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How to Make Money in Stocks cover

How to Make Money in Stocks

A Winning System in Good Times and Bad
by William J. O'Neil

First published in 1988 by the founder of Investor's Business Daily — the CAN SLIM system, built from a historical study of the biggest stock market winners going back decades, looking for the specific traits they shared before their major price moves.

Start Reading — Chapter 1 →
Why this book

Where this Book Club's value-investing courses (Intelligent Investor, Security Analysis, Margin of Safety) look for businesses trading below a conservative estimate of value, O'Neil's approach is different in kind: a historical, evidence-based study of what the biggest stock market winners actually looked like — fundamentally and technically — in the period just before their major moves, distilled into a seven-part checklist.

This course covers CAN SLIM in four parts, following O'Neil's own structure: the earnings-growth criteria that start the checklist, the qualitative and supply-and-demand factors that separate genuine leaders from pretenders, the institutional-sponsorship and overall-market-direction filters O'Neil considers just as important as any individual stock's own merits, and the strict, mechanical risk-management rule that O'Neil credits as much as any stock-picking criterion for his own results.

Table of Contents
The CAN SLIM Framework
1
Introducing CAN SLIM: O'Neil's Seven-Point Checklist
2 min
The origin of the system — a historical study of the market's biggest winners, and the seven-letter acronym O'Neil built from what they had in common.
2
C = Current Quarterly Earnings, A = Annual Earnings Growth
2 min
O'Neil's specific, numeric earnings-growth thresholds — and why he insists on both recent acceleration and a multi-year track record together.
Finding Winning Stocks
3
N = New Products, New Management, New Highs
2 min
The 'N' in CAN SLIM — something genuinely new driving the story, and O'Neil's counterintuitive comfort with buying stocks at new price highs.
4
S = Supply and Demand: Why Float and Volume Matter
2 min
The mechanical, market-structure side of CAN SLIM — how a company's share count and trading volume affect how far a price move can run.
5
L = Leader or Laggard: Only Buy the Best in Class
2 min
O'Neil's insistence on buying the strongest company in a given industry group, even at a higher price, rather than a cheaper competitor.
Market Timing and Institutional Sponsorship
6
I = Institutional Sponsorship: Following the Smart Money
2 min
Why O'Neil treats visible accumulation by mutual funds and other large institutions as a real, checkable buy signal.
7
M = Market Direction: Why Even Great Stocks Fail in Bad Markets
2 min
O'Neil's own claim that this is the single most important CAN SLIM criterion — most stocks, including great ones, move with the overall market.
8
Reading Chart Patterns: O'Neil's Cup-with-Handle and Other Bases
2 min
O'Neil's specific technical contribution — named, repeatable chart patterns that historically preceded many of the market's biggest winners.
Risk Management and Selling
9
The 7-8% Sell Rule: O'Neil's Non-Negotiable Loss Limit
2 min
The single risk-management rule O'Neil credits as much as any stock-picking criterion — cut every loss at 7-8%, no exceptions.
10
Building and Managing a Watch List: Turning CAN SLIM Into a Repeatable Process
2 min
Closing the course with O'Neil's practical system for turning the seven criteria into an ongoing, repeatable screening and monitoring process.