CANSLIM works if you're willing to put the hard work in. It's not something that can be mastered with one hour of work. You have to be constantly scanning charts and fundamentals to narrow your list down. All this work has paid off in my ability to pick the proper point of breakout, cause they're not always at 52 week highs. Recent picks have been VIP and MBT. VIP is moving, but MBT is pulling just under the breakout. MBT I'm almost ready to get out of. The problem these days, is a stock can run up 5 point from the breakout, then pull in on light volume, and then, WHACK!!! They kill it and it undercut's the 7 - 8% stop loss area. CANSLIM has worked in every decade since O'neil put it together. I think we just need a substained bull market, nothing crazy like 98 - 00, just a normal up trend that eveyone trusts. My biggest problem in the past was not cutting the loss at 8%, but taking bigger losses. I did an analysis of my trades, and if I cut my losses to the 8% level, I would actually be up a little in this bear market in my long term account. If I actually learned to spot weakness in the stock before the reversals, I would be up alot. This is where my focus is now, and the last three months I've gotten better at it. I think the biggest metal block for me right now is to forget the returns that CANSLIM stocks returned from 98 - 00, and just focus on the fact that returns will be much smaller in these times. So I'm trying to beat this into my head, just like I did with loss cutting rules for day trading.
I'm a Canslim user but the M stands for Market so not right now. We have no underlying fundamental reasons for a strong bull market. Market's move in cycles and we just coming out of a downward cycle, probably a sideways cycle now for the next few years.
Thanx tharp. I don't often post strategy much. I feel that I just loose my edge when I post much on that, I prefer to post only on emotional stuff and psychology. I just thought that I could help some of these CANSLIM people out to understand why it is that their strategy doesn't work much anymore. I'd like to see more on accounting and value investing. I'd love to comment more on that.
Hey P2. I agree, that in a weak market, breakouts are short lived and often manipulated. Even more so this year than last. I am curious though, which stock(s) recently that you conducted such an operation on that fit this description... "wait for the right day (up day) and right chart (tight pennants, clean breaks at whole numbers)" I'd like to take a look at a couple of those breakout days, see what the intra day looks like as well as the daily chart at the end of the breakout day. Thanks. -- Z
CANSLIM takes a lot of work, knowing when to be long is a big part of it. If you guys are going to comment on whether the system does or does not work please have proper knowledge of it.
Sorry, I was posting on a general theme. Maybe the reason for all the fakies is me. I'd say that I probably do 1-5 a month like this. It depends on the market. I can't give names of particular stocks though. I don't want my setup to let others know when I'm pushing or not. Just wanted to alert people of the general nature of this tactic. I know of some other guys who do it also.
Is it possible that breakout profit was a bit overstated in a great bull marketâ¦? Since breakouts donât offer any profit target, maybe itâs safe to assume that problem with âfailedâ breakouts is not that they failed but reached their maximum potential, which , in reality may not be much at allâ¦?
C = Currently Quarterly Earnings Per Share A = Annual Earnings Increases : Look for Meaningful Growth N = New Products, New Management, New HIghs, Buying at the right time S = Suppy and Demand : Small Capitalization plus volume demand L = Leader or Laggard I =Institutional Sponsorship M = Market I restate my original comments. The above might help. I stated I no longer use CANSLIM right now. How often are you hearing of new highs? New Products? Meaningful growth in earnings? When those return I'll start trading a long term breakout system on top of my daytrading. Robert
I've stopped posting strategies a lot too. I've realized I'm trying to buy 3000 shares and only 400 are available. Why create competition when there is little benefit? Robert