In Mar 2012, Forbes ran an article on O’Neil’s CAN SLIM growth screen – a screen I am becoming increasingly interested in. According to the AAII (American Associate of Individual Investors), the CAN SLIM screen has been a top performer over the last 5- and 10-year periods as of January 2012..
What is interesting is to look back to March 2003 on the Elite Traders’ forum. After a prolonged bear market in which growth stocks were hammered, scepticism was, predictably, high, as to whether such screens can work.
I’ve actually read O’Neil’s book whilst on holiday, and it does make for some interesting reading if you are a value investor. My impression is that it is difficult to implement in practice, as it relies on being able to spot “cup and handles”, and there seems to be lots of caveats and things to watch out for. I came away thinking it was very difficult to keep in one’s head. It relies a lot on technical and qualitative factors. That doesn’t seem to have stopped the AAII, though, and their take on the method has produced good returns.
I’ve seen a couple of other sites produce long-term screens that try to reproduce his strategy, and I’m pleased to report that the results have been impressive.
Stockopedia also has a CAN SLIM screen, but it has only been operating for a year. It doesn’t have data going back to 1998 like the American site does.
Filed Under: Stock Screening,