“How to make money in stocks” by William O’Neil
“How to make money in Stocks, a winning system in good times or bad” by William O’Neil is one of the most interesting books available on stock investing. O’Neil himself continues to be a main figure in the investing world through his “Investor’s Business Daily” publication and the investors.com website. The popularity of this book is evident in the second overall rating under stock investing on Amazon.com. The first title is “Reminiscences of a Stock Operator” by Edwin Lefèvre (we have featured quotes from this classic in an earlier note).
There are a many reasons for studying this book. In fact, even if one does not agree with the methodology and ideas in the book, reading it is a must. This is because Mr. O’Neil has a significant following particularly among US investors. Many of the rules that he has in his book are followed almost religiously by some. This is to the extent that the behavior of the group is evident in the stock price movements. This is very noticeable for US listed shares in particular.
A major observation regarding this methodology is that participants will choose to exit the markets during downturns. There tends to be a substantial gap between what a growth or a momentum investor is willing to pay for a growing company versus a more bottom up value investor. Knowing that a segment of investors are out of the market will for sure influences the dynamics of investing in growth companies.
In addition to studying the book, one may elect to also subscribe to the website service. The Monday issue of the “Investor Business Daily” contains information about industry rankings and a discussion regarding the market. In Canada, Chapters stores and some others do carry this important newspaper. So it is quite positive that the information is easily accessible.
In this note, we highlight the importance of “How to make money in Stocks” by William O’Neil. The fact is that there is a body of knowledge outside the academic world. Serious investors have to focus on studying the various methodologies while carving their own approach to investing.
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