|How to Make Money in Stocks: A Winning System in Good Times or Bad
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From the school of unemotional investing comes the classic How to Make Money in Stocks, by Wall Street analyst and publisher William O'Neil. Readers new to securities will find it an excellent primer, one that relies on time-honored indicators such as quarterly earnings, market capitalization, and daily indexes. O'Neil's study of winning stocks stretches back to the 1960s, and he shares his insights here, describing what characterizes a growth stock, when to cut your losses (at 7 or 8 percent, no more), and how to spot a market top.
The techniques in How to Make Money in Stocks are hardly revolutionary, but therein lies their strength, as O'Neil claims his is "a winning system in good times or bad." Investors interested in Net stocks might be disappointed--the author's first rule is that a company must show a pattern of growing profits, which disqualifies many dot coms. (Try Rule Breakers, Rule Makers for a different take.) O'Neil's approach to stocks is, above all, rational, and he pays little heed to market hype.
Those new to investing would do well to read this book before embarking, and even more seasoned traders may find How to Make Money in Stocks a refreshing return to basics. Markets may swing bull and bear, but O'Neil promises to stand firm. --Demian McLean
William J. O'Neil's proven investment advice has earned him millions of loyal followers. And his signature bestseller, How to Make Money in Stocks, contains all the guidance readers need on the entire investment process from picking a broker to diversifying a portfolio to making a million in mutual funds. For self-directed investors of all ages and expertise, William J. O'Neil's proven CAN SLIM investment strategy is helping those who follow O'Neil to select winning stocks and create a more powerful portfolio. Based on a 40-year study of the most successful stocks of all time, CAN SLIM is an easy-to-use tool for picking the winners and reducing risk in today's volatile economic environment.
- A Good Book for the Passive Investor
This book is very cheap. It offers a few insights that are significant for individuals who are just starting to become interested in the stock market. The specific strategies that are offered in this book are not very effective. (Although O'Neil does demonstrates the important concept of not letting your losses run)
For example, a stock that has lost 50% of its value would require it to double in order for the original investor to recover his money. Therefore, it is important that the investor listens to the market over his or her own perceptions. It took me a while to understand this concept. The market is very narcissistic and tends to listen only to itself.
Aka "Never catch a falling knife"
The only thing that I disagree with O'Neil is that he is not a fan of shorting or opinions. It is impossible to simply go long all the time. Although it is impossible to time all the rallies correctly or even the majority of them, you only need to get a few correctly to be very well off. A put or call option can seriously help an investor as long as they are buyers and not sellers.
He doesn't give you a good idea of how to follow the paper trail. For conservative investors, I would recommend The Aggressive Conservative Investor.
For traders, I would recommend Riding the Bear and Sold Short : Uncovering Deception in the Markets
I think its important not to completely follow whats the book and it is always important to see how the markets react. The market knows more about itself than everyone else. None of these books are perfect, but it is suppose to give the individual a better idea of the stock market. No one can win all the time, so its important not to let your losses run while you always should let your profits run (investor) or take it without being too greedy (trader).
The most important aspect of this book can be summurized in a few points.
1. Never let your losses run (Don't forget this)
2. Never answer a margin call (Make sense 90% of the time)-Then again, if you are getting a call, it means you forgot rule 1.
3. It is better to be an investor of a failing company in a rally rather than an excellent one going down (Chase rallies at the right time)
4. The market doesn't always care what everyone believes it right. (This includes news channels, gov't, you, or the "experts"
5. Don't buy options that have little time value.
6. Buy stocks at their 52 week highs (Bull high and sell higher)
7. (me) Short stocks at their 52 week lows (Short low and cover lower)
William J. O'Neil is pretty flexible. He has a rule where you take a 25% profit and get out with a 7% loss. This is a controversial strategy. He also demonstrates the concept of buying stocks at their 52 week highs and avoid them at a 52 week low. I think the most important thing in trading or investing that he doesn't go through is the concept of learning to sacrifice profits. Sometimes, it is necessary to sacrifice some profits in order to risk a lot when the odds are in your favor.
(I don't follow this strategy, but it makes sense to go long on growth stocks without dividend in a bull market and short them down on a bear one.)
I would recommend individuals to practice with a only little bit of money (a few hundred for traders). It is better to lose money making a right decision than winning money by chance. For investor, you can try a thousand. Oh yeah, don't ever gamble with money that you will need or you can't afford to lose. Play with money only if you are ready to lose it....more info
- How To Make Money In Stocks
Solid advice for building a sound trading system. Not for "technical analysts". Multiple sales pitches for "Investor's Business Daily". ...more info
- Hey, lazy traders, Stay away from this method!
It's not likely that the most of the readers of this book will practice CANSLIM paradigm diligently to success. Do you want to know what the reason is? The reason is very simple. Most traders are lazy. They don't want to work too hard in the market. Instead, they want Get-Rich-Quick schemes to instantly satisfy their greed. Thus for that reason, this type of trading style is largely untapped and under-exploited by the majority
of retail traders. However, for the traders who went around Wall Street blocks many times and understand the core value of hard work in trading WILL DEFINITELY BENEFIT from this book. To the ones who doubt my statement, I want to point out the fact that there are indeed long lists of roster which contain the names of the traders who succeeded with many different variations of 'Growth Momentum Stock trading'. Just search on the web. You'll see what I'm talking about. ...more info
- Read it at the library and save your money...
Perhaps the greatest investment that could be made regarding this book would be to read a copy at the library and deposit your money into an interest bearing account. Buying it assures a loss of the purchase price, in addition to anything you are silly enough to invest using this 'method.'
Statistically, there is no correlation between returns of a stock from one period to another. In simple terms, they are random. Mr. O'Neil is pretending that he can somehow predict a random event. Believers of this probably also think they can consistently predict roulette numbers and die rolls. There is a disingenuous population of commission seeking, transaction-fee collecting charletans telling everyone they can 'beat the market'. At least the casinos offer discounts on buffet dinners to their victims. ...more info
- How to make money in stock
I found this book very valuable and useful in understanding trading and stock business. The bookseller sent book in very good condition and in time. I would again would purchase book from this seller....more info
- Everything here
Everything I ever wanted to know about stocks and stock market is here.
Sure it is not a "book for dummies". Reader must have some initial knowledge on financial terms and concepts.
It's not a "get rich quick" book. It has no promises in it to earn you a billion overnight.
As english is not my native language, I can't reccomend it or not for beginners. I am a beginner however.
Beware: personally I didn't earn a dime in stock market until now and it's my first book on finance ever read. :-)...more info
- Start smart
1] One of the best bangs for your buck; more detailed than any other top trader interviewed by Jack Schwager.
2] Explains tech analysis better than most & Cliff Droke does also ; gems like novices want to much with too little work.
3]Explains buy high & sell higher- warning about overhead resistance,which may not matter much in strong bull market.
4]Overhead RESISTANCE is like you see a traffic jam UP ahead, so you turn around with your money in you wallet now.Overhead resistanse looks like a traffic jam on charts and some investors turned around [sold], because of congestion, & lack of progress in a reasonable, well measured time period. ...more info
- Buy High >>>----------> Sell Higher
How to Make Money in Stocks is a classic that helps investors hone their skills through the description of CAN SLIM, an acronym for a set of rules presented to help guide investors toward identifying winning stock investment opportunities and implementing effective money / capital management methods.
The following pointers go far to encapsulate the CAN SLIM system...
(1) Use both fundamental and technical analysis to find winning stock ideas, (2) Monitor both individual stocks and general market conditions and (3) Use a disciplined money management technique that cuts losses and lets winners run.
Mr. O'Neill details his approach for each activity.
CAN SLIM is an approach that takes some practice. Ultimately, How to Make Money in Stocks argues for a disciplined buy high / sell higher strategy - these work very well in rising markets. Investors that ignore the presence of a Bear Market will get hurt. Mr. O'Neill is a pro and goes the extra mile to point out both the potential risks and potential rewards associated with his technique....more info
- A plug for IBD...
I bought this book after I heard about the CAN SLIM method. This is the acronym of traits that O'Neil looks for in picking stocks. I'd say only 15% of the book is good, relevant information. And even less if you haven't read other books and are knowledgable of the lingo. The rest of the book is an advertisment for his Investors' Business Daily publication.
I've learned alot more from other authors such as Tom and David Gardner and their Motley Fool collection....more info
- not that good.very confusing
I dont think that you will make a lot of money in his way.He is distant, doesnt explain cearly all his methods..He makes a lot of publicity of HIS "investor daily publication", and the more you read, the more you get confused.After reading a couple of good investing books by famous writers, I get more confused with his book ( cup with handle patern,can slim program, bla bla bla, ..)It doesnt follow any fundamental at all,and his cocepts are way outdated.I don't consider myself a novice, but really this book makes me fell like a jerk ,dont explain well,and didnt help me a ALL...more info
If you read, mark, study and learn the material in this book you will make money in the stock market....more info
- The best book for individual to start investing
There is a big difference between investing institution and investing individual. This book is for individual. It has all you need to get idea about stock market and!!!! it gives you stratagy to invest - growth stratagey. I am Russian who was unfamiliar with workings of capitalism. I started using this book with their web investors.com and been making 20% monthly investing my $2000. This book also about sucess in stock market and in business and it is very inspiring. I think I have read more then 20 different investment books and this book is a must read!...more info
- good book
A lot of useful info in here. I tip my hat to the writer. Good work... writing a book I loved reading....more info
- Best websites that follow O'Neil's CANSLIM
The best websites that follow O'Neil's CANSLIM strategy are www.gilmoreport.com, run by two market wizards, and www.canslim.net. Though not CANSLIM, I also like www.decisionmoose.com....more info
- CAN SLIM - same as most diets
The techniques suggested in the book are theoretically sound but like all security recommendations, once they are put into practice you realize that they are among the biggest frauds perpetrated on the American public. ...more info
- One of the worst investing books ever
When I bought this book, I 'hoped' that it will help me invest better. Turns out, it's an entire ad for IBD and CANSLIM (more like CANSCAM). This book was probably the most useless book I've ever read. Why? Because he constantly talks about EPS and why it's the king of the stock market. Reality is, just because a company has a good EPS, or even a good percent increase in EPS, DOES NOT make it a good stock to buy!! And he drills the opposite into our heads with this book. I read the first 50 pages, and knew that this book was trash. At least I can return it and get my money back so I can invest it in a better book....more info
- How to LOSE money in stocks!
The popularity of books like this one explains why so many people lose so much money in the stock market.
The book puts too much emphasis on the most useless techniques of technical analysis. The use of chart patterns that O'neil loves is closer to astrology than finance.
The book talks about fundamentals (earnings, growth, etc), but in a very limited way. Using fundamentals according to O'neils way can easily make you lose your money!
A much better book on growth investing is "The Little Book That Makes You Rich". A good book on technical analysis is "How Technical Analysis Works". I also recommend reading "Evidence Based Technical Analysis" which shows how limitd technical analysis is.
Decent book. Time could be better spent by finding an online article on CANSLIM. Far too much IBD (Investors Business Daily) promotion. If you're planning on subscribing to IBD I suppose with would serve as a good instruction manual with some old examples. ...more info
- Great reading.
Great book, full of information. Well studied strategies. Easy to understand - although a couple sections make take two readings....more info
- Gave it 3 years to work...it didn't
I read this book from cover to cover twice including the 1rst edition and I had serious problems making money using the system (I didn't). It tauts the huge returns of others using the system in the past but after subscribing to his paper and more and using his recommendations, one of 2 things happened:
1. even though it was bought at the exact buy point the stock would go up 1 or 2 % then get stopped out
2.the best looking stocks were the ones that were so thinnly traded that you couldn't invest much.
A lot of time was spent waiting for "confirmred rallies " which usually turned out to be nothing. Now I don't know if at one time this was a great way to make huge money, but it isn't now (at least for me). Maybe wall street caught on to it and preyed on those using it. the book and IBD make you believe that their way is the only way and to ignore other styles, which is what it is supposed to do, but looking back now, I wish I had expanded my horizons and tried something else at the same time. I'm finally making $ since I abandoned it and went with trend trading.
- Come up with your own decision and reasons on this book
One of extraordinarily popular books on stock-picking and trading books. Most deluded cult followers will love it, some very few will hate it. It is up to you to make up your own mind.
Heavy focus on
-recognizing Cup-with-Handle pattern
-cutting loss at 7%
-playing the game during bull markets and staying away during bear markets
-using the newsletter IBD (Investor's Business Daily)
Try these out for additional education
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Crash Proof: How to Profit From the Coming Economic Collapse (Lynn Sonberg Books)
Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free
High Probability trading
A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing (Revised and Updated): The Time-Tested Strategy for Successful Investing (Revised and Updated)
All About Asset Allocation
All About Index Funds: The Easy Way to Get Started (All About Series)
The ETF Book: All You Need to Know About Exchange-Traded Funds: All You Need to Know About Exchange-Traded Funds ...more info
- One of the best strategies in the bull market
It illustrates how ideal winner stocks look like and what their featurs are. How to pick winners depending on fundamental and technical aspect. When to buy, cut losses and when to sell. What the common mistakes investores make. ...more info
- Can be a Dream or a Nightmare
This book is dangerous because it leaves an investor in the dark when it comes to chart reading. CupNHandles, Double Bottoms, blah blah blah. The truth is this book only shows investors how to interpret so called "pivot points" which in my opinion are not pivot points because they are rarely near true resistance or support levels. Also, the way O'neil explains how to spot market tops and bottoms is laughable. Many Canslim followers are lost when it comes to everyday price movements. All they understand are "pivot points and breakouts." It's like children who look at a map and can only recognize 1 city. To be truly successful you need, in my humble opinion, to understand trendlines, Bollinger bands, MACD, and that stocks for the most part either trend or trade in ranges. Also, play around and draw trend lines like crazy on some charts. After a while one should see that price movements are not random, but are strategic in trying to achieve an advantage on the opposing side as to which way a trend should occur. What you should recognize is that after a side (longs or shorts) loses the battle, they often times leave or join forces making a stock continue to trend up or trend down. If you pile on after they have already piled on, which is what O'neil advocates, they will crush you one at a time, multiplied by millions, using your 8% stop loss rule. Moreover, I can't tell you how many times breakouts fall back 8% below their "pivot point" to a trend line and then continue upwards from there. CupNHandle patterns are great if the pivot point is within 6% of of a trendline, but they rarely are, so beware. Why am I explaining this? Afterall, everybody is filthy rich using CanSlim. However, there are many things I agree with. Those rules being: buy quality, look for growth, buy strength, cut losers short, don't argue with the market, don't average down in price unless you are highly skilled, I assure you, you aren't, and let winners ride so misinformed, blind CanSlimers will purchase your shares from you. This book is great if you couple it with a technical trading book. Alone the book is a nightmare. ...more info
- Blasting the myths off!
You can't beat 50 years of research and most of it hands on. Unlike other research that just analyzes past data without ever getting hands dirty, successful investor and founder of Investor Business Daily's William O' Neal presents what most fundamentals-only and value investors find hard to believe - average cost up; forget low p/e stocks, don't buy and hold forever, technical analysis matters as much as fundamental analysis, markets can be timed, etc. The list gets more incredible for such investors.
After investing for more than 8 years, I happened to find this book. I don't blame myself, instead I consider myself fortunate - better late than never! The CANSLIM approach sure sounds like good investing criteria to seive out possible candidates, but that is not all. The key is to identify when to buy stocks and when to sell them. You will learn about pivot points - points when to buy stocks - along with high quality criteria to consider before buying.
While I started of as a fundamental and value investor, I have slowly started to pay attention to technicals and that has paid off more. Thus this book has more relevance at this stage of my investing career.
The first part of the book clearly explains the CAN SLIM approach with numerous examples and first hand accounts of big-wigs failing ignoring market signals. The second part is the gem - it highlights nineteen common mistakes most investors make, when to sell and cut losses, when to sell and take profits, etc. Even if you don't believe in the CANSLIM approach, this part is a must read for any investor. The last part gives you sound advice including how to use IBD and the web site to identify winning stocks, examples of great winners of the past with extensive chart analysis.
If you are just beginning to invest and find it hard to believe in this approach, just follow one of the rules in the book - don't take more than a 7-8% loss. That alone will keep you up from the most common misery in investing. If you are convinced, however, let this book not be just another book you read. There is too much practical advice to ignore. However, keep in mind - this book is about buying the right stock at the right time. The timing is key here; very, very few people can time it right most of the times. Good luck, anyway!...more info
- Best Investing Book
This is the best book on Investing that I've read and this is the system that I follow for the most part. O'Neil is one of the best investors / traders and is worth over 200 million for a good reason; follow his system. I've been using this system for many years and after a large sample size of trades I've made large percentage gains. For example, my last big winner was TASR which I found beneath the radar and before it was hyped by mass media; it was a technical chart pattern that O'Neil talks about called a High Tight Flag; I trippled my $ on margin in one month. Some say that what I did is dangerous or risky but I was ready to take a 3% - 5% loss quickly if I was wrong. This was a small price to pay for the upside potential. Besides having several winners and a few super winners, I've also had quite a few losers which are part of the cost of being a trader. Buy this book and attend his seminars; you won't regret it....more info
- A little overated but yes a must read for a new trader
I would say as far as bang for your buck you can't lose on this one if you've never traded stocks before.. However you would want to get Technical Analysis of Stock Trends 8th Edition (5 stars in my book) if you want to be a serious / well informed trader..
O'Neils book briefly touches on some major issues and is more geared toward the IBD (Investors Business Daily) trader.. It's basically a "system" to trade stocks refered to as CANSLIM..
CANSLIM is interesting but it does not apply to the style of trader that I am and if your intested in options he seems to be kind of an anti-option trader at least in this publication (but still very important concepts that all traders should know)..
O'Neil's IBD also is primarly concerned stocks that are not "low priced" so you can forget about using this system on stocks that cost $10-$15 but nevertheless you can still apply the principles yourself.. If you have'nt read this book you should but everything in it is not to live or die for.. Must read but develope your own style and use some of his principles as part of a foundation to become a good trader.
One thing for sure you'll learn how to read stocks listed in IBD.. This book is one of the books that got me interested in Technical Analysis.. It is well written but sometimes over opinionated but very useful.. Don't forget no matter how you rate a stock the data is only is good as the source and may not be accurate as you think.. May all your trades yield you fortunes :).....more info
- What this book is about
Some reviews think this book is about
* using technical analysis to buy and sell stocks in general, it is not, it is about buying the best of breed (in the very best industry groups) when the time is right and only this point is determined by looking at the chart, once this is passed in strong volume, chances are good that prices will move higher. (VOLUME is one of the classic indicators, see Livermore, Darvas etc)
* it is pushing IBD too hard, I agree on that, and I would give it 4.5 points if it were possible because of that, but IBD and esp. dailygraphs.com is simply saving you hours every day.
* think there are still too many good stocks around even in IBD and they don't say buy or sell this stock now. I remember having read Livermore's thoughts via the "make an easy buck in the stock market" crowd, "how easy is it to make a quick buck with brain surgery?" It takes a lot of work everyday to check the potential stocks.
* not all chart patterns are 100% up to the rules, this is correct but one would also check the daily charts and this might explain a bit.
Overall the book contains top advice based on old truths.
Another book that has lots of charts and explains the stages/cycles of stocks is Weinsteins "Secret for profiting..." Weinstein has good suggestions for longterm stop movement, while Weinstein is not interested in the quality of the company, it is worthwhile to read it because of the stock stages.(as mentioned in O`Neils book on when to sell, the quality of the stock -e.g. stellar growth outlook- is not important only price/volume action - a hint for DISTRIBUTION, in the stock market the future is now)...more info
- works, but you need the right kind of market
CANSLIM works, but you must have a momentum market to get the best results. In choppy or down markets, this strategy leaves a lot to be desired. For that type of market, see "How Markets Really Work."...more info
A must have investment book but this method requires a lot of close monitoring of the market which most of us can't do as non-professional investors....more info
- Old book but information still applies to current markets
"How to Make Money in Stocks" has been around for more than 2 decades now, but the information still applies more so than ever. If you're looking for a basic stock picking system that works give it a read. ...more info