How to Make Money in Stocks: A Winning System in Good Times and Bad, Fourth Edition,   ISBN:9780071614139

Customer Rating: 

I have just received the book last week. I have read quickly and roughly thro' some chapters of the book. My first impression is that the rules are highly probably good for making optimal profits from stocks. But it is easier said than done. I need to read this book again and again in order to fully understand the concepts. The graphs are difficuly to interpret. The author seems never use candlestick, RSI, stochastics, flags or triangles . Well, all those technical analysis tools are not scientific (it is not Law of Physics) and could be fooled and tricked by those large hedge funds. O'Neil is more practical. From his book he doesn't even use those "open, high, low, close" bar charts. He only uses "high, low, close" chart. Very simple ! The first chapter in this book is very practical . Most of the graphs have stock price at the right and EPS at the left axis !!! This is very usefull and I can see how the stocks' prices go with the EPS in a given period of time frame. I have never seen graphs like this !!! It would be even better if the graphs are magnified many times and become more detailed. But then I probably need to subscribe to Investor's Business Daily in order to see the details. I would like to see some more details in the graphs , such as some breaking news in some certain dates in the graphs. But then the graphs in the book are too small and not much space left.

Unfortunately I don't live in USA and I don't have any experience on those US stocks. Of course I know those great brand names such as Google, Yahoo, IBM, Cisco (you name it) etc. but I don't know how to make fat profits from these great stocks (only in their best time frames of high speed growth) . I only trade stocks in Hong Kong and most of them are stocks of mainland China enterprises. Now I consider trading US stocks. I think about subscribing IBD .

Unfortunately in Hong Kong I don't know how to get the RS (relative strengh) rating for those Hong Kong stocks and we don't have something similar to IBD.

But then it seems at this moment there is not yet any great monster stocks in USA. I am not sure. The fundamentals change a lot after the Lehman Brother crises in 2008. The people in USA now have a higher saving rate. And the unemployment is high. I have to choose stocks very carefully.

I like this book much much more than those pure technical analysis books. Those pure TA books are not too useful for me. For example, some TA books have statistics of certain pattern's successful rate etc. Some TA or stock chart books also discuss the "Cup and Handle" pattern and talks about percentage successfull rate. It has absolutely no mention of the fundamentals of those stocks with the "Cup and Handle" pattern. So these books are too obsessed with the meaningless statistics. They are useless !!!

And O'Neil's book is far better than those whole bunch of Warren Buffett's books. I am tired of those Warren Buffet's books that keep talking about the good old days of some historical stocks such as Coca Cola, Geico, etc. Well this is old history. Don't dwell in those antique stocks. Let's move on to some new stocks.

O'Neil's book is different. He even teaches you how to make fat profits of those final stage high speed run with unbelievably high PE.

Customer Rating: 

Along with O'Neil's excellent THE SUCCESSFUL INVESTOR, this book is one of the best introductions to growth stock investing available. He proposes a method (CANSLIM) to discouver what are the best candidates for investment and measure overall market health. BOTH are required for his method to work. The fact that it encourages the use of Investor's Business Daily (IBD) is not a drawback to my mind because market and industry trends change so frequently that you need a daily source of information to keep up with possible CANSLIM candidates. That being said, readers should realize that this method requires that you familiarize yourself with charts and that you be willing to take responsibility for your choices. Not everyone is willing to spend 30-60 minutes a day reading IBD. Many too, prefer to rely on brokers or a guru to make choices because it gives them somebody to blame when there are losses. IBD is useless for such investors.

A few caveats: O'Neil encourages you to search for "leaders" with excellent fundamentals that are breaking out of sound bases. Then you must buy in within 5% of their breakout "pivot points" IF their volume is well above average on that day. To help you find these leaders, IBD lists 100 stocks every weekend that satisfy CANSLIM criteria. Unfortunately, 10-15% of the IBD 100 are replaced every week. So that in hindsight it is easy to point out how this or that stock did well "because" it was a leader, but there are many many more examples of CANSLIM candidates with excellent bases and fundamentals that suddenly drop large percentages after proper breakouts simply because market psychology has shifted. It follows in hindsight that they were never true leaders. Meanwhile, there are plenty of companies with excellent charts, but questionable fundamentals, that do as well or better than his CANSLIM leaders. This can be very frustrating.

Finally, for Canadian investors looking for CANSLIM candidates in the TSE, it is well to remember that our heavy reliance on resource stocks means that their fundamentals are often terrible just before they perform best. Resource stocks rise most dramatically when the market perceives that the commodities underlying these stocks are poised to rise in value after a period in the dumps. CANSLIM is therefore a poor guide in this area.

To sum up, CANSLIM works best with young companies offering new products, often in tech industries. That way, their sales, earnings and margins show the steady rise that gives them a high fundamental score in the CANSLIM universe. At the end of the day, however, the market is a maelstrom of fear and hope where fleeting perceptions of future potential far outweigh past fundamentals. CANSLIM can help you narrow your list of choices, but it can also give you a false sense of security until the day where your "leader" suddenly loses favor. To his credit, O'Neil often concedes this, but then forgets it just as fast when explaining the charts of past winners. Leadership is a tricky business.

Customer Rating: 

Not only have I saved much of my retirement savings applying the principles of this book, but added money also. I like the way Mr. O'Neil in plain language displays and explains past market results through the years, plus his proven techniques in the Stock Market. Many others out in the market still don't admit their mistakes and worse yet, don't learn from them!! This book is a must if you want to succeed in making money in stocks.
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Customer Rating: 

The book has an adequate explanation of strategy for success with stocks. The hard part in Kindle format is viewing the graphs that are touted as the basis for the strategy. Even in landscape mode the text is small on these figures. Worse is the grey color which is ill defined and difficult to see. Even with reading glasses on my 47 year old eyes I found it laborous to use the visual aids. This is the kind of book that I would imagine flipping back and forth between text and graphs. In trying to do this the Kindle would hang up for more than just seconds and occasionally require a reboot. I recommend the book but not in Kindle format.

Customer Rating: 

Great analyitical and historical perspective on the stock market. A well written and sensible strategy for investing.