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INM October 2010 - Dancing With The Stars
Kenneth J. Gruneisen, Founder and Contributing Writer, www.CANSLIM.net
CANSLIM.net


I have never watched the show, but as I understand it, Dancing With The Stars is one of the most popular television programs today.  We often see highlights of the competitive dancing event involving celebrities in the typical news program. Not knowing much about dancing or how the winners are determined, my educated guess is that any award winning performance involves a lot of fancy moves with great precision. Contrasting that assumption with what has distinguished every one of the real investors I have studied in the course of this year who have achieved standout gains, all that was required was one or a few moves to significantly beat the performance of the major market averages.

Some may feel out of step with the market with too much sidelined cash. Maybe we were too timid, especially during one of the best September rallies on record. While not avidly participating in the rally, we passed on some great opportunities. Still, it is fair to say that matching the year to date gains of the major averages while not being exposed with 100% of our capital invested 100% of the time might be considered a win.

One customer simply bought one stock and is now holding it for a 75% gain. What makes that example especially nice is that it is held inside of an IRA account, thus there is no stress from tax concerns associated with the decision to sell and lock in a gain whenever the proper time may come to do that. If you are going to invest using this system which has proven to produce big gains, probably the first place you should do it is in a tax-deferred retirement account.

Dancers with lots of repetitive moves don't impress anyone, and when they fall down they cannot repair the damage to their score, even if they get back up and continue dancing beautifully. Contrast that with customers putting up winning performances, like those mentioned in the August issue (read here) who were stopped out for small losses in 2 out of 3 earlier buys this year. Had the choice been made to make add-on buys and "force feed" the winner(s), the results would have been even more impressive. Had the choice been made to repurchase stocks that were sold when later buy signals transpired, the results would have been far more impressive. However awkward it may have felt and looked, getting up off the floor and getting back on the beat as quickly as possible was really all it took to put up brilliant results.

Going 200% in during bull markets is actually recommended in the Certification program. That is to acknowledge that margin use is also working in investors' favor during such a bullish market period. As long as you were not recently betting against the market (M criteria) you are probably having a good year.

Strength begets more strength, and the window is open for disciplined investors to carefully buy high-ranked stocks, even while many pundits are expecting that markets may consolidate following recent gains.  With the new highs list continuing to expand and new lows turning up in the single digits on the exchanges some days, conditions are clearly most conducive to investors' success.  It has been little more than 4 weeks since the latest follow-through day confirmed a new rally.  Since historic studies concluded that the best winners showed up with breakouts in the first 13 weeks of a new confirmed rally, our bias through October and November remains slanted toward buying sound breakouts.

May's infamous "flash crash" provided us an example of how quickly things can change. Investors might want to keep in mind that many of the market's biggest single-day gains occurred during bear market periods, and inversely, many of the biggest single-day declines occurred during bull market periods. Perfect prancing is not what is required or even realistic. It might not always be pretty, and you are bound to fall on your butt occasionally on a dance floor as rough as this one. If the markets get jittery between now and year-end, rather than panicking, investors who remain fluid, disciplined, and unemotional will be the most likely winners.

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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