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

8.3. THE FIRST COMMANDMENT

The First Commandment among the many rules and principles applicable to life in general and stock market investing in specific that we heard many times from Bill was "Never get carried away with yourself." The basic idea is that one should remain impervious to the illusions and trappings of wealth, as they often lead one to become "carried away" to the point where excess of one sort or another ultimately leads to one's demise. This is critical.

Despite avoiding failure and demise as a result of his experience in understanding the root causes of such common investor afflictions, there have been many who take a certain smug sense of satisfaction in trying to predict Bill O'Neil's demise, albeit with little luck. The comments of the portfolio manager cited at the beginning of this chapter who predicted that the brutal 2000–2002 bear market would end when and only when Investor's Business Daily had gone out of business, turned out to be quite wishful in their ignorance and inaccuracy, but are in fact not too uncommon. When you are successful you can often become the target of another negative human emotion: envy.

One example of this type of envy occurred when we had heard a rumor that O'Neil had taken a "hit" in semiconductor "hot stock" Cymer, Inc. (CYMI). Supposedly the big break in the stock (Figure 8.2) had caused big losses for O'Neil and this was seen as potentially deleterious. If any of this was true, you would have known it by talking to Bill, who ...