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Blink 3 of 8 - The 5 AM Club
by Robin Sharma
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How to Make Money in Stocks summary
William J. O'Neil
A Winning System in Good Times and Bad
21 mins
Brief summary
How to Make Money in Stocks by William J. O'Neil is a practical guide to investing in stocks based on the author's experience. It offers insights into identifying and investing in quality companies with potential for long-term growth and success.
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How to Make Money in Stocks
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Key idea 1 of 7
You should learn stock chart patterns, and one pattern especially.
If you study the history of the stock market, you’ll notice that many things remain the same. Regardless of the era, there are great winners and great losers: stocks that have climbed over a short period of time, those that have crashed, and those that have just plodded along unprofitably.
This means that you can learn from the behavior of past stocks and apply it to the present. Whether it’s the dramatic movements in the Northern Pacific Railway at the beginning of the twentieth century or Apple in the twenty-first, you can learn from history.
And the best way to do that is to read stock charts.
The key message here is: You should learn stock chart patterns, and one pattern especially.
In almost every field, we assess current conditions to plan our next move. Think of the X-rays, MRIs, and brain scans doctors use to treat illnesses before they progress. Or consider how seismic data is used by geologists to study earthquakes or to help companies find hidden oil reserves.
By learning to see patterns that have replicated themselves time and time again, we can decide how to act in the present. The same is true for investing. We can use all of the stock-market data from the last hundred years to find patterns. That way, we know when to jump in, or out, of a stock. Many investors fail to do this, and unless they’re spectacularly lucky, they lose money.
So, what should you be looking for in stock charts? Quite simply, price patterns.
There are many price patterns, but one of the most important to remember looks like a cup with a handle. In fact, that’s its name: Cup with Handle. So, after rising for a period of time, a stock will often fall. As it falls, it sometimes makes a rounded, downward curve, which then becomes a steady, flat line. This is the base of the “cup.”
This base is very important. Because, without a strong base of investors who believe in the stock, it could just collapse. But with this solid foundation, the stock will rise properly when its fortunes change. As it climbs upward, it will form the other side of the cup. Just then, it dips back again, and it will form the “handle.” It’s precisely at that point that you should buy in. More times than not, the stock will shoot upward.
Whether the stock is Apple in the 2000s or Sea Containers in the 1970s, this trusty stock-market pattern has resulted in great rewards for investors over the decades.
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What is How to Make Money in Stocks about?
How to Make Money in Stocks (1988, new edition 2008) is a guide to building wealth in the stock market, with proven tips for finding winning stocks and avoiding losers. By learning from the past, How to Make Money in Stocks shows us how to spot telltale patterns in unpredictable markets and profit from them.
How to Make Money in Stocks Review
How to Make Money in Stocks (1988) is an essential guide for anyone interested in building wealth through stock market investing. Here's why this book is worth reading:
- It provides practical strategies for identifying winning stocks and maximizing returns, helping readers navigate the complexities of the market.
- With its data-driven approach and emphasis on thorough research, it equips investors with the tools they need to make informed decisions.
- The book's engaging examples and real-life success stories make it an enjoyable and motivating read, ensuring that readers stay captivated throughout.
Who should read How to Make Money in Stocks?
- Rookies looking to invest for the first time
- Experienced traders in search of new tips
- Anyone interested in the mysterious workings of the market
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How to Make Money in Stocks FAQs
What is the main message of How to Make Money in Stocks?
The main message of How to Make Money in Stocks is to learn a systematic approach to investing for long-term success.
How long does it take to read How to Make Money in Stocks?
The reading time for How to Make Money in Stocks varies. However, the Blinkist summary can be read in a matter of minutes.
Is How to Make Money in Stocks a good book? Is it worth reading?
How to Make Money in Stocks is worth reading as it provides valuable insights and strategies for successful stock market investing.
Who is the author of How to Make Money in Stocks?
William J. O'Neil is the author of How to Make Money in Stocks.
What to read after How to Make Money in Stocks?
If you're wondering what to read next after How to Make Money in Stocks, here are some recommendations we suggest:
- Trade Like a Stock Market Wizard by Mark Minervini
- The Little Book of Common Sense Investing by John C. Bogle
- Outsmarting the Crowd by Bogumil K. Baranowski
- Make Money Trading Options by Michael Sincere
- Common Stocks and Uncommon Profits and Other Writings by Philip A. Fischer
- The Barefoot Investor by Scott Pape
- Thinking, Fast and Slow by Daniel Kahneman
- Reminiscences of a Stock Operator by Edwin Lefèvre
- Power Hour by Adrienne Herbert
- 13 Things Mentally Strong Couples Don't Do by Amy Morin
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