Thread by @TraderLion_

Trading Legends: William O’Neil (Thread) ⬇️

William O’Neil is a legendary investor who after careful study of the greatest winning stocks going back to the 1800s, developed his style of combining fundamental and technical analysis to identify and capitalize on the growth stories of True Market Leaders.

This strategy #CANSLIM, allowed him to compound his account dramatically and ride the powerful trends of Market Leaders such as:

Chrysler 1962
Syntex 1963
Pic-N-Save 1976
Price Co 1982
Genetech 1986
AOL 1998
Amgen 1990
Sun Microsystems 1998
Qualcomm 1998

O’Neil was also dedicated to educating the individual investor and founded Investor’s Business Daily.

He also authored the foundational trading book How To Make Money in Stocks in 1988 and was featured in Market Wizards by Jack Schwager in 1989.

Read "How To Make Money in Stocks"

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O’Neil’s story began when he was born in Oklahoma in 1933 and developed his strong work ethic while helping support his family during the Great Depression by delivering newspapers.

In 1955, O’Neil graduated with a Business Degree from Southern Methodist University and joined the Air Force. Around this time he purchased his first shares of stock, investing in Procter and Gamble.

He then started his career as a stockbroker at Hayden, Stone & Co in 1958. It was at this point that he began researching what actually worked in the stock market.

During his research he stumbled upon the results of a small fund managing 15 Million dollars that was outperforming nearly everyone else.

That fund was managed by Jack Dreyfus and after studying the fund’s quarterly reports and average prices, O’Neil realized that Dreyfus’ purchases were usually right when a stock was breaking out to new all-time highs after a basing period.

Spurred on by this discovery, O’Neil spent the next two years studying the methods of the greatest investors, traders, and speculators such as Bernard Baruch, Jesse Livermore, Nicolas Darvas, and Gerald Loeb.

The new rules he formulated allowed him to escape the worst of the 1960s bear market and capitalize on trades in Chrysler and Syntex when the market followed through after the Cuban missile crisis.

During this period, O’Neil was able to turn $5,000 into $200,000 and purchase a seat on the NYSE. O’Neil would leave Hayden, Stone & Co and found William O’Neil & Co. a proprietary stock research firm.

At WON & Co. he consulted with institutions and continued his research of the winning characteristics of the greatest performing stocks.

From this research which covered 50 years of Market Leaders, he distilled 7 characteristics that the greatest stocks shared before and during their impressive growth periods.

The 7 Characteristics that form the Acronym #CANSLIM.

Current Quarterly Earnings Growth
Annual Earnings Growth
New Products/Services/Management/Price Highs
Supply and Demand
Leader Versus Laggard
Institutional Sponsorship
Market Direction

More on this in our Introduction to CANSLIM Thread:

https://twitter.com/TraderLion_/status/1401302355954618368

and CANSLIM Series on YouTube youtube.com/playlist?list=…

In 1984, O’Neil Founded Investor’s Business Daily to provide a resource and educational tool to the individual investor. The newspaper provided charts and fundamental data in the strongest growth stocks of the day.

O’Neil is also incredibly principled. Along with stock trading education, IBD published their 10 Secrets of Success column. These principles not only apply to trading the market but also to any vocation.

Since its founding, IBD has worked to provide both fundamental and technical analysis on notable growth stocks as well as provide market analysis and sentiment reports through articles and the IBD Big Picture.

O’Neil also taught seminars around the country influencing many current Market Wizards including Mark Minervini @markminervini and David Ryan @dryan310

5 Key Takeaways from O’Neil

1️⃣ Focus on leading stocks in leading groups.
2️⃣ Manage Risk & Limit Losses
3️⃣The market will always beat egos & personal opinions
4️⃣ 75% of stocks follow the market
5️⃣ Market Leaders combine the best Fundamentals & Price Action

O’Neil’s focus on the strongest fundamental growth stories with accelerating earnings/sales and his use of charting to buy at proper pivot points and manage risk is what ultimately made him a fortune.

However, his openness and commitment to educating new investors about the CANSLIM growth investing framework may be his greatest contribution.

Below are 20 of our favorite WON quotes for new investors:
traderlion.com/quotes/william…

For more information on CANSLIM and O’Neil check out his book How To Make Money in Stocks and his chapter in John Boik’s @monsterstocks1 excellent book “Lessons From The Greatest Stock Traders of All Time”

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Also check out Amy Smith's @IBD_ASmith How to Make Money in Stocks Success Stories: New and Advanced Investors Share Their Winning Secrets

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As well as The Top 10 Lessons I Learned While Working With William O’Neil by @RossHaber_

traderlion.com/quick-reads/wi…

Finally we had to end the thread with another book from WON! This one breaks down his 40 years of experience studying the markets into a handful of easy-to-digest lessons.

24 Essential Lessons for Investment Success - William O’Neil

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Want the Free Model Books to print & study? 📚

✅ 3 Years (2018-2020)
✅ 30+ Charts highlighting Winning Characteristics
✅ Fundamental & Technical Analysis

Train your eyes to spot the next True Market Leaders 👇🏼

traderlion.com/model-book-pri…