CANSLIM term sunne me ek slimming tea ya ek slimming belt ya weightloss ka koi shortcut technique ka idea deta hai na?, doesn't it?
Lekin dost, Canslim has got nothing to do with weight loss or slimming or any such thing.
Instead, it is a stock market term, an acronym… very much like Wyd or LOL or ROFL … isse use kar ke, traders growth stocks select karte hai, using combinations of fundamental and technical analysis.
Samjhane ke liye mai ek Kahani sunatha hu. Mere bete ke school mein annual drama selection bahut seriously aur secretly kiya jata jai. Anyone would think they're selecting the next president. No teachers are allowed, parents bhi nahi. The students appear before a panel of judges and selections are made. Somehow the school ends up with a brand new hero and heroine every year. Principal ko bahut samjhane ke baad inho ne school ka secret bataya: She said that they have theater personalities, the school psychologist, and herself present because they use a combination of techniques to select students for various parts. The theatre personalities of course judge the students' acting skills. The psychologist is there to decipher what the student feels - confidence, stage-fright, delight, cautious excitement … she's there to see if the kid can withstand the pressure of being a star. Last of all, principal ka role hai to see if the child is disciplined or not. Their secret to finding a new star every year is to use a combination of analysis, during the selection process.
Canslim bhi rising stars select karte hai… or to be more specific, it looks to identify growth stocks. Growth stocks woh stocks hai jinke, prices are expected to grow at a rate significantly higher than the market average. Canslim se investors are able to select high-growth stocks before institutional funds are fully invested and it uses both fundamental analysis and technical analysis.
Experienced investors zyaada time Candlin use karte hai. But before we get into why that is, let's take a closer look at what exactly C A N S L I M stands for and what it entails.
Canslim 7 key criteria ko consider karta hain. Let's look at what they are:
C stands for Current Quarterly earnings per share:
Obviously, potential investors are keen to see a high quarterly earnings per share. Pichle quarter se kaafi growth chahte hai. Traders and investors who use CANSLIM will only pass a stock or consider a stock if it shows a minimum of 20% growth in earnings per share over the previous quarter. The higher the better, lekin the minimum qualifying amount as per the norm, is 20%
A stands for Annual Reports:
Annual reports must be scrutinized before investing in stocks. In the case of a CANSLIM analysis, investors are looking for a 20% growth over the prior year, or a 25% three-year-average for a company to qualify among the selected growth stocks.
N stands for New:
Koi bhi new product ya new management CANSLIM process mein examine kiya jata hai. Naye events like acquisitions and mergers or even a change in taxation that affects the sector are also taken into consideration as part of the CANSLIM analysis.
S stands for Scarce Supply:
We're talking straightforward demand and supply economics here. Supply ki kami aur saath mein zyaada demand zyaada time stock prices ke liye acchi baat rehti hai kyuki iss se stock price badh sakta hai.
L stands for Leading vs Laggard Stocks:
Leading stocks woh stocks hai, jinki performance better than the industry average rehti hai. Lagging stocks are those that underperform as per the industry average. Relative Strength Index, jisse RSI bola jata hai, is used to identify whether or not a stock should be selected. The company needs to have an RSI of above 30 if the stock is to be selected.
I stands for Institutional Investors:
Yaha pe dost, balance bahut important hai. Zyaada institutional investment nahi chahiye aur zyaada kam institutional investment bhi nahi chahiye. You're looking for a good amount of institutional investment, by a few well known names. You want to hit before the curve, that is before the company's shares go to a ton of institutional investors because then you have clearly lost your early mover advantage.
M stands for Market Direction
Experts bolte hai ki 75% of the time stocks trade in the same direction as the market. Therefore CANSLIM analysis will identify how much in sync with the market, the given stock is. Investors will typically seek out stocks that outperform the overall market's performance during a bullish trend.
As you can see CANSLIM mein bahut kaam hai aur bahut time-consuming process hai. It involves seven separate sets of analysis, which is no joke for your average trader. It appeals more to- more experienced traders.
Agar aap isse manage kar bhi sakte ho, kabhi mat bhulna ki - it cannot offer you a 100% guarantee that the stock will grow as predicted. Ji haan, you're making a tremendously informed decision and covering all your bases with seven whole different analyses. Phir bhi the fact remains ki the stock market is unpredictable. Isse yaad rakhna jab aap stock market investment ka amount choose kar rahe ho. Invest only what is spare capital aur hamesha careful rehna, no matter how sure you feel.
Doston, that’s all we had in today’s podcast, lekin why let the learning stop? Check out our other podcasts, or learn more about markets on our website www.angelone.in
Tab tak ke liye, alvida. See you in the next podcast!