I read a couple of O'Neill's books. I followed the 8% sell rule, sometimes to my benefit, other times to miss out on monster winners. This takes a lot of work, and there always seems to be a reason "you should have... you shouldn't have ..." when the investment goes sour or you miss a good run.SO: Who can point me to William O'Neill's trading records, or perhaps the trading records of well-recognized CANSLIM investors? The best I can come up with is the mutual fund CANGX. You can see their track record in the chart of the value of their fund.I can see that buy and hold is only good when you bought a good company and its good luck held up. My experience of the Fool is that they will ride a stock down and (hopefully) back up, but by the time a reason to sell comes out, the price has gone way down. The people with weeks of research and/or rooms full of research and analysis staff can ferret out a company's worth as part of their day job. Most of us have other day jobs and try to get rich while others are sleeping. So the theory of technical analysis is that the people with huge research staffs have enough money to move the price of the stock when they trade, and only after those trades are done do you find out why they bought/sold.
I did fairly well several years ago using CANSLIM. However, it was extremely time consuming. Now I use Mechanical Investing, with Fasttrack and FastBreak.Yes, the Fools held in a model portfolio a stock, 3COM, for a near double and then eventually sold it for a loss. After that, I paid no attention.You need a buy discipline and a sell discipline, no matter what your method. So far at the 8% rule is concerned, it only applies if you buy at a CANSLIM buy point. If, for example, there is a cup and handle and you get in at the pivot point, the theory is that the rally fails if it goes down 8% from the buy point. Some people say that CANSLIM only applies to small investors. A mutual fund has to make large buys and sells; hence it tends to move the market too much to get in and out at the optimal points. It is certainly true that is is more difficult to trade a $100 million portfolio of 20 stocks than a $1 million portfolio of 20 stocks.Take a look at a list of stocks with allegedly good fundamentals. I say "allegedly" because it is very difficult to know such things. While you may look at the balance sheet and say that everything is good, you also have to know whether or not the companies products will be in demand, and that is much more difficult than financial analysis.Anyway, look at that list, and see what happens if you buy and sell at the (8,32) moving average crossover. Then look at the 21 day moving average for buy and sell points. See how that works out and try other numbers as well. Remember, this is the selection part of the process. The other part is timing: Do you want to be in the market at all?This has been a very volatile and frustrating market. There is a lot of fear: fear that you should not be in the market, and fear that you should not be out. Crazy days.
"You need a buy discipline and a sell discipline, no matter what your method. So far at the 8% rule is concerned, it only applies if you buy at a CANSLIM buy point. If, for example, there is a cup and handle and you get in at the pivot point, the theory is that the rally fails if it goes down 8% from the buy point. "===One of the canslimmers also had the notion of a "pocket pivot", where if a downtrend had broken, the "breakout" was the step above the trendline on heavier volume. He used that to carve out a few extra points before the traditional "breakout" point."Take a look at a list of stocks with allegedly good fundamentals. I say "allegedly" because it is very difficult to know such things."===Exactly, which is why technical helps. Those who have the weeks to ferret out the hidden information will move the price with their decisions. The point of technicals is to see the pattern of their choices and jump on board while there is still room in the run.And if the fundamentals are good enough, they put a floor on the potential loss. "Do you want to be in the market at all?"===Yes. And I will have a look at that 8,32 system. I think what you are saying is:1: create a universe of stocks with good enough fundamentals2: test a system where I buy and sell members of the universe on (8,32) ma crossovers.Correct?Thanks
Yes, that is correct. I also mentioned the 21 day EMA, which is good for a confirmation.
I read a couple of O'Neill's books. I followed the 8% sell rule, sometimes to my benefit, other times to miss out on monster winners. This takes a lot of work, and there always seems to be a reason "you should have... you shouldn't have ..." when the investment goes sour or you miss a good run.I have read the IBD for many years. (as well as the books)....I really like the paper. It gives me the direction of the Market, timely news, investment ideas, and Opeds, too.I cannot help on the CANSLIM trading record of WON....not really sure if he trades or just writes and does research.Sorry not to be more help.RunTex
I do know that it was from trading profits that he got the capital to start IBD. At least that is the story I read somewhere.However, no telling what that was as a percentage or his original capital.
You might wish to purchase William O'Neils latest book, titled "How to Make Money in Stocks - Complete Investing System." I picked up a copy at Barns and Noble during Christmas at a price of $29.95. It has a green cover. There is a CD or DVD at the back of the book called "Action Plan". I have several of his books and look at them periodically. He uses fundamental information and applies technical logic or reasoning to determine his entry and exit points. Visit your local library and check out Investors Business Daily. The Monday issue carries a listing of 100 top performing stocks. Using TC2000 from John Worden, and searching through the stocks using a momentum indicator or relative strength as measured against the SP-500 or other major indice of your choice will give you a hit on approximately 25 of those top 100 stocks shown in the Monday publication.I have chased too many companies and lost money for several years. Yes I am in an NAIC or BI investment club (since 1995). Making the right decisions is difficult for me. Now I am beginning to find screens and methods that have provided some good entry for companies that perhaps have no earnings or sales growth. One recent example is LVS which I first bought around $18 and followed it up to the $50 range. This is not the BI or IBD methodology.
I tried CANSLIM for years and didn't like the fact I was taking 8% losses all the time after I bought on a breakout. It seems lately, a bounce up off the 10 week moving average has a higher chance of making a winning stock trade, and a fall below the 10 week moving average on high volume or staying below the 10 week moving average is a sell signal. As for track records-I wouldn't put too much emphasis on what some people will say they returned using CANSLIM. You'll always have people saying they have good returns with the system and you will also have people saying they had poor returns. I would just try it for a while and see what happens. I would NOT try to treat the stock market as a get rich quick scheme. I think you'll set yourself up for failure doing that.Moving averages seem to have more value, to me, than breakouts or breakdowns.
10...20..50 ..day smaI agree with you..for me entry is everything...and breaqkouts fail more times than they gogogogogvolume on a breakout that is real?..should be huge..increasing for a couple/3 days ....most breakouts also test...testes at least once..2x?get the pullbacks...better offgood luckstr
also....CCI has been helpful as a confirm...RSI alsothe long term trendlines are the best place to take a shot for a long holdall stock charts return to their trendlines at least 1-2x a year...why?"like a dog returneth to it's vomiteth"that's whyzzzzzzzzzzzzzz
I recently subscribed to eIBD and think it's great for finding high growth/relative strength stocks.I'm keeping close tabs to stocks near their 50 DMA or their 10 week moving average.I like Thursday and Friday's edition. Thursday is the Top 200 Composite and Friday has the 85/85 stocks.Before today, I've been watching a few stocks that were falling back to their 10 week moving average.I noticed a few things today.INFA: stock fell below it's 50 DMA today on very high volume. The stock also undercut the 50 DMA mid June and also had very high volume but headed back up. TIBX: stock fell below it's 50 DMA today on very high volume. I notice the stock also fell below it's 50 DMA on June 1 on very high volume and continued downward. HSTM: slowly drifting back to 50 DMA.SLH: slowly drifting back to 50 DMA.GIB: drifting back to 50 DMA after a breakout earlier this month.MEDH: this stock found support at 50 DMA twice now since going public but is a bit above it now.These are the stocks I'm watching in IBD, along with HS and a few of the healthcare stocks that are in the top of the IBD 50 right now.
I currently own CRR and ALLT as trading positions. I will buy MEDH at tomorrow's open as it is very near it's 50 DMA.
I tried CANSLIM for years and didn't like the fact I was taking 8% losses all the time after I bought on a breakout. It seems lately, a bounce up off the 10 week moving average has a higher chance of making a winning stock trade, and a fall below the 10 week moving average on high volume or staying below the 10 week moving average is a sell signal.The problem with this screen is that passing companies are either OTC or have very low share turnover. That means you cannot buy in real life stocks from this screen. I've been tracking the theoretical return of this Screen for a while assuming that you can only buy stocks that are Not OTC and that have enough share volume as to not influence the price if you were to buy them. The returns are consistently different (and many times negative) compared to the theoretical returns if you wouldn't be limited by the aforementioned constraints.I think the other problem is that CANSLIM is so popular that everybody blindly buys/sells and combined with low share turnover, you get double digits gains and losses all the time, throwing numbers out of whack. At that point it becomes Russian Roulette... frankly, if you're going to start buying CANSLIM then you're better off heading to Vegas, at least you'll have fun while you're losing your money.
You sure slobbered a bib full on this one!! I tried following Investors Business Daily (IBD) for over a year and earned little more than losses. CANSLIM in my experience, is a disaster; and I'm at a loss to understand how IBD manages such high subscription fees. Apparently none of their subscribers have heard of Motley Fool.
Thanks for you post of the CAN Slim method of buying rules. I'm new to the Fools.com method of buy and hold and their stock selections.With the amount of reading on the web site so far I don't see any buy or sell rules at all.Do you use stop loss orders with the Fool's stock picks?Thanks
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar. Earnings Estimates, Analyst Ra