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

8.2. SURVIVING BY KEEPING EGO IN CHECK

With over 50 years of experience, O'Neil is, by sheer definition, a senior survivor of the professional investment business, and in the process he has seen many other professional investors and investment firms come and go. Most of the failures he has witnessed in the investment industry were caused by excessive ego and the dangerous psychological effect that sudden wealth can have on people who have a tendency to simply get carried away with money and themselves. Money is certainly capable of becoming the root of all evil, as it can lead an individual down unsustainable paths of self-indulgence. Because of this, the taste of significant and material success in the markets, as we discussed in Chapter 3, can absolutely be fatal.

With more than 50 years in the business, O'Neil has more than a few stories to tell regarding the lessons of investment excess and folly. We recall several of these stories, such as the one about a broker he knew at Hayden Stone, a smart kid out of Yale who had bought a lot of big-growth stocks in the 1960s like Brunswick and American Photocopy and had made a lot of money, but when they started coming down, he began to proclaim his infallible approach as a newly declared "long-term investor." To put it simply, he rode all these hot stocks all the way up, and he rode them all the way down, and in the process put himself out of business. Another fellow Bill knew as a broker was a guy who borrowed $150,000 (a lot of money ...