Customer Reviews

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

5 star:		(123)
4 star:		(44)
3 star:		(25)
2 star:		(17)
1 star:		(17)

 

 

I read this book about 10 years ago and generally gained a greater appreciation for buying healthy stocks. Make no mistake - this is a momentum strategy. But O'Neil has created a very specific formula and process for his style of momentum investing. I also learned a lot about technical analysis and some of the other elements that affect stock movements (sentiment, market psychology, etc.). And O'Neil spends a good deal of time telling you how to sell a stock, whether at a profit or a loss. I think this is perhaps the hardest part of investing, but after reading this book, you should have no excuse for letting a huge gain slip away or digging a huge hole for yourself. Above all, the book provides dozens of examples to support many of the techniques advocated in the book. One gripe I have is that when it comes to finding certain patterns in charts (head and shoulders, cup with handle, etc.), beauty can be in the eye of the investor - I wasn't always comfortable with what qualified as an acceptable pattern, and, of course, these "iffy" charts all demonstrate money-making stocks AFTER the fact. I also believe that there are other investment approaches that can yield good results, especially in a trending market like we have found ourselves in more recently. But on the whole, this book provides a wealth of information in a concise, well-supported manner. It definitely belongs in your investment library. A bonus is that the newspaper O'Neil founded, Investor's Business Daily, can provide an ongoing educational follow up to the book, so the approach you learn in the book will never become outdated. I read it regularly.

I have read about a dozen books on how to invest in stocks. And I'm here to tell you, this is undoubtedly the best. The man has been there done it. Whatever mistakes you've made in buying and selling stocks, he's done it. And in this book, he is passing along his wisdom so that you can learn from his past mistakes and get on the road success. If you haven't been beating the market averages and making a lot of money in the last few years, then it's because you are not following William O'Neil's CANSLIM method. CANSLIM is an acronym that defines his trading principles. These principles are the active ingredients that make a stock rise. Take it from me, give up on your hit and miss approach to investing. Begin today on his sound and proven methods of investing and you'll soon be glad you did. Do you know anybody who have lost or is down more than 50% of their trading capital on a stock? I do. Many of my co-workers have ridden stocks down to over a 70% lost. Now they are stuck in a stock or stocks they can't afford to sell. And worst of all, they are stuck when the market averages are soaring to heights. (That's gotta hurt. I know. I've been there). O'Neil methods won't let this happen to you.

To be honest, I was a slow learner too. So,let me take you back a little bit. I first picked up this book in '92, read it, got excited but then went back to doing it my way. I picked it up again in '94, read it and made a note in the book that a company stock called DELL fit the profile of his CANSLIM methods, set the book down, forgot about it and went back to doing things my way. (Didn't buy DELL in '94) Finally, early last year of '98, I again picked up the book and read it. This time I saw a little note that I had written in the book in '94 about DELL and thought to myself 'why was I so stubborn' about 'doing it my way' that I missed out on so much valuable time and money. Since then, I've bought the stock and a few others that have catapuled my portfolio balance to over 200%. Now that feels real good.

Like me for the first time, you'll probably understand most of what he says in the book but you may not relate to what he says entirely until you've been practing or 'getting your feet wet' in the stock market for a little while. Since buying and selling stocks is not a perfect science but rather an art, you will need to go back and reread the book many times over while you're in the market before you'll truly 'get it'.

My only critism about his CANSLIM method is that he steers you towards buying stocks with a low number of floating shares which indicate small to mid cap stocks because he says these stocks have the greatest upside potential. I disagree because hitech stocks like Dell, Microsoft, AOL, and Cisco that have gone global can still grow very rapidly if not faster than some of the small guys.

Other than that, armed with this book and his Investors Business Daily, you'll be able to achieve the returns that you've always wanted.

This is a great book from a man who obviously knows investing from experience (he has been successful). The book describes investing in Value stocks (moderate to high price stocks in steady companies) using technical analysis.

Patterns of successful stocks in history are reviewed and a system for choosing winning stocks is explain using detailed company information and charts. If you don't like math or don't want to spend time weekly reviewing your investments, this book is probably not for you.

Ture novice investors (like myself) BEWARE. Mr O'Neil does not describe many of the basic concepts he discusses in his book. I found myself becoming frustrated in several chapters as he discussed terms like "price consolidation", "overhead supply","upside buypoint", "pivot point", etc. After reading the book, I went and bought a more basic book (The Neatest Little Guide...5 Stars) to help me as a true novice.

In summary, I am glad I purchased the book. I now understand the investing viewpoint from a Value/Technical investor as well as the patterns of past winning stocks.

How to Make Money in Stocks? If you can make it through this book, you're half way there. Not written for beginners, Bill's book tells you in detail- what, when, and how to select a winner. This would be a great beginner's book if used in conjunction with Barron's Financial Hand Book or Dictionary of Financial Terms- just to fill in some basics..

The selection method detailed in this book is called CANSLIM. The information, and CANSLIM method, is based on years of research and number crunching with main frame computers some years ago. O'Neil and his associates profiled 100s of already successful companies to determine what characteristics made a company's stock rise BEFORE it was a winner. His findings, and the CANSLIM selection method, are explained in great detail.

William O'Neil is also the CEO and Editor of the Investors Business Daily. His CANSLIM method of stock selection can best be executed using his IBD Newspaper. Surprise! Bound inside, there is a coupon for 10 free issues.

"How To Make Money In Stocks" is not the easiest book to understand for the beginner. It's information though will help narrow down 1000s of stocks to just one or two. I use it as a reference book and refer to it often. Take some notes on the inside cover- your going to need them.

An excellent buy, this book is destined to be a classic. As William himself says of one of his chapters: "one of the most valuable chapters in this book.... should be worth several hundred times what you paid for [it]. I agree.

Bill O'Neil is one of Wall Street's most famous investors, mostly because he founded Investor's Business Daily. In this book he outlines his trading system, called "CANSLIM," and details how he has used it for years to capture enormous moves in the stock market from stocks that are about to take off and become the next big thing. To give you an idea of the kind of stocks O'Neil prides himself on finding, his past hits include Microsoft, Home Depot, and Amazon.

O'Neil's strategy is based on both technical and fundamental analysis, though the technical aspect receives much more space in the book. In fact technical analysis (meaning the reading of charts, volume, oscillators, etc) is so essential in O'Neil's investing that he recommends not buying a stock with a bad chart, regardless of how good the fundamentals may be. The first section of the book details the points of fundamental analysis (again, he uses the acronym CANSLIM)-earnings growth, industry leadership, and market direction among others. The next section deals with technicals and charting, and the last section offers some general advice and a look at successful investors of the past.

The methodology here is sound. When you buy stocks with the solid fundamentals O'Neil demands (which are not easy to come by) you get stocks with enormous growth potential. These are often the industry's next super-stocks, and he tries to get in them right before they take off. Because of this you can safely buy a stock with a high P/E multiple (which many fundamentalists recommend against) or one that just broke its 52 week high, and you can do this because the underlying fundamentals of the company are so incredibly strong as to ensure further momentum. Reading the chart ensures that the stock has a good base and won't have a nasty drop-off-a-cliff selloff at the first sign of a temporary sputter. O'Neil limits his losses to about 7% regardless of how good the stock is, and the idea is that your 7% losers will be more than made up for by your 25% (though sometimes many times more than that) winners.

As much as I like O'Neil's theory I was a little disappointed with the book. First, very little time is spent on the fundamental aspects of the stock. Because so much is devoted to charting, I wonder if many people would disregard the fundamentals altogether out of laziness, and instead go straight for the charts. Charting is great, but amateur chartists have a tendency to see whatever pattern they've convinced themselves will be there. I'm also put off by the constant self-touting, though I suppose I understand it. In reality this book is intended to steer people into the IBD way of investing, and get them to subscribe to the paper and/or website. The seemingly endless stream of testimonials (of almost infomercial proportion) at the end are kind of annoying as well. O'Neil's methodology is very sound and obviously proven-why he should have to cheapen it by such blatant marketing is puzzling to me. Keep in mind, also, that his system (as he himself points out) was designed for bull markets. In fact he recommends that you either stay completely out of bear markets or limit your exposure to them. The subtitle "A Winning System in Good Times or Bad" is therefore probably a bit misleading. Overall, however, this is a worthwhile book, and it is really the place to go to learn about the IBD methodology.

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.

I bought this book last year and subscribed to IBD after reading the book. The author gives some good pointers on identifying companies with superior growth numbers using his CANSLIM method. However the book is very vague on chart reading which by the way is what the whole book is about. For example, the author uses the term "pivot point" without ever defining it.

His newspaper is heavily advertized throughout the book. It feels like it is the other half of completely mastering the art of investing - the first half being reading this book. IBD does have a nice system of categorizing stocks according to metrics such as EPS and comparing them to all other stocks in the market. This database seems pretty useful in finding out just how good a company's performance is compared to all other companies.

But what is surprising is whenever IBD analyzes current charts for a stock in its columns, they always seem to be making "sharp diagnoses" after the event! For example, after a stock has fallen they will run a column and tell us why that stock fell and what sell characterstics its chart exhibited. Never have I seen them suggest sells/buys before the stock actually tanked/rose. If they are so sure about their chart reading skills, why can't they make those predictions before the stock does something drastic? I would want to see them take real time examples. Perhaps build a portfolio in real time - shouldn't be hard for people professing to teach others how to invest. That way they could actually teach IBD readers how to correctly apply their methods. I have not seen them do anything like that in the eight months I subscribed to IBD.

The IBD 100 index is also heavily advertized on the IBD website. AFAIK there is no fund that actually follows the index. The set of companies that forms the index changes every week. If one were to run a fund that mimics the IBD 100, the overhead of selling/buying stocks according to the index would be pretty high I would imagine. Also since most of the companies in the index are small caps, the very act of selling/buying whenever companies appear or disappear from the index would drive down or drive up the prices of those stocks diminishing returns. So the returns one would get if one were to run a fund following the IBD 100 index would be less than the returns of the virtual index that IBD touts so much.

In total O'Neil sounds like a quack and I am not convinced that I can consistently make money by reading his newspaper or following his often unclear advise. It is possible that in a bull market like the one that existed in the late 90s one could end up getting a list of all the hottest stocks in the market from IBD. If you "invest" in them and they go up, you are a genius! Thanks to IBD.

I would recommend not spending any money on this book. You should perhaps borrow the book from a library and read it.

If you are a beginner or a novice, this book can introduce to the market and give you one view on how to make money trading. This was the first book I read to learn about stock trading. It has important lessons that can come cheaply if you just listen to them out of the book (Buy rules, sell rules, etc...). I would have saved thousands had I just followed the simple rule of selling at an 8% cut off point. It has taken me over 5 years along with thousands of dollars in unnecessary losses to round out my education, but this book should be helpful for anyone who wants to learn short to intermediate term trading.

If you combine O'Neil's theories with your own ideas and throw in some technical analysis and hard work, you can be well on your way to riches. For charting, check out tc2000.com, great software.

I saw one review ripping on technical analysis and the guy said he was a professional. Technical analysis should be used for buying and selling in my opinion; otherwise you are just letting chance and instinct determine when you buy and sell. This book will give you a brief idea of charting and technical analysis but if you want a more detailed description check out Technical Analysis of Stock Trends by Edwards and Magee.

I have been trading for 8 yrs and have been very profitable. I was first introduced to William J. O'Neil by a book called Market Wizards. He definitely deserved to be interviewed. I don't trade his exact system because I am an individual and had to design my own system but it does closly mirror canslim in a few ways. I read Trade Your Way to Financial Freedom and understand how to incorporate position sizing and was able to produce tremendous profits by changing differnt parts of my system and tweaking a few things. This is worth your time.

Bill O'Niel has put together a excellent book for any investor regardless of experience, but particularly for the neophyte and absolutely for anyone who reads his equally excellent paper-IBD! I also highly recommend McMillion on Options, Bear Market Baloney and Wall Street Money Machine.