The Canslim Strategy
The Canslim strategy is adopted by investors. It is a device that helps identify growth stocks; it was invented by Investor's Business Daily editor William O'Neil.
It helps find and analyze stocks both fundamentally and technically and is very useful for the investors. Canslim is a mnemonic and has seven parts which stand for various aspects. C stands for Current Quarterly EPS and earnings should exclude special and one-time items. A is for Annual earnings and they should increase by 25% in three years. N stands for new product or service. A new product greatly helps in sales and innovation is very important. S is for supply and demand and that should be good. L stands for Leader or Laggard, the leading stock that people can keep their eyes on. I of the mnemonic Canslim stands for Institutional sponsorship: it is imperative that we watch institutions like MFs, FIIs, DIIs etc try to get the latest that is unknown to ordinary investors. M is for Market indexes.
The main idea behind Canslim is to cut down losses up to 7 or 8% and maximize the gains and benefits. But the strategy of Canslim needs a lot of reparation before you can actually start investing.