1 The Story
The man who industrialized stock research
William J. O'Neil (1933–2023) was a stockbroker, researcher, and publisher who turned the study of winning stocks into a system. He started as a broker at Hayden, Stone & Co. in 1958 and bought a seat on the New York Stock Exchange at age 30 — the youngest to do so at the time.1
He founded William O'Neil & Co. in 1963, built the first computerized daily securities database, launched Daily Graphs in 1972, and in 1984 founded the newspaper Investor's Business Daily. By studying the biggest winning stocks of the past, he reverse-engineered their common traits into the CAN SLIM method.1
2 The Big Idea
Buy the best, not the cheapest
The biggest winners are already strong — leaders, in leading groups, with great earnings.
O'Neil's research showed that the future's biggest gainers were not cheap, beaten-down stocks but market leaders with high relative strength and accelerating earnings, breaking out of sound bases.2
3 The Method & Setups
CAN SLIM
The seven traits
Current earnings, Annual earnings, New (product/high), Supply & demand, Leader, Institutional sponsorship, Market direction — the shared DNA of past super-winners.2
Relative strength ≥ 80
He bought only the leaders — stocks outperforming at least 80% of the market — because “leaders become bigger leaders.”2
Bases & the cup-with-handle
He bought breakouts from sound chart bases (he popularized the cup-with-handle) on a surge of volume.2
Cut losses at 7–8%
His signature risk rule: sell any stock that falls 7–8% below your buy price, no exceptions.2
4 Try It Today
Test the idea for yourself
A no-risk exercise
Pick the strongest sector this month, then list its two or three leaders by relative strength. Look for one forming a cup-with-handle base. Watch (on paper) how it behaves at the breakout — and how differently the laggards in the same group act.
5 In Their Words
William O'Neil, quoted
"What seems too high and risky to the majority generally goes higher, and what seems low and cheap generally goes lower."— How to Make Money in Stocks2
6 The Books & Their Big Ideas
What he wrote
How to Make Money in Stocks
William O'Neil · 19887 Watch & Read
Go deeper
- CONCEPTRelative Strength — the rating he popularized.
- CONCEPTStock Selection & Scanning.
- TRADERHis heir in method: Mark Minervini.
§ Sources
- William O'Neil — Wikipedia (biography, career, dates) — en.wikipedia.org
- CAN SLIM & the relative-strength rating — Wikipedia; O'Neil, How to Make Money in Stocks (McGraw-Hill, 1988)