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INM Dec '05 - This May Not Be a Wise Time to Be Hesitating
Kenneth J. Gruneisen, Founder and Contributing Writer, www.CANSLIM.net
CANSLIM.net


I keep up my “Certified CANSLIM Expert” status by participating in ongoing training offered through quarterly web-casts. Even though I have been preaching the virtues of the methodology for approximately 14 years now, I believe it is still very helpful to study reminders and new examples. Reinforcing the basics is always important. However, the web-casts I participate in are especially helpful because of their timely coverage of current market conditions and several specific examples. In a lot of ways, this is exactly what we do for our readers with each monthly issue.

According to the feedback offered by the presenters during a recent web-cast hosted by the folks at my favorite business newspaper, let me tell you what has happened in the past month and a half. Most fans of CAN SLIM™ investing, even those who knew that they needed to wait for the major indices to get a confirmed rally, failed to get proactive about initiating new buys after the follow-through day on October 19th finally flashed investors a green light again. Why? Rallies which investors had previously tried to take advantage of had oftentimes yielded only sporadic results, making many investors question the wisdom of buying aggressively into confirmed rallies. While many investors did an admirable job of limiting losses and steering clear of potential trouble, when the buy signals started flashing they still sat paralyzed on the sidelines.

Let’s take the market’s recent action as a reminder that the reason we wait and preserve capital in the tough times is not so we can sit parked in cash and watch countless stocks zoom higher in a new market rally. Missing out on a bullish market sprint is not something to beat ourselves up about. To some degree, I can also be counted among those who have watched numerous breakouts quickly tally impressive gains but failed to fully exploit the best opportunities.

Being selective and patient are important behavior traits for investors, and one of the things we know is that in a healthy bull market there is always a steady stream of good ideas. So, the right thing to do is to watch and observe the market very closely in the days ahead. Historically, as is oftentimes pointed out, the November to January period has been a favorable time period for investors. In other words, do not be discouraged, but be encouraged by the latest market action.

Plenty of times before in this column, I have reminded investors that it only takes a few smart stock purchases during a period of cooperative market action to see an investment portfolio’s equity multiplied several-fold. Those skills of being patient and selective can pay off very big for you when you ultimately end up concentrating your investment dollars in a high-ranked leader that rises substantially. The best way to be ready to do that is to monitor the day-to-day activity, looking for only the most exceptional candidates, not settling for questionable or mediocre choices.

Sure, the prices for gas and oil are still rather high, and interest rates probably will continue rising up from historic lows. One positive spin on matters is that, over time, falling gas prices can actually serve as a source of additional spending as consumers and businesses spend less on fuel. Falling energy prices have been known to spur on sustained rallies in previous market environments. Also, if the Fed decides to pause instead of continuing to raise its overnight bank-to-bank lending rate, the act of easing up could help inspire even more confidence in stocks.

What is also important is to watch where the market gets its leadership. Energy, metals, and other commodity related areas have seen plenty of strength in the recent market. However, it is worth remembering that a hot new product or service has been a key characteristic in 95% of the market’s big winners. Rather than latching on to something that is cyclical in nature, it would be preferred to find a truly exceptional growth company in an industry group that is demonstrating market leadership. Technology, retail, and medical stocks are commonly included among a healthy bull market’s top performing leaders. It is time to be proactive about buying within the proper guidelines when you spot a high-ranked candidate in a strong group.

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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