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Tuscaloosa IBD Meeting #10

April 29, 2013. Tuscaloosa IBD Meeting #10. Meeting Rules. 1. Ask questions, there are no stupid questions. 2. We meet Monthly, the 4 th Monday evening 6:30pm until 8:30pm. Mini meetups will be scheduled when possible. 3. Invite people who are interested in investing in stocks.

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Tuscaloosa IBD Meeting #10

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  1. April 29, 2013 Tuscaloosa IBDMeeting #10

  2. 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.

  3. Tuscaloosa IBD is Part of Meetup

  4. Meeting Format • Market Health • CAN SLIM • Portfolio Management Training • Stock Review

  5. Market Health

  6. NASDAQ 4-26-2013

  7. S&P 500 4-26-2013

  8. DOW Jones 4-26-2013

  9. IBD Mutual Fund Index 4-26-13

  10. Industry Groups 4-26-2013

  11. Industry Groups 4-26-2013

  12. Market Pulse 4-26-2013

  13. Market Lengths

  14. Market Lengths

  15. Super Cycle

  16. Accumulation/DistributionCount

  17. 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%

  18. IBD Market Wrap

  19. CAN SLIM

  20. 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)

  21. CAN SLIM • C = Current Big or Accelerating Quarterly Earnings and Sales per Share

  22. CAN SLIM • A = Annual Earnings Increases: Look for Big Growth

  23. CAN SLIM • N = New • Newer Companies, New Products, New Management, New High off properly formed chart bases

  24. CAN SLIM • S = Supply and Demand • How is it available vs. How many people want it. • Supply and Demand is more important than opinions.

  25. CANSLIM • Leader • Best quarterly and annual earnings growth • Highest return on equity • Widest profit margins • Strongest sales growth • Most dynamic stock-price action • Unique and superior product of service • Taking market share

  26. 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

  27. 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.

  28. CANSLIM • Past Leaders 1967 - Control Data 1981 – MCI Communications 1990 – Qualcomm 2003 – Google, Apple, Research in Motion, Potash 2012 – 2013 – LNKD, FLT, CELG, ????

  29. CAN SLIM • Institutional Sponsorship • Mutual Funds, Pension Funds, Hedge Funds, Insurance Companies, Bank Trust

  30. CAN SLIM • Institutional Sponsorship • Buy Stocks that Institutional Sponsorship is increasing over time. • Be careful about Stocks that are over owned????

  31. CAN SLIM • Institutional Sponsorship • Best Institutional Sponsorship – Check Mutual Fund 36 Month Performance Rating in “IBD” B+ or Better

  32. WON Preferred Funds

  33. Industrial Groups - Sectors

  34. Industrial Groups - Sectors

  35. Industrial Groups - Sectors

  36. Portfolio Management Training

  37. 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.

  38. Stocks for review

  39. 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 sponsorship • Has a good RS line

  40. CAN SLIM Method • Teaches us: • What to buy • When to buy • When to sell • Buy on Technical's and Fundamentals • Sell on Technical's

  41. 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

  42. Fundamentals • Earnings • Sales • Sponsorship • Return on Equity • U/D Volume ratio • Cash Flow

  43. 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

  44. Importance of Cutting Losses • LOSS% • - 7% • - 20% • -33% • -50% • -75% • Gain Needed to Get Even • + 7.5% • + 25% • + 50% • +100% • +300%

  45. 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

  46. 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

  47. Portfolio Management Training • Whose advice should it listen to? • Can I buy and hold?

  48. Portfolio Management Training • Watchlist • Universal List – Maybe 100 Stocks • Ready List – 10 Stocks – Working on BPs • Buy List – 5 Stocks - Buy when Market is right

  49. 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.

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