Live Out of Sample Testing of CAN SLIM Stock Selection Strategy

Abstract

This paper shows a live paper traded interpretation of the CAN SLIM system based on the stock selection strategy in O’Neil 1988. The strategy outperforms the market by 20% (S&P 500), 9% (Nasdaq) and 17% (Dow Jones) for the holding period of July 2014- February 2017. We stopped tracking the portfolios in 2017. Current results would show 4/5 stocks posting greater than 100% gains. The portfolio held positions that first passed a fundamental stock screen using the methodology outlined in O'Neil (1988) and were then selected by proximity to technical buy points. We analyze the equity curves, methodology for stock screeners using free and readily implementable tools in the paper. The CAN SLIM system is advertised that investors may outperform a broad stock market index without relying heavily on their analytic ability and while holding only five stocks at a time. The purpose is to let the winners win and cut the losers fast. The results have favorable implications for individuals who manage their portfolios including student-managed investment funds.