Download - Tuscaloosa IBD Meeting #10
TUSCALOOSA IBDMEETING #10
April 29, 2013
Meeting Rules 1. Ask questions, there are no stupid questions. 2. We meet Monthly, the 4th Monday evening
6:30pm until 8:30pm. Mini meetups will be scheduled when possible.
3. Invite people who are interested in investing in stocks.
4. No one is here to make money off another person, only to improve our investing skills.
5. The main subject will be “CAN SLIM” at every meeting.
Tuscaloosa IBD is Part of Meetup
Meeting Format Market Health CAN SLIM Portfolio Management Training Stock Review
MARKET HEALTH
NASDAQ 4-26-2013
S&P 500 4-26-2013
DOW Jones 4-26-2013
IBD Mutual Fund Index 4-26-13
Industry Groups 4-26-2013
Industry Groups 4-26-2013
Market Pulse 4-26-2013
Market Lengths
Market Lengths
Super Cycle
Accumulation/DistributionCount
What Progress have we made? Year To Date 1-2-13 NASDAQ up 5.37% S&P 500 up 8.19% NYSE up 6.23% DJIA up 9.69%
IBD Market Wrap
CAN SLIM
CAN SLIM - 7 Traits C=Current Earnings (25% Min.) A=Annual Earnings (25% Min.) N=New (Products) S=Supply and Demand (Demand) L=Leader (tops in its Group) I=Institutional Sponsorship (Mutual Funds) M=Market Direction (Going Up)
CAN SLIM C = Current Big or Accelerating
Quarterly Earnings and Sales per Share
CAN SLIM A = Annual Earnings Increases: Look for
Big Growth
CAN SLIM N = New Newer Companies, New Products, New Management, New High off
properly formed chart bases
CAN SLIM S = Supply and Demand How is it available vs. How many people
want it. Supply and Demand is more important
than opinions.
CANSLIM Leader
Best quarterly and annual earnings growthHighest return on equityWidest profit marginsStrongest sales growthMost dynamic stock-price actionUnique and superior product of serviceTaking market share
CANSLIM How to find Leaders? Check Relative Price Strength Rating
(RS) in Investors Business Daily RS Rating measures the price
performance of a given stock against the rest of the market for the past 52 weeks.
RS Rating - 1 to 99 – 99 is the best
CANSLIM Leaders
During corrections leaders correct 1.5 to 2.5 times more than the general market.
From 1950 to 2008 the average RS of 87 before stocks began their run up.
CANSLIM Past Leaders
1967 - Control Data1981 – MCI Communications1990 – Qualcomm2003 – Google, Apple, Research in Motion,
Potash2012 – 2013 – LNKD, FLT, CELG, ????
CAN SLIM Institutional Sponsorship
Mutual Funds, Pension Funds, Hedge Funds, Insurance Companies, Bank Trust
CAN SLIM Institutional Sponsorship
Buy Stocks that Institutional Sponsorship is increasing over time.
Be careful about Stocks that are over owned????
CAN SLIM Institutional Sponsorship
Best Institutional Sponsorship – Check Mutual Fund 36 Month Performance Rating in “IBD” B+ or Better
WON Preferred Funds
Industrial Groups - Sectors
Industrial Groups - Sectors
Industrial Groups - Sectors
PORTFOLIO MANAGEMENT
TRAINING
Portfolio Management Training How many stocks should I own? Should I diversify? How much money should I allocate to
each stock? What is weeding and feeding? Should I use stops and limits? Should I buy and sell at the Market
price.
STOCKS FOR REVIEW
CAN SLIM Method Growth Stocks only.
They go up nice and slowly, but can fall like a brick.
Stocks over $15.00 per share.Trades over 500,000 shares a day.Has earning over 25% Has sales over 25%Has institutional sponsorshipHas a good RS line
CAN SLIM Method Teaches us:
What to buyWhen to buyWhen to sell
Buy on Technical's and Fundamentals Sell on Technical's
Technical’s – Chart Patterns Cup with Handle Double Bottom Saucer Base Flat Base Square Box Ascending Base
High Tight Flag 3 Weeks Tight 4 Weeks Tight 5 Weeks Tight Short Stroke Pullbacks
Fundamentals Earnings Sales Sponsorship Return on Equity U/D Volume ratio Cash Flow
CAN SLIM When can I buy?
When the Market is in a Confirm Uptrend!!!! When do I sell?
When the Market is in Uptrend Under Pressure!!
When the Market is in a Correction!!!!!!!!!!!When a stock is down 7 to 8 % of the BP
Importance of Cutting Losses LOSS%
- 7% - 20% -33% -50% -75%
Gain Needed to Get Even
+ 7.5% + 25% + 50% +100% +300%
You can be right 1 out of 4 times and only suffer a minimal loss! Stock A +20% Gain = 20% Gain Stock B -7% Loss = 12% Gain Stock C -7% Loss = 4% Gain Stock D -7% Loss = 3% Loss
You can be right 1 out of 4 times and still come out ahead! Stock A +25% Gain = 25% Gain Stock B -7% Loss = 16% Gain Stock C -7% Loss = 8% Gain Stock D -7% Loss = 1% Gain
Portfolio Management Training Whose advice should it listen to? Can I buy and hold?
Portfolio Management Training Watchlist
Universal List – Maybe 100 StocksReady List – 10 Stocks – Working on BPsBuy List – 5 Stocks - Buy when Market is
right
Portfolio Management Training Number of Stocks to Own
3 to 5 Stocks Position Size
Divide your money by the number of stocks you plan to own.
Portfolio Management Training How to buy a position?
Buy best stock first.Buy 50 to 60% of the position and if it goes
up buy the rest of the position.Then buy the 2nd , 3rd and so on the same
way.If one of your positions is not working sell it
and move your money into one that is working.
Go to MarketSmith for Stocks to review
http://www.meetup.com/Tuscaloosaibd/ Pod Cast
IBD Radio ShowIBD Editorials
The End
Cup with Handle
Double Bottom
Saucer Base
Flat Base
Square Box
Ascending Base
High Tight Flag
3, 4, 5 Weeks Tight Closes
Short Stroke
Handles
Pullbacks
More Rules