CANSLIM Investing: The Strategy 99% Investors Ignore (But Shouldn't)
May 4, 2024
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Lee Tanner, an experienced CAN SLIM trader and meetup leader, shares his insights into the often-overlooked CAN SLIM investing strategy. He discusses his journey from early trading successes to valuable lessons learned along the way. Lee emphasizes the importance of being well-invested and reflects on common mistakes he made in the past. The conversation includes intriguing case studies on successful trades, the significance of entry and exit strategies, and the psychological elements of trading, all sprinkled with practical advice for aspiring investors.
CAN SLIM investing focuses on systematic stock selection through defined sell rules and key technical metrics for optimal results.
Lee Tanner's journey highlights the importance of ongoing education and workshops in refining trading strategies and understanding market dynamics.
Emotional management is essential in trading; avoiding financial pressure ensures more rational decision-making and disciplined trading practices.
Developing personalized trading rules based on past experiences fosters discipline and confidence, enhancing overall investment outcomes.
Deep dives
Introduction to TraderLine Podcast
The podcast aims to educate and enhance the trading systems of traders worldwide, providing them access to masterclasses and resources delivered by top experts in the field. Notable instructors include Oliver Kell, a record holder in the US Investing Championship, who teaches swing trading, and Stan Weinstein, who shares insights from decades of experience in stage analysis. Additional classes cover trading psychology, historical trading blueprints, and lifecycle trade strategies focused on IPOs and high-growth stocks, catering to a diverse range of trader needs. This comprehensive educational approach encourages traders to refine their skills and improve their results.
Lee Tanner's Investment Journey
Lee Tanner, a seasoned CAN SLIM trader, shares his early experiences in the stock market, which began in the mid-1980s following guidance from family who were long-time investors. His journey was significantly influenced by reading classic investment literature and subscribing to relevant publications like Investor's Daily and Barron's, which deepened his understanding of stock market strategies. Lee's initial foray into investing involved engaging a full-service broker while managing a diverse portfolio that even included junk bonds. The event of the 1987 market crash served as a pivotal learning moment about the importance of sell rules and risk management.
Transitioning to CAN SLIM Strategy
As Lee gained more experience, he gradually delved deeper into the CAN SLIM methodology championed by Bill O'Neill, refining his approach to stock selection and portfolio management. Throughout the late '90s, he encountered both successes and challenges but ultimately recognized the need for defined sell rules and systematic investment practices. Lee enrolled in numerous workshops, including those conducted by O'Neill himself, which helped him to elevate his knowledge further and adapt his strategies effectively. This period marked a crucial point in his trading career, where he shifted focus to chart patterns and technical analysis in line with the CAN SLIM framework.
Common Trader Mistakes
Reflecting on his trading history, Lee identifies several common mistakes that plagued his early investment years, particularly an inclination to hold onto losing positions and a tendency to remain under-invested. He learned the hard way about the importance of establishing sell rules and became increasingly wary of letting emotions dictate decision-making, especially during market downturns. Additionally, Lee emphasized that he often underestimated the depth of knowledge required to be truly successful in trading, which prompted a more disciplined educational approach going forward. Post-analysis became a vital practice, enabling him to examine previous trades and improve his strategy continually.
Importance of Education and Networking
Lee highlights the importance of ongoing education and building a supportive trading community. Throughout his career, attending workshops and collaborating with fellow traders provided him invaluable insights and motivated him to refine his techniques further. He suggests that traders should seek out educational resources and connect with others to share experiences and strategies, which can greatly enhance their understanding of the trading landscape. Lee's commitment to learning and adapting has played a significant role in achieving success by allowing him to navigate the complexities of investing more effectively.
Emotional Management in Trading
Managing emotions is crucial for successful trading, according to Lee, who recommends not relying on trading income for living expenses, as financial pressure can lead to irrational decision-making. Traders should prioritize their mental well-being by stepping away from trading when feeling stressed and consider reevaluating their positions regularly. He emphasizes that stock losses are part of the game, and having a set of well-defined rules helps mitigate fear and guides decision-making. Lee's experience demonstrates that remaining disciplined and following a structured strategy can provide comfort and clarity, especially during volatile market conditions.
Developing Personal Trading Rules
Lee advocates for personalized trading rules based on individual experiences and preferences while initially learning from established systems like CAN SLIM. His process involves thorough post-analysis of both successful and unsuccessful trades to continuously improve his strategies and understand his strengths and weaknesses better. Incorporating feedback from his trading history, Lee emphasizes the need to develop rules that align with personal investment styles. This personalized approach helps traders maintain discipline and build confidence, ultimately leading to better investment outcomes over time.
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Want to master the CAN SLIM investing strategy? In this episode, we sit down with experienced trader Lee Tanner to dive into the nitty-gritty of this proven method. Lee shares his fascinating journey in the markets, from his early wins to the hard-learned lessons that shaped his success.
Here's what you'll learn in this video:
• What is CANSLIM Investing? A breakdown of the key factors driving this dynamic strategy.
• Lee's Background: How his interest in stocks blossomed and how he discovered William O'Neil's methods.
• Mistakes and Successes: Lee's candid reflections on the crucial lessons he learned along the way.
• The Power of Underinvestment: Why being underinvested might be your biggest hurdle.
• Case Studies: An in-depth look at different stock case studies - Lee's successful trades.
• and much more
If you're ready to supercharge your investing journey,
Contact info for Lee: LelandHTanner@comcast.net
Enjoy!
- The TraderLion Team
Timestamps:
00:00 - Lee Tanner - Longtime Canslim Trader
14:02 - Mistakes Back in the 90’s
24:41 - Experiences Gained From Bill O’Neil In the Workshops Attended
32:26 - Buying on Strength Vs. Weakness
33:09 - AMGEN Stock
42:08 - Home Depot Stock (HD)
45:35 - Viavi Solutions Stock (VIAV)
48:52 - WEBO Stock (WB) 2016
53:20 - Netflix Stock
56:52 - Double Bottom Bases In Current Times
57:37 - NVDA Stock
1:01:02 - How Lee Picks Stocks Based On a Trend
1:04:23 - Basic Watchlist Requirements
1:10:41 - Any Weekly Routine For Picking Out Stocks
1:16:12 - Anticipation Market In Upcoming Days
1:21:22 - Daily Routine
1:30:00 - Sell Rules
1:34:46 - Trading Statistics
1:40:26 - How To Study Previous Winners/Trades
1:46:52 - Other Trading Charts
1:52:48 - Where To Find Lee/Meetup
1:54:49 - Advice For Traders Managing Stress
2:05:04 - Advice For Achieving Success/ Developing Rules
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