Trade Like an O'Neil Disciple: How We Made 18,000% in the Stock Market

1.1. PREPARATION, STUDY, AND PRACTICE

Don't dabble in stocks. Dig in and do some detective work.

—William O'Neil, How to Make Money in Stocks, 2nd ed. (New York: McGraw-Hill, 1995), 34

This the essential premise of O'Neil methodologies: They are in no way, shape, or form intended as a panacea for making money in the market. Human beings are complex organisms, and so represent the greatest variable in the implementation of any investment methodology, whether of "O'Neilian" origin or otherwise. This is why O'Neil insists that one must put in the time, effort, and work required if one intends to become a successful stock market investor: "Human nature being what it is, 90 percent of the people in the stock market, professionals and amateurs alike, simply haven't done enough homework."

O'Neil laments the fact that so many investors are looking for some magic formula that enables them to produce an optimal result in the stock market with little or no effort. In The Successful Investor, he laments the "rise of the individual investor" during the dot-com bubble market of 1999. "Most people, both investors and advisors, got hurt in the 2000 to 2002 downturn because they never took the time to learn sound investment rules and principles. In the 90s they thought they'd found a way to make money without doing much homework. They just bought tips, touts, and stories" (William J. O'Neil, The Successful Investor [New York: McGraw-Hill, 2004], xii).

While most investors do not hesitate to ...