"HOW TO MAKE MONEY IN STOCKS" (WILLIAM O'NEIL).   Term Paper ID:26604 Click to get this paper

Essay Subject: Reviews work aimed at helping small investor buy wisely, understand stock reports & know when to sell.... More...

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Paper Abstract: Reviews work aimed at helping small investor buy wisely, understand stock reports & know when to sell. Paper Introduction: For most people, the stock market is a mysterious financial institution that still has a profound effect on their lives. among the puzzling aspects of the stock market are why good economic times produce jitters on the market while bad economic news often means improved buying on the market. The huge drops that have taken place twice in the past decade may also puzzle many people and in any case create concern on the part of the public about what may be happening to the economy. William J. O'Neil has written a book that examines the stock market from a more practical point of view in order to offer advice to the average citizen about how to invest, how to understand stock reports, and how to tell when to sell. The intent of the book is to help the small investor make money, and to this end the author has created a simple system and ways for the individual to Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. Once the individual hasgathered all the necessary information and is in a position to make a gooddecision, he or she needs to decide how to purchase the stock, meaningwhether or not to use a broker, how to find a broker, and similar actionsto create an individual system for buying and selling stocks withoutspending too much money in the process. How to Make Money in Stocks. He says that it is risky not to worry about stocksbecause dividends are being paid, but he also counsels not to worry toomuch and to retain confidence. He cites Bernard Baruch to the effectthat selling when a stock is rising is best because it is an assured profitand because waiting might produce a loss. New York: McGraw-Hill, 1995.----------------------- 6 The letters in C-A-N-S-L-I-M stand for the sevenkey factors the author finds in winning stocks, and he says his system isnot theoretical but is rather based on how the stock market actually works. He asks specific questions about different types of stocks and abouthow the investor should decide when to buy and when to sell. The huge drops that have taken place twice in the pastdecade may also puzzle many people and in any case create concern on thepart of the public about what may be happening to the economy. What the author emphasizes quiterightly is that the investor has to learn to weather changes in the marketand to develop an investment system which produces gains over the long runwithout allowing the inevitable losses to mount up too much. He likens this kind of investing to gardening,and stocks that are not performing well are like weeds that have to beremoved for the good of the rest of the garden. An important chapter considers what sort of mix the investor shouldhave in his or her portfolio, meaning whether or not they should diversify,invest for the long haul, buy on margin, sell short, or otherwise create amix of different kinds of stocks and different strategies in order toprotect the overall investment or develop a more winning strategy.Interestingly, the author does not recommend diversifying based on the viewthat when you do, you have more stocks about which you know less. In the last part of the book, the author suggests different stocksand shows how to analyze their performance over time. William J.O'Neil has written a book that examines the stock market from a morepractical point of view in order to offer advice to the average citizenabout how to invest, how to understand stock reports, and how to tell whento sell. The author says that you cannot win in the stockmarket without a plan to protect yourself from large losses. His intent here, hesays, is to make the reader capable, of investing like a professional.another important lesson involved is how to read the daily stock marketreports in the newspaper both to ascertain what stocks to buy and sell andhow to avoid panicking at some of the news reports that seem intended togenerate fear. If you own too many stocks, it will be moredifficult to take care of them. What the author doesdo is lay out the system in a clear fashion, beginning with an explanation,chapter by chapter, of the seven letters in C-A-N-S-L-I-M. Showing profits is the point,and seeing when a stock is rising makes it certain that a profit will betaken. Indeed, observing the stock market over the short term wouldseem to raise questions as to whether the market and the health of thelarger economy are linked in a one-to-one relationship at all. The precise procedures involved in buying a stock aredetailed, and the kind of documentation that will be created by thepurchase is also discussed and described. Marketanalysts are often looking not for the broad-based news about the economyas a whole but for other indications of the value of different types ofinvestments over either the long or the short haul. Of course, this is no more than anecdotal evidence and is not pursuedfully in this book, so the reader has to take the author largely on faithas far as the success of this system is concerned. Even thoughthe author says to make profits slowly, he also suggests selling early,which again is a bit contradictory. If you own too many stocks, you may be slow to reactwhen a problem develops. he suggests avoiding foreign stocksbecause of the added dangers involved. He says no portfolio should have a stock taking a lossfor more than six months. Work CitedO'Neil, William J. What this authoroffers is not an analysis of the stock market but a how-to book for thesmall investor. The book was written as part of the author's ongoing investment seminarsand workshops, and he suggests a high rate of success for those who havelistened to him and who follow his C-A-N-S-L-I-M method. Instead,the author says that the best results are achieved through concentration ofeffort on just a few stocks about which you know more and which you canwatch more carefully. It is evident that the first step for aninvestor is to perform a good deal of research in order to connect figuresand information with the general categories involved in the C-A-N-S-L-I-Mletters. At the sametime, he offers advice that cold be seen as contradictory or confusing tothe small investor. among thepuzzling aspects of the stock market are why good economic times producejitters on the market while bad economic news often means improved buyingon the market. He also saysthat if you buy stocks, you are certain to make a large number of mistakesin both the selection of stocks and in the timing of purchases, and thesepoor decisions will lead to losses. While the author recommends investing forthe long haul, this does not mean to hang on to stocks that are notperforming well. When to sell is an issue that is of importance to the buyer, and thistopic is addressed next. Again, it is not clear how to evaluate that book orthe fact that selling books seems to be the primary interest of the authorin deciding how well he is conveying information the reader needs. The author calls his system by the acronym C-A-N-S-L-I-M, and he saysthis method was developed by going back over every big winning stock eachyear since 1958. In explaining each of the categories, however, the author does a goodjob of indicating what to look for and how to avoid being misled byincomplete data. He says the primary issues are how to pick and buy astock, how to significantly minimize the risk taken in buying stocks, andwhen to sell your stock. The futures market is another that is too dangerous andvolatile for the average small investor, and only large investors make useof the commodity market for hedging. To this end,the author states that it is best to take our losses quickly and ourprofits slowly, meaning if losses are incurred, changes have to be made,while profits can be developed over a period of time. The book as a whole is in fact a good way to learn to viewthe stock market in a calmer manner and to know how to behave in the marketeven if you do not fully understand what is taking place on any given day,for the way markets respond to different situations is not always rationalin the short term and maybe more so in the long term. The author suggests asking a lotof questions, though it is not so clear what kinds of answers one shouldsee as important. He also makes specific recommendations regarding what types of stocksto buy and what types to avoid. The intent of the book is to help the small investor make money,and to this end the author has created a simple system and ways for theindividual to remember the essentials of this system. The author suggests buying another of his books, though, a bookin which he has gathered all the necessary information on the stock marketwinners of the past. For most people, the stock market is a mysterious financialinstitution that still has a profound effect on their lives. Often, badeconomic news seems to spur investment so that the stock market flourishes,while good news about the economy can lead to a stock market slump. He says over and over that the best thingto do is to trim losses quickly, though he does not note that this may bedifficult to do in certain instances. The author also rightly points out several times that the stockmarket is a speculative venture and has to be viewed as such. The stock market is considered an indicator of the health of theeconomy, though precisely what aspects of the stock market are to beconsidered vital indicators remains a matter of argument and evenspeculation. he says not to buy penny stocksbecause while they seem cheap, they are of low quality and are undulyspeculative. Many of these suggestions are good and might be seen asno more than common sense, but common sense often has to be stated forpeople to understand the need to follow it. These are: C: Current quarterly earnings A: Annual earnings increases N: New products, new management S: Supply and Demand L: Leader or laggard I: Institutional sponsorship M: Market directionThe author begins by noting that the investor can begin with smallinvestments and so need not worry that he or she does not have enough moneyto invest in the stock market. If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.