How to Make Money in Stocks: A Winning System in Good Times and Bad, Fourth Edition

How to Make Money in Stocks: A Winning System in Good Times and Bad, Fourth Edition

Posted by jack_miller | Published a year ago

With 760 ratings

By: William J. O'Neil

Purchased At: $22.00


Anyone can learn to invest wisely with this bestselling investment system!

Through every type of market, William J. O’Neil’s national bestseller, How to Make Money in Stocks, has shown over 2 million investors the secrets to building wealth. O’Neil’s powerful CAN SLIM® Investing System—a proven 7-step process for minimizing risk and maximizing gains—has influenced generations of investors.

Based on a major study of market winners from 1880 to 2009, this expanded edition gives you:

  • Proven techniques for finding winning stocks before they make big price gains
  • Tips on picking the best stocks, mutual funds, and ETFs to maximize your gains
  • 100 new charts to help you spot today’s most profitable trends

PLUS strategies to help you avoid the 21 most common investor mistakes!

“I dedicated the 2004 Stock Trader’s Almanac to Bill O’Neil: ‘His foresight, innovation, and disciplined approach to stock market investing will influence investors and traders for generations to come.’”
—Yale Hirsch, publisher and editor, Stock Trader’s Almanac and author of Let’s Change the World Inc.

Investor’s Business Daily has provided a quarter-century of great financial journalism and investing strategies.”
—David Callaway, editor-in-chief, MarketWatch

How to Make Money in Stocks is a classic. Any investor serious about making money in the market ought to read it.”
—Larry Kudlow, host, CNBC’s "The Kudlow Report"

Don't get me wrong but this is one of the worst books I have ever read.

Let me explain why...
This book is about growth investing and growth investing only. The reason I thought the book is horrible is because the author go against some of the already proven techiniches and consensus already stabilished not only in Wall Street but for great legends like Benjamin Graham, Warren Buffett, John J. Murphy, Bulkowski, Nison and others.

For instance, he desregards the use of P/E or Discounted Cash Flow as a good metrics, giving exemples about the high P/E ratios found on Microsoft and other Tech Growth stocks and how the investor would have missed those stocks.
But he does not tell the story about the dot com bubble and how this same over valued P/E stocks went from a fortune to nothing, capitalizing on earning growth that even did not existed, more like a future promisse.

He gives other example about Bank of America with low P/E in 2008. For God Sakes a global financial crises and meltdown of stock market should not be a parameter for nothing and pro investor or not, who earned money in that year?

Other point the author dismiss based on his research is about Technical Analysis and some Patterns, saying almost all patterns have a low rate of success. The only pattern that he considers good is cup and handle because he was the first person to spot it and write about it, I guess...

On the final chapters the author have some chapters with titles like When to sell or how to time markets and stuff like that, but he does not give clear clues and techniques and pictures of how to do it and how to do it, he just talk in a shallow way.

He dislikes the idea of buying good and stabilished companys like Coca-Cola and Gillete just because the are too big to generate good profits or because he judges their management team old fellow with no interest to innovate or step out of the box. Also deslikes the idea of buy and hold good companies like Warren Buffett does.

In resume, is almost like he is saying "Go Big or Go Home!" and instigating the new investor to take risks with this unproven enterprises...

Like I said, this is a good for those interested in buy and look for growth stocks and maybe in this matter it can be a useful book, but to dismiss all the common sense and already proven techniques ranging from value investing and technical analysis for me would be madness

- mackenzie_foster

There are different methods of trading/investing in the stock market. There's value investing (like Warren Buffet), there's day trading, swing trading, and then there's growth investing. This book is about growth investing. That is, investing in companies that show exceptional earnings and sales growth (which are the things that affect a stock's price during a bull market cycle). It's not better or worse than the others. But thanks to Bill O'Neill and his Investor's Business Daily service, it is easier to learn.

This is because IBD (the newspaper/service accompanying this strategy) does half the work for you. The book will tell you to look for companies with a certain amount of earnings growth by quarter, for example, and that sounds like a lot of work--and normally, it would be. But if you pay the $10 per month, or whatever it is, for the paper, all of that stuff is done for you. The data is available for any stock in the market, and you're given a list of the top 50 stocks that meet the criteria listed in the book.

But as I said, that's only half the work. Knowing which stocks to buy is easy (thanks to this strategy), but knowing when to buy them and when to sell them is the hard part. The book goes into detail on that. It involves looking for certain patterns in the price charts (also available through their service), and then buying if the price goes above a certain level. Then there are also rules on when to sell.

It's a rules-based system, which is good because it gives you a set of criteria by which to buy and sell stocks, but there is room for flexibility (depending on your abilities as a technical analyst and/or your knowledge of a particular company) which is going to make or break you as a stock trader.

I should finish this review, though, by saying that most traders lose money in stocks. Unless you're so obsessed with stocks that you're willing to put in thousands of hours (just like any highly competitive skill) before you are successful, I'd recommend just buying a mutual fund instead. It's a lot less hassle, and unless you become an elite trader, your returns will likely be comparable over a long enough period of time.

If there is any negative that I have to say about this book, it's that it says nothing about what I believe is the most difficult part about trading. The psychological aspect. I would reference Mark Douglas for that.

- wynter_thompson

This is the first review I have ever written on Amazon; this book is that incredible. The book lays out exactly what most successful stocks have done to be successful and when to buy that stock before it shoots up. The basic premise of the book is to buy companies that have demonstrated certain chart patterns (the patterns explained in the book) and have solid fundamentals.

So far, in only 3 months of investing with his strategy, I have made 15% returns on my investments. Before I read this, I had to wait at least a year or two before making that kind of money. However, he does solicit his website throughout the book. At first, I was skeptical of someone trying to sell financial advice (everyone seems to solicit you for market advice nowadays), but I decided to give his website a try. Ends up, they give you a month trial for free, and it costs $30 per month after the trial. With the amount of money I have made from this book, the $30 a month is a drop in the bucket of my profits.

To provide concrete examples, his website told me to look for Winnebago (WGO) in August-September 2017, YY Inc.'s (YY) incredible 25% shoot up after their amazing quarter in November 2017, and Square's (SQ) ungodly skyrocket in November 2017. Those are but some of the success stories I would never have found had I simply read he book and tried to do the analysis that the website provides for you. I strongly recommend reading the book and paying the monthly membership for the website. I have not regretted it at all.

- eliana_mendoza

The book is highly informative with plain and simple common sense investing which is fully backed up with long term research.

However, it gets 1 star from me because while the investment content is very good and I fully understand patriotism, the America this, America that and constant pot shots at other countries does not belong in an investment book and because of that the book gets 1 star from me...

- madeleine_ortiz

William O'Neil shares his strategy for making money out of the stock market by finding growth shares. It opens with a hundred pages of charts in which he demonstrates various patterns that can be used to predict price movements. This is all rather technical and may be off-putting to people who don't have much experience of investing. After this the book become more readable, and although William O'Neil is opinionated, to say the least, he argues his case persuasively. His underlying message is 'if you want to do it my way, do it exactly as I do it or don't do it at all'. Fair enough. He's earned his reputation and his CAN SLIM principles are widely used. The book has a self-promotional aspect and an American flavour that may upset some British readers, but with sales of two million it has become a classic in its field. Probably not for beginners, but the chapter on 'Twenty-one costly common mistakes investors make' is lucid and forceful, and aimed at all investors regardless of their level of experience. Strongly recommended.

- baylor_evans

Very good book written by experienced trader that knows what he is talking about. CANSLIM stands for 7 fundamental criteria that helps you pick fastgrowing stocks. He then go on to explain certain technical formations that should trigger your buy. There is also chapter on spotting a market top. O’Neil, together with Jesse Livermore, Darvas, and Martin Zweig are part of a school of trading that strategically invest in growth stocks with momentum. I gave the book only 4 stars because of the many graphs at the start of the book that completely put me off. It took me awhile before reading it. The candles on the graphs do not have open and closes so it is hard to see the formations and strategies talked about in the book.

- lainey_martinez

I am a full time swing/day trader for over 10 months now. Read a lot of books on investing/trading over the course of the year. Thought I'd buy this one as smb recommended it to me on the StockTwits. Found some interesting information esp in the first few chapters, but overall disliked it and there were few reasons for that.
- Looks to me like the author is using it purely for promoting his Investor's Business Daily and, which might be understandable, but thats not what the title of the book states. I had to skip chapter 16 for that reason.
- also, all those nearly 100 pages of charts at the start of the book are very hard to read. I also believe they will not have any sense for a newbie investor/trader. It took me 6 months of a full time daily trading to learn to recognize those chart patterns. So, I am not sure how the author expects a new investor/trader to learn them from just looking through those pages in the book? I feel that those pages are totally irrelevant in this book.
-to add up, as I have mentioned earlier on this is not the first book I read on investing. But it ended up to be the first book where I found that the author expressing his strong political views and opinions throughout the whole book. He constantly mentions the USSR as the aggressor and adds up heavily on the US politics in chapter 17 expressing his political views throughout it. I have no problem to talk politics. We all have our opinions and sometimes they are very strong. But in this case I think the author crossed the line and definitely chose a wrong platform to express his political views. And I am saying that because I read a few books on investing already written by famous Peter Lynch, W. Baffett and T. Bulkowski. So, I can compare.
Needless to say, I have to be more careful now on choosing what I am buying next. Apart from a several good tips, this one for me turned out to be a complete disappointment.

- lochlan_flores

Bit heavy going for me, but that is down to me not the book

- lily_allen

I am currently reading this book and it gives brillant new tips for a new investor. How to spot trends in stocks thats will breakout. It gives you tips on when to take your losses and how to spot good winners. It shows charts with trends in the stock market and the investor gives you some personal tips as well. It can open your eyes.

- tristian_adams

Quite dated but a fairly good introduction to the basic concepts. Got me off to a decent start

- anastasia_morgan

Probably the best book ever written on good stock selection.

Full of sound advice and logic.

A must read for any serious investor, trader.

- khloe_torres

Still going through this. Think I should have got a primer as you are immersed immediately in charts and I found it difficult at times to spot patterns. However, am persisting and learning as I go. Well written, with some great examples of missed opportunities and advice on spotting trigger events.

- jovanni_gray

Great book for a start.

- aubrielle_walker

I have read half of this and finding it useful. Take note: this is an American book so if you want something specifically for UK trading then try another one. Quite easy to read, but not an "idiots guide" lets say.

- renata_stewart

Good Book. Easy to read.

- alexis_myers

Only read this once but need to go through again and fully understand the concepts even though based on US stocks.
Sure you can apply the charting techniques to UK stocks. Need to be disciplined with stop losses which I am not!!!

- kolten_howard

Excellent way of combining Fundamental analysis with Technical analysis.
Very useful in Indian markets which are more growth oriented.

One complaint about the book - they could have used better paper, looks like printed on home inkjet printer.

- hayley_lopez

Amazing book, but it does really focus on chart reading in stock selection, rather than a general knowledge on a variety of methods to make money in stocks but i can't stress how useful and well written it is.

- malia_anderson

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