Sunday, May 29, 2005


Investor's Business Daily (IBD) was started awhile ago by William O'Neil. had an interview with O'neil back in 2002. Although the interview is a few years old, it's still worth a read. I used to read IBD when I was at my last job and I was always impressed by the vast amount of information/data. The newspaper and website has tons of useful information on stocks and commodities. Although I didn't pay too much attention to the editorial content (it's very conservative, very pro-Bush), I always took a look at the stock section.
O'neil has written some investment books and is the pioneer behind the CAN SLIM methodology.
CAN SLIM stands for:
  • C = Current earnings; strong growth EPS and/or sales growth at the 25% range
  • A = strong Annual earnings growth; earnings growth > 25% for the past 3 years; ROE > 17%; rising margins
  • N = New products, services, leadership
  • S = Supply and demand; volume indicators
  • L = Leading stocks in Leading industry groups
  • I = Institutional holdings
  • M = Market direction should be positive
The one thing I usually keep in mind is that IBD and the CAN SLIM method has a strong following. They have a list of Top 100 stocks in the newspaper and if a stock makes this list it can have strong movements. If IBD focuses on a company, the stock price will move.
It's a powerful tool to use not only for the vast amount of info/data O'neil has collected over the years, but to see how so many people put faith into the system and move the selected stocks.

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