one.


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You can make an example for your self. Do a point to point (beginning to end) on a daily chart for a year or so. Then do all the 6 to 8 day cycles withing the pint to point and compound them. QED.
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Thanks - this helped drastically.
 
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