William J. ONeil - How to Make Money in Stocks and Become a Successful Investor

Other Books by
William J. ONeil

How to Make Money in Stocks:
A Winning System in Good Times or Bad

Business Leaders & Success:
55 Top Leaders & How They Achieved Greatness

24 Essential Lessons for Investment Success:
Learn the Most Important Investment Techniques
from the Founder of Investors Business Daily

William J. ONeil is one of Wall Streets most seasoned and successful veterans. At age 30, he bought his own seat on the Big Board with profits made in the stock market and founded William ONeil + Co., Inc., a leading institutional investment research organization based in Los Angeles. The firms current clients are over 600 of the top institutional investment firms in the world. Mr. ONeil is also the founder of Investors Business Daily and its companion website, Investors.com.

Copyright 2012 by William J. ONeil. All rights reserved. Manufactured in the United States of America. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher.

ISBN: 978-0-07-179693-4
MHID: 0-07-179693-2

How to Make Money in Stocks, Fourth Edition

PRINT BOOK

ISBN: 978-0-07-161413-9
MHID: 0-07-161413-3

E-BOOK

ISBN: 978-0-07-161414-6
MHID: 0-07-161414-1

The Successful Investor

PRINT BOOK

ISBN: 978-0-07-142959-7
MHID: 0-07-142959-X

E-BOOK

ISBN: 978-0-07-150543-7
MHID: 0-07-150543-1

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This text contains the following, which are trademarks, service marks, or registered trademarks of Investors Business Daily, Inc., William ONeil + Co. Incorporated, or their affiliated entities in the United States and/or other countries: Investors Business Daily, IBD, CAN SLIM, SmartSelect, ACC/DIS RTG, SMR, SMR Rating, Stock Checkup, Stocks on the Move, New Stock Market Ideas,Daily Graphs, Daily Graphs Online, ONeil Database, and The William ONeil + Co. 197 Industry Groups.

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Part I:
A Winning System: CAN SLIM

Part II:
Be Smart from the Start

Part III:
Investing Like a Professional

After the market debacles of 2000 and 2008, investors now realize they must take charge and learn much more about what theyre doing when they save and invest their hard-earned money. However, many investors dont know where to turn, whom to trust, or what they must stop doing in order to achieve true superior investment performance.

You dont have to give your money to a Bernie Madoff, wholl take it but wont tell you exactly what hes doing with it. Instead, you need to read a few of the best investment books, attend some investment classes, or participate in an investment meet-up group so you can learn how to invest with real knowledge and confidence. At the very least, you need to learn and understand well the sound principles, proven rules and methods that can protect and build your investment portfolio over time. Half of all Americans save and invest; now its time to learn to do it intelligently with critical know-how.

When I started investing, I made most of the same mistakes youve probably made. But heres what Ive learned:

You buy stocks when theyre on the way up in price, not on the way down. And when you buy more, you do it only after the stock has risen from your purchase price, not after it has fallen below it.

You buy stocks when theyre nearer to their highs for the year, not when theyve sunk lower and look cheap. You buy higher-priced, better quality stocks rather than the lowest-priced stocks.

You learn to always sell stocks quickly when you have a small 7 or 8% loss rather than waiting and hoping theyll come back. Many dont.

You pay far less attention to a companys book value, dividends, or PE ratiowhich for the last 100 years have had little predictive value in spotting Americas most successful companiesand focus instead on vital historically proven factors such as strong earnings and sales growth, price and volume action, and whether the company is the number one profit leader in its field with a superior new product.

You dont subscribe to a bunch of market newsletters or advisory services, and you dont let yourself be influenced by recommendations from analysts, or friends who, after all, are just expressing personal opinions that can frequently be wrong and prove costly.

You also must acquaint yourself with daily, weekly, and monthly price and volume chartsan invaluable tool the best professionals wouldnt do without but amateurs tend to dismiss as irrelevant.

Lastly, you must use time-tested sell rules to tell you when to sell a stock and take your worthwhile gains. Plus youll need buy and sell rules for when it's best to enter the general market or sell and lower your percent invested. Ninety percent of investors have neither of these essential elements.

All these wise actions are totally contrary to human nature! In reality, the stock market is human nature and crowd psychology on daily display, plus the age-old law of supply and demand at work. Because these two factors remain the same over time, it is remarkable but true that chart patterns are just the same today as they were 50 years ago or 100 years ago. Few investors know or understand this. It can be your priceless advantage.