CANSLIM
NO EDGEGrowth leaders share seven traits before big runs: current and annual earnings acceleration, new highs/products, tight supply, leadership, institutional sponsorship, and a confirmed market.
| THE STRATEGY | $SPX BUY & HOLD | |
|---|---|---|
| Growth a year (CAGR) | 4.9% | 7.4% |
| Return per unit of risk (Sharpe) | 0.36 | 0.55 |
| Worst fall (max drawdown) | -51.6% | -52.6% |
// GROWTH OF $1, LOG SCALE
Tested on years it never saw (from the split): 10.1% a year against 12.4% for the benchmark; Sharpe 0.18 in the training years, 0.54 after.
After 25 bps of trading costs: 3.3% a year. BELOW RANDOM
// DECADE BY DECADE
| ERA | STRATEGY | BENCHMARK |
|---|---|---|
| 1990s | 0.0% | 16.4% |
| 2000s | 0.2% | -2.6% |
| 2010s | 4.3% | 11.6% |
| 2020s | 15.2% | 14.1% |
// THE IDEA, AS PUBLISHED
William O'Neil, 'How to Make Money in Stocks' (1988); IBD methodology · 1988
- C: quarterly EPS up 25%+ vs the same quarter a year earlier (minimum varies by edition)
- A: annual EPS up 25%+ in each of the last 3 years; ROE 17%+
- N: new product, management or industry change; price breaking to new highs from a sound base
- S: supply and demand: heavy volume on the breakout
- L: leader: RS Rating 80+
- I: rising institutional sponsorship, including top-performing funds
- M: general market in a confirmed uptrend (follow-through day)
- Sell: cut any loss at 7-8% below cost
A real computation on the QuantGPT warehouse, survivorship-free, walk-forward. Gross returns, no costs except where stated. Past performance is not a promise. Findings, not advice. COMPUTED 2026-09-24 20:50 ON THE QUANTGPT WAREHOUSE. COMPANIES THAT LATER DELISTED ARE NOT IN THIS UNIVERSE YET (A FIX IS IN PROGRESS), SO THE RESULT LEANS TOWARD SURVIVORS. FUNDAMENTALS BY FILING DATE. NOT INVESTMENT ADVICE.