TUSCALOOSA IBDMEETING #9

March 21, 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 3-20-2013

S&P 500 3-20-2013

DOW Jones 3-20-2013

IBD Mutual Fund Index 3-20-13

Industry Groups 3-20-2013

Industry Groups 3-20-2013

Market Pulse 3-20-2013

Market Lengths

Market Lengths

Super Cycle

Accumulation/DistributionCount

What Progress have we made?

FTD – March 5, 2013 NASDAQ up 0.93% S&P 500 up 1.24% NYSE up 1.15% DJIA up 1.81%

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 New

Northern Pacific RR – First Transcontinental Railroad – 1900’s up 4,000%

RCA - Commercial Radio – 1926 to 1929 up 1,050%

McDonalds – Cheap Hamburgers – 1967 to 1971 up 1,100%

Microsoft – Windows – 1993 to 1999 up 1,800%

See HTMMIS Pages 172 -173 green book

CAN SLIM

NewWhere do I find New?

○ New America Section of IBD○ Industry Snapshot on Mondays○ New High List○ Shopping Mall○ Google

CAN SLIM

New3-D PrintingGraphenehttps://www.youtube.com/embed/

Q_eTLPKdrHs

CAN SLIM

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

want it. Supply and Demand is more important

than opinions.

CAN SLIM

Stock with 50 million outstanding shares moves quicker up or down than……

Stock with 5 billion outstanding shares moves slowly up or down

CAN SLIM

Outstanding Shares – Total shares issued and that are in the publics hands.

Floating Supply – Number of shares in the publics hands and available for trading.

CAN SLIM

Look for companies with young and innovative management.

Big companies with old management moves sloooooow!

CAN SLIM

Watch for companies with large stock splits and split often

2 for 1 and 3 for 2 OK 3 for 1, 5 for 1, etc. Very Riskey

CAN SLIM

Companies with Stock Repurchase Plans – Very Good.

Less stock – Higher price

Stocks with low Debt to Equity Ratio

CAN SLIM

How to evaluate Supply and DemandIBD’s stock tables show stocks trading

volume for that day and the percent volume change the stock’s average daily volume in last 3 months.

CAN SLIM

CAN SLIM

Go to MarketSmith – ScreensReview C-Qtrly EarningsACC EPS Growth (Weekly)

Go to Stock CheckupReview some of the stocks in the screens

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.

Order Types

Market Order Limit Order Stop Order Trailing Stop Trade Triggers Conditional Orders

Market Order

A Market Order indicates you want the immediate execution of an order for a stated number of shares at the next available price without any other restrictions. This means your order will seek execution once it is received by the market (as long as the security is trading).

Market Order

Reasons for Market OrderPrice is less importantQuick entry/exitHighly liquid securities

Limit Order

A Limit Order indicates the highest price your are willing to pay for a security, or the lowest price your are willing to accept to sell a security. Your order will be executed at your designated price or better. This helps protect your order from sudden volatility, but it also means you will only buy or sell the security if it reaches the price you are seeking.

Limit Order

Reason for a Limit Order:When Price is most importantTarget Entry/Exit Price

Market Order vs. Limit Order

Market Order vs. Limit Order

Stop Order

Stop Market Order is an order which becomes a market order once the activation (or stop) price you specified has been reached or surpassed. Buy-stop market orders require you to enter an activation price above the current ask price. Sellers must enter the activation price below the current bid price.

Stop Order

Stop Orders can help you to limit your potential loss in an investment or to lock in profits. By setting an activation price below the market, if you are selling, you may be able to limit a potential loss should the stock price fall.

Stop Order Stop Limit allows you to enter two prices: an

activation (stop) price as well as a limit price. The activation and limit prices can be the same or you can choose a different limit price. A stop limit order becomes a limit order once the activation price has been reached or surpassed. When choosing a stop limit, buyers must enter an activation price above the ask price. Seller must enter an activation price below the current bid price.

STOCKS FOR REVIEW

Market Order

Market Order

Market Order

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

Market Order

Portfolio Management Training

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

Portfolio Management Training

WatchlistUniversal 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 Own3 to 5 Stocks

Position SizeDivide 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

NASDAQ 1973 – 1990

NASDAQ 1991 - To date

Go to Investors.com

My Preferred Method of Investing CAN SLIM Method formulated by William J. O’Neil Method taught through IBD IBD = Investors Business Daily – IBD = Newspaper IBD = Website – Investors.com IBD + MarketSmith = Success

Market Health

ChartsNASDAQS&P 500NYSEIBD Mutual Fund Index

Market Pulse IBD’s Industry Sub-Group Rankings IBD Market Wrap