TUSCALOOSA IBDMEETING #10

April 29, 2013

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.

Tuscaloosa IBD is Part of Meetup

Meeting Format Market Health CAN SLIM Portfolio Management Training Stock Review

MARKET HEALTH

NASDAQ 4-26-2013

S&P 500 4-26-2013

DOW Jones 4-26-2013

IBD Mutual Fund Index 4-26-13

Industry Groups 4-26-2013

Industry Groups 4-26-2013

Market Pulse 4-26-2013

Market Lengths

Market Lengths

Super Cycle

Accumulation/DistributionCount

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%

IBD Market Wrap

CAN SLIM

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)

CAN SLIM C = Current Big or Accelerating

Quarterly Earnings and Sales per Share

CAN SLIM A = Annual Earnings Increases: Look for

Big Growth

CAN SLIM N = New Newer Companies, New Products, New Management, New High off

properly formed chart bases

CAN SLIM S = Supply and Demand How is it available vs. How many people

want it. Supply and Demand is more important

than opinions.

CANSLIM Leader

Best quarterly and annual earnings growthHighest return on equityWidest profit marginsStrongest sales growthMost dynamic stock-price actionUnique and superior product of serviceTaking market share

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

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.

CANSLIM Past Leaders

1967 - Control Data1981 – MCI Communications1990 – Qualcomm2003 – Google, Apple, Research in Motion,

Potash2012 – 2013 – LNKD, FLT, CELG, ????

CAN SLIM Institutional Sponsorship

Mutual Funds, Pension Funds, Hedge Funds, Insurance Companies, Bank Trust

CAN SLIM Institutional Sponsorship

Buy Stocks that Institutional Sponsorship is increasing over time.

Be careful about Stocks that are over owned????

CAN SLIM Institutional Sponsorship

Best Institutional Sponsorship – Check Mutual Fund 36 Month Performance Rating in “IBD” B+ or Better

WON Preferred Funds

Industrial Groups - Sectors

Industrial Groups - Sectors

Industrial Groups - Sectors

PORTFOLIO MANAGEMENT

TRAINING

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.

STOCKS FOR REVIEW

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 sponsorshipHas a good RS line

CAN SLIM Method Teaches us:

What to buyWhen to buyWhen to sell

Buy on Technical's and Fundamentals Sell on Technical's

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

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

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

Importance of Cutting Losses LOSS%

- 7% - 20% -33% -50% -75%

Gain Needed to Get Even

+ 7.5% + 25% + 50% +100% +300%

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

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

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

Portfolio Management Training Watchlist

Universal List – Maybe 100 StocksReady List – 10 Stocks – Working on BPsBuy List – 5 Stocks - Buy when Market is

right

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.

Portfolio Management Training How to buy a position?

Buy best stock first.Buy 50 to 60% of the position and if it goes

up buy the rest of the position.Then buy the 2nd , 3rd and so on the same

way.If one of your positions is not working sell it

and move your money into one that is working.

Go to MarketSmith for Stocks to review

http://www.meetup.com/Tuscaloosaibd/ Pod Cast

IBD Radio ShowIBD Editorials

The End

Cup with Handle

Double Bottom

Saucer Base

Flat Base

Square Box

Ascending Base

High Tight Flag

3, 4, 5 Weeks Tight Closes

Short Stroke

Handles

Pullbacks

More Rules