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INM Oct '05 - Standing on the "Rock" of CAN SLIM®
Kenneth J. Gruneisen, Founder and Contributing Writer, www.CANSLIM.net
CANSLIM.net


While visiting the sunny southern coast of Spain, I looked out at the Mediterranean Sea and spotted the very recognizable silhouette of Gibraltar.  Although I had never seen it before, the shape of the “rock” was easy to distinguish from other mountains on the visible skyline.  Later, I found myself inspired to relate this observation back to what I do at work every day – spotting CAN SLIM stocks. 

 

Gibraltar is in a very smart strategic location. It juts out into the sea and helps to create a very tight bottleneck through which all ships entering or exiting the western mouth of the Mediterranean must pass.  In a similar way, CAN SLIM stocks are very smart strategically.  They are standouts, and once you know their characteristics, it is hard to pass them by without stopping and recognizing them.

 

On a tour, I was told that the entire territory of Gibraltar is less than six square kilometers. For such a small piece of land, the nearly 1,400 feet that it rises above sea level is definitely dramatic and extraordinary.  On clear days you can see across the Straits of Gibraltar to the northern tip of Africa, approximately 14 miles away.  Well, I don’t think it would be fair to say that every single stock that rises substantially must pass through the “Straits of CANSLIM”, but your odds of spotting a huge winner are definitely helped by always being on the lookout for high-ranked leaders that stand above the rest.  And if you are at all familiar with some of the big CAN SLIM-based winners, of course, you also know how dramatically they can rise in a short span of time.

 

Some things about Gibraltar do not seem to make a lot of sense to visitors.  Why is this one small, unique chunk of land actually U.K. territory and not a part of Spain?  To a guy from Florida, like me, this seems about as ridiculous as if Key West was part of Canada, such that you would have to show your passport and go through immigration whenever coming or going.  The idea of making Gibraltar officially a part of Spain has been proposed on several occasions, however, whenever given a chance to voice their opinion, by vote well over 90% of the approximately 30,000 residents of Gibraltar wish to stay exactly as they are. 

 

Similarly, there are often things about CAN SLIM stocks that do not seem right to certain investors.  They will look at a stock and perhaps be nervous about its low average daily volume. If a stock has risen substantially, they might be afraid it is too late, so they might fish around for a bargain in the penny stock arena instead.  Or they may be extremely worried about small cap stocks and decide that they want to own blue chips. If company management owns a large percentage of the shares, such a huge insider interest might spook some investors.  The point is, you can always find something to worry about that is not perfect in a stock, and it is easy to start second guessing your selections.  If you want a chance at above average gains you eventually have to stick your neck out.  So, sometimes you need to be able to accept certain things as they are and just know and have confidence that employing a proper sell discipline will protect you in the event of a downturn.  Please do not take that as a suggestion to be too lax with the guidelines for proper purchases. 

 

What else can be said about Gibraltar as it relates to CAN SLIM?  Those who understand and refer to the legendary landmark in speaking would say that when something does not move or change it simply stands there “like the rock of Gibraltar” and does not budge.  When hearing occasional suggestions by those individuals who challenge whether or not CAN SLIM investing still works, I know better than to question it. The methodology is as effective today as it ever was, even though there are those who might suggest otherwise. 

 

Whenever a company produces outstanding earnings results, increasing at least by +25% in quarterly reports versus the year earlier (satisfying the “C” in CAN SLIM), there will be institutional money managers who take notice.  They want to own fundamentally superior stocks, so they buy.  Their buying is has the logical impact on the supply/demand situation, and a direct impact on what happens to share prices.  So, this is the rock upon which I will continue to stand.

 

About Kenneth J. Gruneisen, Founder and Contributing Writer, www.CANSLIM.net :
Kenneth J. Gruneisen has successfully completed the CAN SLIM® Certification Program.  Mr. Gruneisen became a Registered Representative in 1987 and his career includes experience offering personalized assistance to investors with more than a decade of experience as a Registered Principal managing a branch office.

The recommendations made by CAN SLIM® certified individuals are their own and may not be attributed to the CAN SLIM® Certification Program, William O'Neil & Co., Investor's Business Daily or their affiliates. The CAN SLIM® Certification indicates only that the individual has successfully completed the CAN SLIM® Certification Program. CAN SLIM®, William O'Neil & Co., Investor's Business Daily and any of their affiliates are in no way responsible for any loss or damage caused as a result of the services provided by these individuals.


Comments contained in the body of this report are technical opinions only and are not necessarily those of Gruneisen Growth Corp. The material herein has been obtained from sources believed to be reliable and accurate, however, its accuracy and completeness cannot be guaranteed. Our firm, employees, and customers may effect transactions, including transactions contrary to any recommendation herein, or have positions in the securities mentioned herein or options with respect thereto. Any recommendation contained in this report may not be suitable for all investors and it is not to be deemed an offer or solicitation on our part with respect to the purchase or sale of any securities.

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The recommendations made by CAN SLIM® Certified individuals are their own and may not be attributed to the CAN SLIM® Certification Program, William O'Neil + Co., Investor's Business Daily or their affiliates. The CAN SLIM® Certification indicates only that the individual has successfully completed the CAN SLIM® Certification Program. CAN SLIM®, William O'Neil + Co., Investor's Business Daily and any of their affiliates are in no way responsible for any loss or damage caused as a result of the services provided by these individuals.

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