How To Make Money In Stocks

Positive Review of Book

O'Neil's book, How To Make Money In Stocks, is now an established classic, influencing millions of readers and other investment writers. I live in the UK and I know that Bernice Cohen and Jim Slater were deeply influenced by O'Neil's philosophy. Both are very accomplished investors themselves. William O'Neil doesn't tell you anything new about growth investing. He tells them in a way that makes sense. Accelerating EPS, something new, leadership, market direction, institutional support...these are well-known growth investment criteria. So people who are slagging off O'Neil here don't really know much about investing. And yes, you have to spend a lot of time/money on charts, on price movements, and on researching companies. I spend a fortune on Company REFS every year. Why not? Has someone told you that getting rich was easy? If you are not ready to give investing a great deal of your time, money and passion, you can forget about it.

I have followed his methods and yes, I have made good money from them. That too living here in the UK, where you cannot get all the information we need on O'Neil's criteria (and no, I haven't subscribed to IBD, there is no use of IBD for UK markets). So you have to be imaginative. I don't have access to IBD's proprietary relative strength measure, so I use Company REFS's measure instead, and analyse charts of a stock (against FTSE-100 and sector index) very closely using Share Scope. UK companies don't have quarterly reports, so I use half-yearly reports instead. I don't have access to IBD's SMR rating (sales + margin + relative strength).

So I take a very close look at each of these measures on Company REFS and ADVFN. If you are driven enough, you can find a solution to every problem. My only complaint is that O'Neil doesn't empasise the importance of cash flow and balance sheet enough. He does mention the requirements of 1) low debt and 2) cash flow per share higher than EPS, but only fleetingly. But that's really nitpicking. Everybody has (at least should have, anyway) their own investment strategy. So you need to decide which bit you want to stress on. Great book A must read for every investor.

Negative Review of Book

The price is right but the book is hard to understand and read. I agree with a previous reader that the charts are way out-dated. O'Neil needs to better explain some of his theories regarding the stock market. As an investor who likes to read investing books, "big disappointment" would best describe this book. If you're looking for a book to describe how and why the stock market is today, then don't get this book. At best, the book describes the stock market in its existence in the early 90's at the latest.

Author Biography

William J. O'Neil is the bestselling author of 24 Essential Lessons for Investment Success and the founder and chairman of Investor's Business Daily, one of the world's leading financial newspapers. He is internationally regarded as a foremost source of investment research and advice.

Table of Contents

1. Part 1 Cost Volume Profit Analysis and Decision-Making
• Chapter 1 - Introduction
• Chapter 2 - Profit Planning
• Chapter 3 - Cost Analysis
• Chapter 4 - Activity Based Costing and Management
• Chapter 5 - Short Term Decisions and Accounting Information
2. Part 2 Budgeting
• Chapter 6 - Operational and Financial Budgeting
• Chapter 7 - Capital Budgeting Decisions - Part I
• Chapter 8 - Capital Budgeting Decision - Part II
3. Part 3 Control and Performance Evaluation
• Chapter 9 -Responsibility Accounting
• Chapter 10 - Divisional Performance Measurement
• Chapter 11 - Control and Evaluation of Cost Centers
4. Part 4 Product Costing
• Chapter 12 - Introduction to Product Costing
• Chapter 13 - Standard Costing, Variable Costing, and Throughput Costing
• Chapter 14 - Process Costing and the Cost Accounting Cycle Back-Matter Appendix
• Guidelines for Preparing Memoranda Appendix
• Time Value of Money Company Index.

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