Book How To Make Money In Stocks

8 reviews 1 follower

Edited January 28, 2012

Horrible book filled with useless garbage and nonsense. Basically, a get rich quick by using my subscribing to my website scam. Author's technical investing strategies are presented in a very non-rigorous and non-compelling manner. He uses examples but any idiot can cherry pick a few examples to prove a point. That does not make a convincing argument.

I could belabor my point with more examples but instead I recommend 2 much more insightful and informative books on investing: The Warren Buffet Way or The Little Book of Common Sense Investing.

September 16, 2011

William O'Neil's book made me want to give up fantasy sports and take up investing. It seems like the time I spend reviewing an athlete's past performance and projecting future ones could be better spent on researching stocks, something that could actually make me money and possibly provide a similar stimulation.

How to Make Money in Stocks teaches readers how to identify good companies that are about to become great and then how to determine if and when to buy their stock. The mnemonic CAN SLIM describes how he identifies fundamentally sound companies. C=Current earnings, A=annual earnings, N=new product, S=Supply and demand, L=leader or laggard of their sector, I=Institutional sponsorship, M=how the stock is priced relative to market indices. The mnemonic seemed like a gimmick targeted at suckers who paid to learn about stocks in a Holiday Inn ball room, but the content of the mnemonic seemed sound.

The portion of the book I found most interesting was learning how to interpret stock charts. O'Neil recommends buying stocks after they have formed a good base price. The base refers to the shape a stock's historical price has made in recent weeks. There are a few shapes he recommends and at first these shapes seemed about as arbitrary as picking a loose grouping of stars and calling it a constellation, but after further research it seems like there is some truth to this advice. I can definitely look at the chart of a stock that went up and identify the base pattern signalling its rise. The real question is whether I can identify a base pattern without the benefit of hind sight. If so, goodbye fantasy sports. If not, fantasy sports, I'll never stray again.

nonfiction

209 reviews 36 followers

Edited March 1, 2017

i swept through this book and got a detailed overview of it.

It is for long term investing - 6-18 months. The learning rate using canslim is very low, because you have to spend weeks, months before your forecast proves wrong or right!

Right now, this is not what i want, so i close this book, after reading most important parts: common mistakes and cup and handle pattern.

About 40% of this book is full of charts, and you will spend considerable amount of time reading them.

overall, the book advertises its own newsletter service, stating you should be independent but still listen to the guru.

As one reviewer on amazon stated:" you would have to put in lot of work & time to figure out if it works or not"

trading-classics

219 reviews 25 followers

October 20, 2008

I've read a few investment books, and this is the most comprehensive system I've found for determining when EXACTLY to enter and exit positions. The consistent, unemotional method that O'Neil provides has helped me immensely in thinking about and executing my investing strategies.

finance

investing

nonfiction

186 reviews 116 followers

Edited January 28, 2021

Originally published in 1988 and then republished in 2008. Entrepreneur, stockbroker and writer William J. O'Neil attempts to give tips to rookies about stocks.
Although better written than most stock literature, it's still just a big tease with the goal of self-advertisement that piggy-backs on empty promises, but may succeed just enough to keep you coming back for more (of his books or other genre books). It's just the "start" that is meant to get you interested in the market and possibly in the job.
Stock market trade remains something that only people with a lot of money can generate profit out of and regular folks like you and I should not dab into it at novice level by ourselves. If you've got money to invest and you're a beginner, go to a stock broker. If you want to be a stock broker, go to college. The financial and economics sector is vast and intricate and difficult to master and honestly if you're an entrepreneur busy running your business you do NOT have time to be continually informed on your own about the stock market changes. One book or 10 books on the "stock exchange" by some "gurus" is not going to do anything for you. The market is tough to predict, if at all possible, as many factors out of our control of foresight are at the base of it (unless you are a groomed expert, and even then who knows if you'd struggle or not).

2021

speed-read

36 reviews 1 follower

December 18, 2019

Overall a good introduction to O'Neil's trading system. The essence of this system is to combine value analysis together with supply demand analysis (using chart as a proxy). Then, after sufficient research, one should only hold a few winning stocks and keep an eye on the general market. This book shows a detailed system from micro perspective, but in reality, it could take a long time for the reader to actually excel at it I believe because there're so many ambiguity and edge-cases around so many rules. But I think there're few key ideas behind this system:

1. Treat trading like a business, so you'll want to cut the worst performing ones and hold the best ones
2. Pick stocks based on the growth of a company, such as earning growth, product growth etc
3. Understand that the key to win is to lose less than others, so you need to cut loss strictly at 8% (absolute loss), but allow the winner to grow at least 20%, which is 3:1 ratio.
4. And most importantly, respect and follow the market, do not fight against it.

I have to say O'Neil isn't a good writer. The book could be organized with better structure. Instead, O'Neil poured lots of random thoughts in each chapters which makes it not quite consistent. And he tried too hard to sell his IBD stuff. He could totally remove those IBD things from each chapter and have a new chapter to give hands-on instructions for those who are interested. I do like the Q&A section where he explained his thoughts about lots of common topics in investment, such as short selling, options writing etc.

-----------------

Some spoilers below:

The CANSLIM principles are:

C: Current quarterly earning growth should be high. You should only look at quarter to quarter increase to avoid seasonality. And the growth rate should be at least 20%. You could check consensus estimates to confirm your idea. But it's better to make sure the sales growth is at least 25% too. Similarly, if the earning growth slowed down significantly for two quarters, it's also a sign of weakness.

A: Annual earning should increase steadily for at least two years before the break out too. Also, pay attention to ROE and cashflow per share. The author believe everything in the market sells for about what it's worth at the time based on the law of supply and demand. So there's no such "cheap" stock to him.

N: New product, services or management from the company. Basically, there should be something new to drive the break out.

S: Supply and demand determines the price. It's a good sign for a small to mid size company to buy back stocks. And lower debt ratio is also good. One way to show the S&D is by checking the volume. If volume dry up when a stock pull back in price, it means there's no further selling pressure. And when price going up, you'll want to see volume up because it means some institutions start to buy too.

L: Leader is far better than lagger. Still, consistent with author's idea about chasing the best stocks, those lead their industries and are number one in their field. People buy lagger with sympathy but it never catch up. So learn to sell worst performer and keep the best a little longer.

I: Institutions are the key buyers of a growing stock. Buy only those stocks that have at least a few institutional sponsors with better-than-average recent performance and have added institutional owners in recent quarters.

M: Market direction is more important that all rules above. In bear market, stocks usually open strong and close weak. In bull market, stocks usually open weak and close strong. The general market averages need to be checked every day. The use of limit order is not recommended because you want to move fast.

And the most important two topics:
To detect a market top, keep a close eye on those composites and indices. On one of the days in uptrend, volume will increase but the price increase becomes smaller, which is "heavy volume without further price progress up". The average may close down for the day, making the distribution easy to see. After four or five days of definite distribution over any span of four or fives weeks, the market will almost always turn down. After the first day's rebound, the second day will open strongly but suddenly turn down near the end of the session.

To recognize the market bottom: A rally attempt begins when a major market average closes higher after a decline that happened either in the day or during previous session. Starting on the fourth day of the attempted rally, look for one of the major average to follow through with a booming gain on heavier volume than the day before. When a bear market bottoms, it frequently pulls back and settles above or near the lows made during the previous few weeks. Remember, no new bull market has ever started without a strong price and volume through confirmation.

72 reviews 14 followers

Edited July 21, 2014

I mostly read biographies and other non fiction. Even so this was a hard read for me because it was packed with theories and data or history to back it up. Maybe a few personal stories here and there(I read those faster). I had this book in my house for a while but didn't realize it was a classic until I read Michael Lewis's The Big Short, and found one of the people who saw the crash coming(and made 100+million off of it) had been using this method as a guide along with other sets of strategies, but this was one of them.

Knowing that helped a lot because halfway through I started to question if this book is just one big sales pitch. After reading an entire chapter dedicated to promoting their product I started to notice every other page has their product mentioned as being used to make a critical decisions.

I just finished, so I'm still not sure what I think of the book. Their method seems way too perfect. I couldn't find much information about their Company or William J. O'Niel. He has a net worth of $100 million but most of his Wikipedia is about his products. Also all the people in the testimonials who made money mentioned they made it in between 1996-2000. Anybody with a brain could have made money during that time.

A lot of the methods in the book contradicts everything everybody says (ex. Doing things the Warren Buffet Way and Buying a good company like Coca Cola to keep for 10 years...everybody I've met cites Buffet the way every business person I've met says 'like Steve Jobs' after every sentence) and that made it very attractive. I really want to believe what I read works, but I might have to buy a subscription to their database to do it in the best way possible. I'm skeptical for that reason.

I'm giving it 4 stars because it's a classic, William J. O'Neil includes a great story about how he made millions by betting everything he owned on margin multiple times, and besides the sales pitch it is a pretty good book. I'm not a big investor but I have heard money managers say a lot facts he mentioned as doctrine...which may or may not be a good thing.

385 reviews 31 followers

January 5, 2021

Хөрөнгө оруулалтын чиглэлийн түүхэн номнуудыг нэгийг сонгон авч уншлаа. Хувьцаанд хэрхэн хөрөнгө оруулах талаар зөвлөсөн зөвлөгөө нь одоог хэр нь үнэ цэнэтэй хэвээр санагдлаа. Номыг шинэчилэн найруулах бүрдээ тухайн цаг үеийн өөрчлөлтүүдийг нэмж тусгасан нь уг номыг илүү үнэ цэнэтэй болгосон байна.

audiobook

books-in-eng

investment

345 reviews 3,013 followers

August 22, 2018

William O ́Neil was born in 1933 and in 1963 he founded the company that bears his name. His company developed the first computerized daily securities database and he is still very active promoting his services of which this book probably is his bestselling tool. Based upon his research studying the track record of past investor legends and what the best performing stocks have in common, he developed his investment strategy, called CAN SLIM. This focuses on buying stocks that are performing relatively strongly as well as having a fundamental momentum. The first version of the book was published in 1988, and since then I have had the pleasure of reading the following four editions of this book. They don't differ much from the original but have updated comments.
O ́Neil's key message is to focus on momentum, and change. Instead of fearing or having disbelief in stocks that trade on 25-50 times earnings and making new highs, he advocates them using his CAN SLIM system. I think every value investor should read this book. It would prevent them from buying apparently cheap value traps in bad industries etc.

The book is divided in 3 parts. In the first part it's all about his winning system, CAN SLIM. The second part is called, "be smart from the start" and the third part is called "investing like a professional". It's written in a very easy language, but to me it's a bit too much of a commercial. The negatives with this book are that's sometimes I get the feeling that the book is written with the sole purpose of promoting O'Neill's newspaper and brokerage business. Another negative is that very rarely are there any issues or problems with his strategy. But overall the positive clearly outweighs the negatives.

The CAN SLIM method is an easy to understand framework to give you necessary focus on the dynamics of the stock, and its fundamentals. It focuses you on Current and Annual earnings growth as well as what is driving that, what is the New; products, management etc. After the fundamentals, it also looks at the chart, and some technical factors, Supply and demand for the stocks, if a stock is a Leader/Laggard in the market, in its industry, does it have Institutional sponsorship and finally in what direction is the overall Market heading. Compared to other authors that advocate a more dynamic approach to stocks like Jesse Livermore, Edvin Lefewre, or pure technical ones like Martin Pring, this actually brings the fundamentals to the forefront, trying to learn from previous success stories in the stock market, and to see to what extent these new ideas qualify as a potential ten-bagger.

In the early 90's I found myself too often buying stocks that had fallen out of favor and were looking cheap, only to learn they could get cheaper and also that there could be good reason for the cheapness. Bad fundamentals often turned into even worse fundamentals, and maybe even structural issues. After reading this book I got a more focused on what drives stocks, positive news (for big moves). I think all value investors, like me, should read this book to focus to a larger extent on growth and opportunities. Or at the very least avoid cheap stocks in dying industries, were often a "new technology growth" company are changing the dynamics of the industry. Think for example about Amazon vs companies selling electronics/books etc.

As a final note, O ́Neil's favourite book is Gerald Loeb's, The Battle for Investment Survival. This is another book to recommend if you need a more dynamic approach to your investing.

Edited November 13, 2008

Overall I think that the author has some good information that he is strying to get across, but unfortunately I felt that his writing and education style was poor. For a subject that I generally find very interesting, it was a dry book that I was definitely ready to put down once I reached the end. This is more of a reflection of his presentation of the information rather than is message.

investing-trading

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