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Read your mail about the first step of using fundamentals then technical analysis. I am trying to use the AAII stock data base and filter out desirable potential candidates for the technical analysis. If you wish to explore more of this filtering process let me know. I also am interested in what others are doing so please feel free to share if you will.
-----Original Message-----
From: Tom [SMTP:tomj@xxxxxxxxxxxx]
Sent: Sunday, June 22, 1997 7:48 PM
To: Metastock List
Subject: RE: Sponsorship
At 05:08 PM 6/22/97 UT, you wrote:
Jim:
I agree. The market tends to be a moving target. When this market turns
down, for example, it'll be a different ballgame.
I've been following your posts and your methodology and it sounds good to
me. I use a combination of Navellier's MPT newsletter, the Pitbull method,
IBD relative strength rank, and IBD accumulation/distribution rating to
establish my "list." Then I use trendlines, channels, support and
resistance to further select and time entries and exits.
I'm a convert to the idea of relying heavily on fundamental analysis for
stock selection, and technical analysis primarily for timing. But I prefer
to have someone else do that leg work for me.
I spent years looking for a mechanical system that could be applied to any
stock. I could alwaya find systems that would work great on some stocks
some of the time, but which always lost big-time on many stocks some or all
of the time.
I think Dave Zawicki's point about earnings upgrades and using Zack's is a
good one. Gotta have a way of narrowing down the universe.
TomJ
>Tom,
> I'm just trying to find out what works for me <G>. I use different
>approaches at different times based on what seems to be working currently.
>For a brief recap, I use several Telescan searches to identify stocks I like.
>Then for the ones I like, I download the data to my MetaStock database. I
>prune my MetaStock database periodically to keep it under 200 stocks. When I
>put a new stock in my database, I run a MetaStock comparison of several system
>tests to determine which test works best for that stock. My chart has three
>windows with indicators at the top, then a window with the Candle Volume plot
>of the stock, then a window with the volume at the bottom. The three
>indicators at the top are unique to the test that performed best, so I can
>tell which test I use for the stock by just looking at the chart. I run three
>explorations each week to determine what stocks to place on my watch list. I
>look at all the charts every few weeks. I look at the watch list charts
>daily.
> I look at the stocks that come out of the searches and explorations to
>see which ones I like. I don't use all of them, only the ones I like based on
>looking at the charts. I rely heavily on trend channels and breakouts.
> Now back to the subject <G>. For years I have used telescan Prosearches
>looking for reversals, breakouts, and strong momentum stocks with good
>fundamentals and technicals. I had not included analyst recommendations until
>recently. I have started to play with a combination of the number of analysts
>recommending the stocks coupled with strong buy recommendations which is the
>best way I know to define sponsorship. This does look promising, but not
>significantly better then several other approaches. It seems to me that
>different approaches work at different times, and it's best to have several in
>your bag of tricks. What do you think?
>
>Jim
>
>Jim
>
>-----Original Message-----
>From: Tom
>Sent: Sunday, June 22, 1997 11:09 AM
>To: Metastock List
>Subject: RE: Sponsorship
>
>Jim,
>
>Several months ago I attended a talk by Louis Navellier re his Market
>Portfolio Theory ("MPT") of selecting stocks. Basically, he applies a
>number of technical and fundamental screens based solely on statistical
>computer methods (as in minicomputers) designed to identify "what makes
>stocks move." I think that the only subjective input involved is how to
>balance the quantity of each stock in a portfolio to minimize volatility of
>the portfolio.
>
>Anyway, at that time, Navellier's objective, statistical analysis showed
>that "sponsorship" in the form of broker recommendations, and earnings
>estimate upgrades, were among the most important fundamental factors shared
>by the best performing stocks during the last six months. This could
>change, but for right now, it suggests that buying on
>upgrades/recommendations is not a bad approach. Of course, if you are
>prescient, you could get in before a series of upgrades/recommendations.
>I'm not. <g>
>
>Are you trying to get in on the ground floor, before any brokers get
>interested?
>
>TomJ
>
>
>
>At 07:23 PM 6/21/97 UT, you wrote:
>>Tom,
>> I wasn't really talking about the fundamentals of the stock, but instead
>
>>the investment story. For example, "brokers have to be coining money at
>these
>>high volume levels" or "farm equipment manufacturers will do well because of
>>the high grain prices". I realize that's not the sponsorship you are talking
>
>>about, but instead is one of the factors along with a stocks fundamentals
>that
>>might cause a big brokerage firm to sponsor the stock.
>> Back to your thesis. I agree that stocks can move after big firm
>sponsor
>>them. No matter what causes the move, I like to try to get in ahead of the
>>sponsorship <G>.
>>
>>
>>-----Original Message-----
>>From: Tom
>>Sent: Friday, June 20, 1997 9:41 PM
>>To: metastock-list@xxxxxxxxxxxxx
>>Subject: Re: Sponsorship
>>
>>Jim:
>>
>>You may be confusing "sponsorship" with good quality fundamental analysis by
>>the quality investment firms.
>>
>>I don't think that we can tell whether it is the "sponsorship" that causes
>>certain stocks to rise, or instead, the quality of the company that is being
>>sponsored.
>>
>>At bottom, though, either way -- you win!
>>
>>Good luck.
>>
>>
>
>
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