Cambridge Business Association
The Successful Investor
Book

The Successful Investor

What 80 Million People Need to Know to Invest Profitably and Avoid Big Losses

William J. O'Neil
McGraw-Hill, 2003
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Editorial Rating

9

Qualities

  • Innovative
  • Applicable

Recommendation

William J. O’Neil, founder of Investor’s Business Daily (which he cites constantly in his book), provides an excellent how-to tour of his CAN SLIM investing approach. The method makes eminently good sense if you do what it says, when it says. Most investors risk failure, not because their systems are flawed, but because people are. O’Neil makes it clear: to be an investor, you must put forth enormous dedication, discipline, emotional fortitude and humility, and you need a sound strategy, such as CAN SLIM. The author may make investing look a tad too easy, though the charting he recommends is obviously going to take some time to accomplish and understand. But he pulls no other punches. His advice is knowledgeable and straightforward. He tells you what to do, and how to move ahead wisely and profitably. getAbstract.com thinks investors should read and study this honest, worthwhile book that summarizes the essentials of one of the latter twentieth century’s most popular investing systems.

Summary

Rules for Investing Success

The market bubble of the 1990’s was one of the most extravagant misadventures in financial history, worse than the Roaring Twenties, parallel only to the Tulip Mania of seventeenth century Holland. Yet, it was in many respects comparable to any bubble or financial folly. People get carried away by their emotions and become attached to their opinions, so they buy at the top and count nothing but losses all the way to the floor, finally selling after the bottom falls out from beneath them. To succeed at investing:

  • Buy stocks when they’re going up - Don’t wait until a stock has lost some value and looks like a bargain. When a stock is rising, sell it at 20% to 25% over your purchase price. Recognize the peak and leave before the stock crests and falls.
  • Buy stocks at close to their annual high, not close to their annual low.
  • Sell when you have a small loss instead of waiting for a big loss. With a stock that is already going down, contain risk by selling decisively: cut your losses at 7% to 8%.
  • Ignore conventional wisdom about price-earning ratios, dividends and book value.
  • Forget about subscribing to market...

About the Author

William J. O’Neil is founder and chairman of Investors Business Daily and a best-selling author of investment books including How to Make Money in Stocks.

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