William O'Neil: How to Make Money in Stocks and 24 Essential Lessons
Trader's Library #65 · Investing and the stock market. A growth-stock method with an emphasis on volume, trend and cutting losses.
Author: William J. O'Neil · Original: How to Make Money in Stocks; 24 Essential Lessons for Investment Success · Year: 1988 · Usefulness for traders: ★★★★☆
What it's about
The founder of Investor's Business Daily describes the CAN SLIM method: buying companies with rising earnings that break out of bases on heavy volume while the whole market is in an uptrend. The second book is a shorter overview in the form of 24 lessons.
What it gives a trader
O'Neil is closer to a trader than to a value investor: what counts is momentum, volume and the direction of the broad market. He's famous for insisting on cutting losses quickly, without exceptions and without hoping for a rebound.
Lessons for traders
- most stocks follow the direction of the broad market
- volume on a breakout confirms the interest of big players
- a loss you don't cut quickly grows (loss aversion, Atlas of biases #34)
What to watch out for
The method is for stocks, not intraday futures. Some tools require the author's paid services.
Discussion
The discussion takes place in Hetman Capital Club (in Polish). Join the discussion in the Club →
Navigation
← #064 The Intelligent Investor (Benjamin Graham) · Library index · #066 The Most Important Thing (Howard Marks) →
Educational content, not investment advice. The book description is my own summary and assessment, not quotations. Edition details were checked in catalogues and bookshops, and where there was doubt I said so plainly.