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"A Vital Source for the CANSLIM Investor" 

Sunday, January 4th, 2004 | 5:10 PM
JANUARY 2004
Volume 7, Issue 1
 

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A Great Year, Yet Be Aware of Emotional Reactions to Hype
2003 was a great year for the stock market. In fact, it was the best year of the new century. All of the major indices were up substantially. The Dow was up 25% for the year. The S&P 500 was up 26%. The Nasdaq Composite – the clear winner – was up 50%. In such market conditions, it seems relatively straightforward for investors to take a ride on the rising tide when buying stocks.

However, such bullishness can lead to over-buying. The unexpected darlings of 2003 were many of the Chinese stocks. Investors devoured them voraciously, leading share prices to unrealistic levels for new buyers to consider them, and far beyond any sound technical support. As Ken Gruneisen points out in his regular feature, “Investing for New Millennium”, at some point maybe not far down the road the Chinese stock fad will end.  Many of those stocks are already way too extended, and a prudent CANSLIM investor will not chase them, won’t buy into all of the hype for the long-term, and will not get caught up in irrational exuberance for any stock or sector.

There is a point to be made about the Nasdaq.  Overall, the technology sector has been prone to wild swings in years past. There is a tremendous expectation that the technology sector will intensely rebound, taking the Nasdaq back to the halcyon days when it was trading upwards of 5,000. We all remember the dot com craze, and how technology equities soared for reasons not grounded in hard facts – sales and meaningful profits.  Earnings!

For a good CANSLIM investor, separating the emotional expectations from the financial reality of profits, earnings and sales growth is the key to successful investing. The technology sector has certainly made some real progress in terms of earnings and profits. After the tech disasters of 2000-2002, during which time earnings shrank, it has now been easy for many technology firms to show an upturn in earnings. A smart investor will always look carefully at the earnings numbers behind the share prices and practice self-control and discipline. Tech stocks went on a unrealistically crazy run before, and that can certainly happen again should emotions get in the way of common sense.

The market omens continue to be bullish, at least for the short term.  Interest rates continue to linger at historically low levels.  Mutual funds are seeing inflows (despite certain scandals) and must always keep a high proportion of their capital in stocks. The economy continues to improve, especially in manufacturing. Even the once dreary employment picture is showing signs of brightening. But a good CANSLIM investor knows to carefully watch the market and monitor the strong sectors within the market. For a short time in the late 1990’s, easy money was to be made in technology – sadly, it couldn't last because investors were buying for all of the wrong reasons. In this new economic recovery, the leading sectors may bring us something completely different. Could manufacturing be making a big comeback and be the next leading sector? The answer comes with good research.

Keeping track of sectors means knowing which sectors are already or over-bought. The Chinese stocks are clearly over-bought, but that does not necessarily mean they can’t get even more ridiculously extended first.  The same also applies to the home building sector. The housing market will eventually run out of steam. It is inevitable.  Interest rates will rise in 2004, and that will make mortgages more expensive and harder to qualify for.  That means fewer home sales, and when that eventually happens, homebuilders will naturally get hit hard.  Dare we say some of them may even go bankrupt in the coming years, as we saw with many dot coms?

Though there are plenty reasons to be bullish now, the usual suspects need to be watched in the event the economic recovery falters. Inflation, the traditional Achille's heel of economic growth, could certainly become a problem. Or what about deflation?  The job market, while brightening of late, is also a serious vulnerability if companies continue to see the answer to improving their overall profitability through job cuts. Outsourcing white-collar employees to low-wage countries such as China and India might also seem good for some firms’ bottom line, but it ultimately drains money from the American consumers. If consumers have less, they spend less.

Enjoy the optimism for now.  It will likely stay with us longer. But keep vigilant always.

*CANSLIM.net's most timely buy candidates are analyzed by our experts in great detail in the "Stocks to Watch in This New Market "section.   

Note: Links above (in Leaders column) refer to write-ups on previously featured stocks.

- CANSLIM.net News Staff

One more reason I believe so strongly in O’Neil’s CANSLIM approach is that it keeps us from being lured into the concept stock trap. I have found it to be a huge step in the right direction for investors to make sure the companies they invest their hard-earned dollars in have a track record of great earnings growth. Once that exciting concept has been turned into reality and increasing profits are rolling in, investors can then have enough confidence in these companies to invest in them, not beforehand.

"One more reason I believe so strongly in O'Neil's CANSLIM approach is that it keeps us from being lured into the concept stock trap"

I can imagine that a lot of investors are only now waking up to the boom that has been happening in all of the China stocks. Investor’s Business Daily has recently carried articles about them as being the big investment surprise of 2003. Nobody saw this boom in Chinese stocks coming, and I fear that a lot of investors won’t be expecting it when the eventual end to their run also comes. I am not saying right now, or just when, but believe me when I tell you this China fad will end. And most of the stocks I hear investors asking about in the group have gotten ridiculously extended from any reasonable base of support, so they are risky speculations and not wise choices.

Now I am sure there are going to be some folks who will be very quick to point out that many of these recent China-related winners are showing some really strong sales revenues and earnings growth. That’s true. However, we do not want to underestimate the impact that currency fluctuations have on foreign stocks. Investors must face the inevitable fact that with more economic growth comes rising interest rates, and rising interest rates are sure to strengthen the US dollar. Since a lot of the recent strength in these foreign issues can be attributed to the US dollar’s weakness, I’ll just let you take a guess what will happen when we start seeing a stronger dollar. Don’t get caught in this trap and then start telling yourself, “I’m in it for the long term.” It has been more than 40 years since rates have been this low. Think about that one.

I feel that the prospect of a stronger dollar bodes well for the market. I know that normally rising interest rates are considered a threat to equity investments, as CDs and Money Market investments offer higher yields and lure more investors in, some would say that is bad for stocks. However, a strong dollar will mean bigger profits for most US based companies, and there is a direct correlation between current earnings and stock prices.

One thing we all know is that each and every bull market is followed by a bear market. The biggest bull market in history is what set us up for the worst bear market in history. You just saw that all unfold in the past several years. Now what do you think follows the worst bear market in history? Those who doubt the longevity of the present bull market cycle could very well be overlooking how significantly monetary policy is likely to impact the economic cycle. I am not saying that everyone up in Washington DC is a genius, but it seems they’ve been making enough of the right moves to see to it that 2004 will be another great year for investors. Stick to O’Neil’s CANSLIM concept, and be ready to take action!

-  Kenneth J. Gruneisen, Registered Investment Advisor, Source Capital Group, Inc. Members NASD/SIPC

Kenneth J. Gruneisen - A Registered Investment Advisor & Registered Principal, Ken manages a Source Capital Group (Member NASD,SIPC) branch office and offers personalized assistance. Investors with a significant financial interest in equities may inquire about opening an account by calling 1-888-237-8399 or emailing to kgruneisen@sourcegrp.com Comments contained in the body of this report are technical opinions only and are not necessarily those of Source Capital Group, Inc. 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. Source Capital Group, Inc. is a NASD/SIPC member firm. Further information is always available upon request. If you know anyone that may have an interest in receiving this or any of our other reports, please call our office locally at (954) 785-1990 or (888) 237-8399 or email kgruneisen@sourcegrp.com

Financials StockTalk News  Chart  SEC  Zacks Reports

Profile: F5 Networks Inc. provides solutions that address many elements required for successful Internet and Intranet business applications, including high availability, high performance, intelligent load balancing, fault tolerance, security and streamlined manageability.  The company has recently seen its sales revenues turning up and accelerating, and its earnings trend looks good in the past five quarterly financial reports.  The most recent quarter ended Sept 30, 2003 sales rose 17% over the year earlier period and earnings were $0.05 versus $0.01 per share (a 400% improvement).  The number of quality mutual funds with an ownership interest rose from 62 to 88 from Dec ’02 to Sept '03.  

What to Look For and Look Out For:  Any violation of its 50-day moving average would be a concern, especially so if occurring on heavy volume.  A violation of its upward trendline (rising green line), or worse, a break under its prior lows and/or a close under its December 10th close at $22.39 would be a sign of more serious technical deterioration, and thus a sell signal.  For now the stock appears to be an excellent buy candidate that has yet to offer a buy signal by breaking out over prior highs on heavy volume.  Very little resistance would be expected in the stock now, as a small amount of overhead supply remains.  A true sign of institutional buying demand would be a price rise through $27, $28, and $29. with a large volume spike (at least 50% above average daily). 

Financials, Stock Talk, News, Chart, SEC, Zacks Reports

Profile: ATI Technologies Inc. designs and manufactures three-dimensional (3-D) graphics and digital media silicon solutions. The Company delivers solutions for the full range of personal computer (PC) and Macintosh (Mac) desktop and notebook platforms, workstation, set-top box, game console and handheld markets. The risk/reward looks favorable here, and the next two-year PEG ratios at 0.15 (’04) and 1.31 (’05) indicate the stock’s price still has room to grow.  Funds now hold 14% of the shares, while quality fund ownership has increased to 179 from 129 over the past four quarters.  Both earnings and revenues have shown increases in their growth rates: over the past four quarters respectively for Feb, May, August, and November '03 comparisons are -50%, +14%, +999%, + 375% for earnings growth and +20%, +29%, +71%, and + 40% for revenue growth. 

What to Look For and Look Out For: Price has been range bound in a handle formation over the past four months following the completion of a multi-year cup (double bottom) between 3/02 and 9/03, a pattern similarly traced out by the semiconductor index (study a 3-year chart).  Near term, a price increase and close beyond its pivot point is likely to be followed quickly by another leg up. Breaking out (above the blue line) on a higher than average volume surge from the current 4-month base would be a technical buy signal that validates this choice.  It could quickly rise into the $18-$19 range.  Several prior levels of support (green and black lines) are obvious, and a close below any of them, especially on increasing volume, would be cause for worry.  A close below the black line could be considered a technical sell signal and reason to exit any long position.  Two points bear watching: (1) during the congestive period, most of the high-volume days occurred on down days (this appears as distributional action where we'd prefer to see high volume accumulation days); (2) rankings for the semiconductor group have fallen as many other stocks are trading in a similar such congestive period.

Technical Analysis: Price stayed above its 50-DMA since mid-March, until Oct-Dec when it has traded on both sides but within close range of this important short term average.  It has essentially built a 4-month flat base while hovering near its 50-day line, where institutional support usually exists in a healthy stock.  Recently, the 50 DMA turned downward toward a potential convergence with its rising 200 DMA.  I consider it a positive indication that “On Balance Volume” shows a divergence on its weekly chart. The OBV has risen much higher as price has traced the right side of a big cup—an indication that more money has been flowing into this stock than at the left side of the cup-with-handle that was formed in early 2002.  Of course, it had to work up through resistance of a lot of overhead supply to get to where it now appears poised to break out.

Financials, Stock Talk, News, Chart, SEC, Zacks Reports

Profile:  Altiris is a provider of software designed to automate, simplify, and reduce the cost and complexity of IT (information technology) lifecycle management.   Altiris’ products are used by organizations of all sizes, and in various industries and computing environments. On December 2^nd, Altiris announced the acquisition of Wise Solutions, a privately held developer of enterprise software, for $43 million in cash and stock.

What to Look For and Look Out For:   Of course, rolling back into its prior base wouldn't be good.  ATRS has shown strong support at its 50 DMA several times over the last four months, and any violation would be a major concern.  Remember the recommended 7 – 8% stop-loss rule in the event of such a downturn.  Volume for ATRS was 30% above average for the day on Friday, while volume on the exchanges was below average.  That and any further gains on above average volume in the next four days would be regarded as confirmation days after Wednesday’s strong breakout. Its fourth quarter earnings release has not been scheduled, but should occur in the last week of January.

Technical Analysis:  ATRS has exhibited excellent price-volume action in recent days, in spite of the tendency for holiday-based trading patterns to blur comparison with recent historical benchmarks.  Wednesday was a strong breakout on nearly double average volume.  ATRS gave back half of those gains in fading volume in the final two hours on Friday, following much of the broader market (that weakened near the close of the holiday week).  It is within proper buying guidelines and not too far extended from a great looking base. 

Financials,  StockTalk,  News,  Chart,  SEC,  Zacks Reports

Profile: QLT Inc. products are for use in ophthalmology and oncology.  Visudyne, QLT's commercial product, is a photosensitizer used to treat choroidal neovascularization (CNV) in patients with the wet form of age-related macular degeneration.  It is a provider in the field of photodynamic therapy, a field of medicine that uses photosensitizers (light-activated drugs) in the treatment of disease.  The company has demonstrated solid increases in sales revenues and an impressive earnings growth trend with a better than 100% improvement in the past three earnings comparisons.  Earnings per share in its Mar '03 financial report were $0.17 versus $0.06 a year earlier, Jun '03 was $0.16 versus $0.06, and for the latest quarter ended Sept 30, 2003 earnings were $0.19 versus $0.09 per share.  The number of quality mutual funds with an ownership interest rose from 89 to 131 from Mar ’03 to Sept '03.  

What to Look For and Look Out For:  Any close above its prior high close of $19.55 on 12/08 could have great significance.  A high volume breakout above $20 would be an even clearer buy signal.  Rolling back into its prior base (under the flat green line) would probably not be a good thing.  Any violation of its 50-day moving average would be an even greater cause for concern, especially if occurring on heavy volume.  Such serious deterioration would be considered a technical sell signal.  This is an excellent buy candidate that has yet to offer a new, clear buy signal by breaking out over its prior highs on heavy volume.  It faces very little resistance at this point.

Financials, StockTalk, News, Chart , SEC, Zacks Reports

Profile: Ameritrade Holding Corporation (AMTD) is a provider of securities brokerage services and technology-based financial services to retail investors and business partners, predominantly through the Internet. It offers electronic brokerage services such as touch-tone trading; trading over the Internet; unlimited, streaming, free real-time quotes; extended trading hours; direct access, and commitment on the speed of execution. It has substantially increased its number of brokerage accounts, average daily trading volume and total assets in client accounts while at the same time improving efficiency (it has lowered its breakeven point to 29,000 from 50,000, the lowest in the industry). As of September 26, 2003, the Company had approximately three million client accounts, compared to 98,000 as of September 26, 1997.  This is partly due to a successful $1.3 billion merger with rival Datek.  The company provides trading execution and clearing services for its own broker-dealer operations and for unaffiliated broker-dealers through its subsidiary, Ameritrade, Inc.   It completed an additional stock offering in mid-November.  Earnings and sales have been very strong in recent quarters.  Management’s vested interest in the performance of the stock price is very high with management owning 45% of outstanding shares. In addition, the number of quality mutual funds with ownership in the stock has increased from 66 to 151 from Dec '02 to Sep '03.

What to Look For and Look Out For: AMTD is currently in the process of carving out a second stage base after climbing 100%+ from its first breakout in May. Any high volume declines, especially if they cause the price to sink back under its 50-day moving average, would be considered worrisome technical action and a possible sell signal. A continuation of the base formation and a surge above the pivot at 14.63 (blue line above) on high volume would indicate a technical buy signal.

Technical Analysis: Technically, overhead resistance should not be a serious concern since previous highs took place more than three years ago.  If there is something to be wary of it is the gap down on very large volume in the first bottom of this double bottom base (volume is circled in green above) and the lack of volume on the rise forming the right side of the base.  Ideally, you’d like to see volume dry up as it nears its bottom then surge as it forms the right side and ultimately breaks above the pivot.  Just make sure to buy at the pivot and limit your loss at 8% or less.  

Ignore the Noise, Exercise Your Sell Discipline  - Gary Kaltbaum, www.InvestorsEdge-TM.com
As we head out of the year 2003 and into 2004, I want to wish everyone a happy, healthy, safe and prosperous new year. I don't want to sound like Scrooge but once again, as I do every year, is try to be your voice of reason. In the next couple of weeks, you are going to be inundated with the..."top stock picks of 2004"..."the big 10"..."the top 20"..."the 7 stocks for the next decade"...and so on and so forth. You will also get target prices for everything under the sun. Unfortunately, in my business, it is fashionable to predict...and predictions are what pundits give. BUT...as you know, my favorite line for the stock market is simple..."I DON'T EVEN KNOW WHAT I AM EATING FOR DINNER TONIGHT."

There are just too many variables to deal with to try and predict markets a year out. You should know that by now. You don't need me to tell you this, as every major high-paid strategist on Wall Street missed the worst bear market in 70 years. I just want to interpret the markets today and try to stay one step ahead of the action. In 2003, for these woeful strategists, the broken clock analogy finally came around to their side. Yes, the bulls finally got it right. What still amazes me is the short memory this business has. The same people that destroyed your wealth in the bear market are being paraded out like they are gurus. I am not going to mention names today because it is the holiday.

"My point is to empower you to not listen to all the noise."

One man who was been paraded on that certain cable channel I haven’t watched in 7 months was lauded for his pick of the QQQs in 2003. Unfortunately, that same man's favorite pick in 2002 was the QQQs. Oh yeah, his favorite pick in 2001 was the QQQs. Oh yeah, his favorite pick in 2000 was the QQQs. After an 85% drop in his favorite pick, he kept coming back for more...and finally he was right. All he needs is another 250% gain and he will be back to even. Amazingly, he said he turned bullish a year and half ago...and the interviewer let this statement go as the gospel.

Another Internet Fund Manager was paraded on that certain station because he was up over 50% this year. BUT...he is still down over 85% over the past 4 years. This was not brought up.

A certain TECH NEWSLETTER writer is being slowly heralded again as a TECH/ WIRELESS/ FIBEROPTIC guru as his subscribership is moving back up. Never mind that his picks went down 90%. He is having a good year this year with a bunch of speculative names. Never mind that it was the speculative picks that hammered investors.

Yes, I can go on and on and on. My point is not to put these people down. My point is to empower you to not listen to all the noise. If there is any business that has a whole load of noise, it's this one. I say go ahead...listen to these people, after all, I am a radio guy...read what they have to say...but...DO YOUR HOMEWORK. Treat your investments more importantly than you have in the past. I have met too many people that lost 50...60...70...80% of their savings because of a lack of knowledge and the lack of discipline. People spend more time on the cereal aisle deciding on Rice Krispies or Cheerios than they spend on managing their money. GET THE HINT! The market is the final arbiter...not opinion...not hope...not prayer. I know. I have tried them all.

Lastly...SELL DISCIPLINE...SELL DISCIPLINE...SELL DISCIPLINE...SELL DISCIPLINE...SELL DISCIPLINE. Since last March, you have not had to worry too much about a sell discipline. BUT...if there is anything I can promise going forward, there will eventually be another bear market. Are you just going to sit there watching your accounts dissipate or are you going to learn how to take action? I will let you decide.

I also have some comments on the current market overall.  So far, every pullback has been controlled, rotational and short-lived. What more can you say? Until that changes, the "market" gets the benefit of the doubt. We are now in the 9th month of this bull move. I have no clue how much longer it lasts or how far it goes. Shorter-term, I think the DOW-types are extended here as the DOW is about 500 points above its 50-day moving average. This will make it vulnerable to a consolidation/correction/rest...but that does not mean it has to.  Any pullback would also be buyable at this point.

Recently, I thought the NASDAQ was ready for a 10% plus correction. It hit 6% before turning right back up. It is normal to consolidate after such a move as we've seen since March.  The NASDAQ is currently rising out of a 3-month trading range.  While many tech stocks are acting toppy, a breakout above 2,000 for the NASDAQ is more confirmation that this bull move has not breathed its last breath. If the NASDAQ couldn't get and stay over the 2,000 hump, a negative divergence between it and the blue chips would remain.  If NASDAQ rolls over and fails to hold above 2,000, we can start thinking about trouble ahead again. We would just need to keep overweighting NYSE stocks as I have suggested recently.

At this time, my staff and I want to wish each and everyone of you a Happy New Year.

Gary Kaltbaum is an investment advisor with over $100 million under management. For over 18 years he has specialized in identifying and trading growth stocks in the intermediate-term time frame. He can be heard nightly on his nationally syndicated radio show "Investors Edge" on over 50 radio stations and at the Investors Edge website. Listen to live or archived shows here. He has been featured on the FOX News Channel and is regularly quoted by by CNBC, the Wall Street Journal, Dow Jones News, Reuters, and Bloomberg.

I believe that an excellent opportunity exists for the investors who wish to be somewhat conservative in where they invest, yet aggressive in what type of stocks they own. For them, I suggest investing a percentage of their overall investment dollars in the following ideas:

1. Small Cap & Mid Cap CANSLIM Oriented Stocks: The new highs reached in December 2003 by the Dow Industrials, NASDAQ Composite Index, the NASDAQ 100 Index Tracking Stock “QQQ”s, and the Internet Index and Healthcare Index shouldn’t intimidate you. Investors interested in the purchase of individual stocks should seek out companies with the following characteristics:
• Exceptional track records and increasing earnings and sales revenues
• New price highs and/or surpassing their 50-day moving averages on much larger than average volume
• Bullish chart patterns like a cup-with-handle, or flat base breakouts on 50% larger than average volume. Avoid extended stocks by always buying within 10% of the highs from a base pattern of at least 6 weeks.
• Stocks that are within industry groups that are leading the market.

Remember to cut your loses at 8% of your buy point and to place a trailing sell stop order on at least ½ of your position so that you may protect any meaningful gains.

2. QQQ’s: Yes I know, I have mentioned these for a while. Readers who have been following along with us for the past few years know that I love the Q’s. I find it important that on Monday, December 29, 2003, this “fund that trades like a stock” reached a new 52-week high of $36.42 (52-week low: $23.32). They have not gone to the moon, but the QQQ’s (the NASDAQ 100 Index Tracking Stock which represents 100 of the largest non-financial companies in the NASDAQ) is a great holding for any conservative or aggressive portfolio. Its low expense ratio of .20 makes it an inexpensive way (better than most mutual funds) to invest in some of the most powerful companies in the country. The NASDAQ 100 is a tech-heavy index tracking stock that includes an array of growth-oriented companies. The QQQ’s offer you diversification and high liquidity (the ease and speed in which a stock can be bought and sold in the market). Liquid stocks have a narrower bid and ask spread. It is a ready-made portfolio of growth and innovation.

In the past I have mentioned that the QQQ’s are best purchased under $35 per share. However, due to the upward trend in the markets, it may be okay to buy them up to $40 per share. I would still prefer to stay closer to a $35 range. As long as you are patient, the QQQ’s could be a significant part of your aggressive/conservative section of your portfolio. Since the chart action of the NASDAQ Composite may bring about a significant rally in the tech arena, it may be beneficial to incorporate the NASDAQ 100 Index Tracking Stock (QQQ) as one of your portfolio holdings right now, especially if concentrating heavily in individual stocks makes you uncomfortable.

3. A Mutual Fund that invests in dividend paying stocks: I believe that this type of investment can be quite beneficial to many investors. Funds that invest in dividend paying stocks can enhance the performance of your portfolio while offering the conservative touch needed for peace of mind while participating in the upward trend of the markets. The Fidelity Equity-Income Fund II (FEQTX) is a mutual fund that I’ve found to be performing quite well in terms of total return while providing income:
• Net Asset Value is $22.46 (as of 12/26/03)
• Load is 0%! (No Load mutual fund)
• Morningstar rating is 4 stars
• Year To Date return is 30.74%
• Stocks: 96.2% Cash: 2.5% Other: 1.3%
• Large Cap
• Expense Ratio is .63%

Soraya Nasrallah, obtained her Series 7 license in 1992, and has served in the capacity of Sales Assistant, Head of Operations Department, and Stockbroker.  Contact Soraya Nasrallah via email at snasrallah@sourcegrp.com or by phone at (954)785-1990 for assistance you with your portfolio. She will be pleased to offer ideas that suit your investment needs, and she can help you achieve the gains you have been searching for.  Miss Nasrallah has just introduced a new educational program called StockWiz News! specifically created for teenagers and novice investors, incorporating stock market basics with CANSLIM in a colorful and picturesque format. It is the perfect gift for those who just don’t know much about the world of stocks and investing! Comments contained in the body of this report are technical opinions only and are not necessarily those of Source Capital Group, Inc. 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. Source Capital Group, Inc. is a NASD/SIPC member firm.

New is Here, We Are There, Let’s Make it a Banner Year!
     Well it’s a new year and the holidays are now over!  While they were certainly wonderful, it is great to be able to settle back into my daily routines once again. So now, with resolutions in hand, it is time to get back to business in 2004. Recently, the markets seem to have given everyone a sense of optimism for the year ahead, and we at CANSLIM.net share some of that optimism. With the Dow up 25% and the Nasdaq up 50% it is difficult not to be optimistic. Taking a cue from our friend and contributor, Gary Kaltbaum, I won’t start predicting what may lay ahead for stocks. But it is certainly nice to feel more optimistic for a change.

     This past month we continued to make refinements in our service. One of the more well received changes is the addition of our new “Mid-Day BreakOuts Report”. Many subscribers have written in praising this improvement to our service. In these daily reports, we make it easier than ever for subscribers to know which stocks are the most ideal buy candidates under the CANSLIM guidelines.  In addition to the excellent hand-picked ideas highlighted in each monthly issue, bulletin or alert, other companies that are the most appropriate buy candidates to consider may appear in our daily reports highlighted in yellow as "noteworthy".

     It is important to note that we don't ever issue "buy recommendations", as not knowing any readers' particular risk tolerance, we simply cannot advise any specific course of action, and we don't feel that is even appropriate. We do our best to educate our readers and help them apply the CANSLIM methodology on a day-to-day basis. Judging by the unsolicited praise and testimonials we receive on a daily basis, it sure seems that we are certainly keeping that promise.

     As for the coming month, starting Monday Jan. 5th we will have our own daily segment on Gary Kaltbaum's popular nationwide business talk radio program called "Investor's Edge". Each day CANSLIM.net will be doing what we do best, which is offering timely reporting on CANSLIM-based stocks that are breaking out. We may also comment on specific industry groups that are leaders, talk about a few situations that have topped, or point out those that are breaking down.

     The team behind this growing publication has many goals for this year.  Without a doubt, I believe we will achieve many, if not all of them.  If you like what we're doing, please help spread the word to other investors.

As always, best wishes for your financial success.

James F. Taulman
COO, CANSLIM.net, Inc.
Editor-in-Chief, CANSLIM.net News

CAN SLIM (written here as "CANSLIM" or "Canslim:) is a registered trademark of William O'Neil + Co. CANSLIM.net is not owned nor affiliated with William O'Neil + Co. or any of their subsidiaries including The Investor's Business Daily newspaper.