Essential Lessons for Investment Success William J. O’Neil McGraw-Hill Books

01. Cut your losses early. Be persistent.
02. Getting Started: There’s no time like the present!
03. Follow a system rather than your emotions
04. Do Fundamental analysis or technical analysis?
05. First among fundamentals: is study on Earnings and Sales
06. Look Relative Price Strength: a key technical tool
07. Know a stock by the company it keeps Look at Leader sectors
08. The importance of volume and sponsorship Look at Institutional investor
09. Buy at just the right moment The idea is not to “buy low, sell high” but “buy high and sell higher”.
10. How chart patterns lead to big profits .look for “cup with the handle” patterns, “double bottom” patterns, and “flat base”.
11. Read stock charts like a pro.Most successful stocks build a number of bases as they make their way up in price
12. Gauge health.Have a set of selling rules that tell you when to sell and nail down a profit, or cut short a loss to avoid a possible larger loss.
13. Spot when the market hits a top. three out of four stocks, will eventually follow the trend of the general market
14. Spot when the market bottoms.At some point on the way down, the indices will attempt to rebound or rally.
15. Putting the stock-picking puzzle together by asking all the relevant questions
16. Find new investment ideas -Scan “The Markets” summary for the prior day’s closing prices and The Accumulation/Distribution Rating
17. Growth vs. Value Investing ie consistent earnings and sales growth, or buy stocks with a low P/E ratio
18. Don’t try to be a Jack-of-all-trades Keep it simple.Options are risky
19. What’s the right mix for your portfolio? Concentrate your eggs in fewer baskets, know them well and watch them carefully.
20. Cut your losses short and do it early. We repeat the old 8% rule. If a stock falls 8% below your purchase price, sell it.

The Big Idea
Take investment lessons from the expert. O’Neil started out with $500 just out of college, and by age 30 had purchased a seat on the New York Stock Exchange and opened his own investment management research firm. In 1963, he was the first to create a computerized database for stock market research that is used today by 400 major US institutions. With decades of investing experience, the author shares the lessons he has learned in a simple question-and-answer format, for those who may be first-time investors getting their feet wet, and to improve the performance of those who may have been playing the market for some time. Learn common-sense strategies, know when to buy and sell at the right time, and successfully manage your own portfolio. Your journey to financial security and freedom begins here.

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