Description
When I started investing I had no idea what I was doing. I would read tips in newspapers or magazines and would then buy stocks based on those recommendations. In the early days that was the extent of my research and, in some ways, I felt that reading stock tips
was my research.
When I look back on that period there are two observations which really stand out. First, I should clearly have performed my own research. But I remember the second observation very clearly – from the moment I bought I had no idea where the stock price would go! For days after each investment I would be pre-occupied with the stock price, watching the screen closely, my heart quickening whenever the price began to fall. If the price did start to fall I had no idea when to cut my losses and sell, and when it rose I had no idea how far I should let my profits run.
You get the picture. For all intents and purposes I was continually floating in no-man’s-land, having literally no idea what to do or expect. I didn't like that feeling, the feeling of hopelessness. And then I read William J. O’Neil’s book “
How to Make Money in Stocks”.
When I read it, pieces of the puzzle started to slot together. O’Neil ‘s investment modelling system, which is based on an exhaustive study of the greatest stock market winners over the last 120 years, is a straight forward, 7-step process for minimising risk, maximising return, and finding stocks that are poised to perform. The process is referred to as “
CAN SLIM”...
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A
N
S
L
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M | Current Quarterly Earnings per Share: The Higher the Better
Annual Earnings Increases: Look for Significant Growth
New Products, New Management, New Highs: Buying at the Right Time
Supply and Demand: Shares Outstanding plus Big Volume Demand
Leader or Laggard: Which is Your Stock?
Institutional Sponsorship: Follow the Leaders
Market Direction: How to Determine It |
The book explains these steps in a clear, concise manner. From my perspective the most important element of this book is that it gives investors a system to work with. The majority of my early investment problems were the result of me having no idea what I was doing. This book gave my investment activities a structure with which to grow and develop my skills.
But there’s more....
The Double Whammy: Investors.com
Take a look at the website here >
Take everything you just learned in the book and implement it through Investors.com. This interactive website is designed to complement the CAN SLIM approach, giving you access to IBD’s comprehensive stock rating and research tools described in the book:
IBD Stock Checkup® | Instantly analyse a stock with this intuitive evaluation tool, based on Investor’s Business Daily’s sophisticated model of winning characteristics. Compare it to other stocks in its industry. |
Daily Stock Analysis | Highlights stocks poised to make big price gains and stocks showing sell signals. |
Stocks On The Move™ | Spotlights leading stocks trading on unusually high volume. |
IBD Charts | Full screen, colour, daily and weekly charts to help you identify patterns and trends. |
Personalized Stock Watch Lists | Keep tabs on your current portfolio and potential investments using IBD’s portfolio tool. |
Screen of the Day | Get new stock ideas through a list of noteworthy companies based on criteria selected by the investors.com editors. |
Timely Analysis | Receive "The Big Picture" and "The Real Most Active" the night before they come out in the IBD paper. This is the market analysis that alerts investors to changes in overall market trends. |
The Triple Whammy – Investor’s Business Daily Newspaper
In the early 1980s, O’Neil found that most newspapers did a poor job of helping investors zero in on the strongest stocks, making readers sift through pages of irrelevant information. He realised that there had to be better way. So in 1984, armed with a massive database of market data and a time-tested system for selecting stocks, he founded Investor’s Business Daily (originally named Investor’s Daily).
The purpose of the paper was simple: To help individual and professional investors make better decisions in less time. Since then, IBD has continued to provide investors with the key, relevant facts they need in order to make better business and investment decisions. The paper provides accurate market analysis and highlights shifts in market trends way ahead of other media.
I highly recommend the newspaper, which you can receive digitally each morning, direct to your computer or kindle (print copies are available but cost more and have greater environmental impact).
Click here to get 4 Bonus Weeks when you subscribe to Investor’s Business Daily Digital Edition!
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