William O’Neil is a successful stock trader and the founder of Investor’s Business Daily. He is also the writer of several books on stock trading, including How to Make Money in Stocks and 24 Essential Lessons for Investment Success.
William O’Neil was born in 1933. In 1958 he started work as a stockbroker at Hayden, Stone & Company, where he developed an investment strategy that made use of early computers.
In 1960 he attended Harvard’s Program for Management Development and developed his now-famous CANSLIM strategy for picking stocks.
He bought a seat on the NYSE at the age of 30. At the time he was the youngest person to ever do so.
In 1963 he founded brokerage firm William O’Neil & Co. Inc and in 1964 he founded the business newspaper Investor’s Business Daily.
Here are 26 of his most famous quotes:
1. When everybody is running around saying how great a stock is, everybody who can buy probably already has, and the only direction for the stock to go at that point is down. When it’s obvious and exciting to everyone, it’s too late.
2. Personal opinions, feelings, hopes, and beliefs about the stock market are usually wrong and often dangerous. Facts and markets, on the other hand, are seldom wrong.
3. A great trader once noted there are only two emotions in the market: hope and fear. “The only problem,” he added, “is we hope when we should fear, and we fear when we should hope.”
4. The moral of the story is: never argue with the market. Your health and peace of mind are always more important than any stock.
5. It is one of the great paradoxes of the stock market that what seems too high usually goes higher and what seems too low usually goes lower.
6. The market has a simple way of whittling all excessive pride and overblown egos down to size.
7. The fastest way to take a bath in the stock market or go broke is to try to prove that you are right and the market is wrong.
8. 90% of the people in the stock market, professionals and amateurs alike, simply haven’t done enough homework.
9. Over-diversification is a hedge for ignorance.
10. Purpose is a more powerful motivator than money. When you are not paid as much as you would like, your purpose will provide you a reason to continue producing excellence in your work. When you have more money than you ever thought possible, your purpose will provide you with a reason to continue producing excellence in your work.
11. Investors cash in small, easy-to-take profits and hold their losers. This tactic is exactly the opposite of correct investment procedure. Investors will sell a stock with profit before they will sell one with a loss.
12. The number one market leader is not the largest company or the one with the most recognised brand name; it’s the one with the best quarterly and annual earnings growth, return on equity, profit margins, sales growth, and price action.
13. Buying stocks on the way down is dangerous. You can get wiped out. So, stop this risky habit. Anyone who buys stocks on the way down in price because they look cheap will learn the hard way this is how you can lose a lot of money.
14. When you make a mistake in the stock market, the only sound thing to so is to correct it. Don’t fight it. Pride and ego never pay off.
15. Plot out your mistakes on charts, study them, and write some additional rules in order to correct your mistakes and the actions that cost you money.
16. Remember, keep it simple. Investing is hard enough. Stick to the basic rules of CANSLIM and don’t complicate it by getting super-tricky.
17. Over time, you’ll learn that only one or two out of every 10 stocks you buy will be truly outstanding and capable of doubling or tripling or more in value.
18. Buying a stock without knowing when or why you should sell it is like buying a car with no brakes, or being in a boat with no life preservers, or taking flying lessons that teach you how to take off but not how to land.
19. There is no reason any investor should ever in any bull market buy or sit with a poor-performing stock with a Relative Strength Rating of 10, 20, 30, 40, or 50. The market is bluntly telling you that that investment is a relatively poor or mediocre choice.
20. When you appear to be right always follow up.
21. The first thing I learned about how to get superior performance is not to buy stocks and that are near their lows, but to buy stocks that are coming out of broad bases and beginning to make new highs.
22. The whole secret to winning big in the stock market is not to be right all the time, but to lose the least amount possible when you’re wrong.
24. The common mistake in investing is failing to understand the importance of buying high quality companies
25. The majority of unskilled investors stubbornly hold onto their losses when the losses are small and reasonable. they could get out cheaply, but being emotionally involved and human, the keep waiting and hoping until their loss gets much bigger and costs them dearly.
26. If you own a portfolio of stocks, you must learn to sell the worst performers first and keep the best a little longer.
This article is part of our series on inspirational traders. If you want to read more, have a look at our pieces on Jim Simons, Ray Dalio and Matt Wage.
