William J. O'Neil Quotes

“Forget the adage buy low and sell high.”

“I've never met a successful pessimist.”

“It is one of the great paradoxes of the stock market that what seems too high usually goes higher and what seems too low usually goes lower.”

“My philosophy is that all stocks are bad. There are no good stocks unless they go up in price. If they go down instead, you have to cut your losses fast Letting losses run is the most serious mistake made by most investors.”

“Over-diversification is a hedge for ignorance.”

“Since the market tends to go in the opposite direction of what the majority of people think, I would say 95% of all these people you hear on TV shows are giving you their personal opinion. And personal opinions are almost always worthless – facts and markets are far more reliable.”

“The first thing I learned about how to get superior performance is not to buy stocks that are near their lows, but to buy stocks that are coming out of broad bases and beginning to make new highs.”

“The majority of unskilled investors stubbornly hold onto their losses when the losses are small and reasonable. They could get out cheaply, but being emotionally involved and human, they keep waiting and hoping until their loss gets much bigger and costs them dearly.”

“90% of the people in the stock market, professionals and amateurs alike, simply haven't done enough homework.”

“A great trader once noted there are only two emotions in the market: hope and fear. The only problem, he added, is we hope when we should fear, and we fear when we should hope. This is just as true in 2009 as it was in 1909.”

“Charts plus earnings will help you tell the best stocks and general markets from the weaker, riskier stocks and markets that you must avoid altogether.”

“Detect a market top, keep a close eye on the daily S&P 500, NYSE Composite, Dow 30, and Nasdaq Composite as they work their way higher. On one of the days in the uptrend, volume for the market as a whole will increase from the day before, but the index itself will show stalling action (a significantly smaller price increase for the day compared with the prior day’s much larger price increase). I call this 'heavy volume without further price progress up.'

The average doesn’t have to close down for the day, but in most instances it will, making the distribution (selling) much easier to see, as professional investors liquidate stock. The spread from the average’s daily high to its daily low may in some cases be a little wider than on previous days.”

“I made a rule that I’d buy each stock exactly at the pivot buy point and have the discipline not to pyramid or add to my position at more than 5% past that point. Then I’d sell each stock when it was up 20%, while it was still advancing.”

“I read all investment books in the library. The best was 'How to Trade in Stocks', by Jesse Livermore.”

“If one of the indexes is down for the day on volume larger than the prior day’s volume, it should decline more than 0.2% for this to be counted as a distribution day.”

“If you own a portfolio of stocks, you must learn to sell the worst performers first and keep the best a little longer.”

“Logarithmic-scale graphs are of great value in analyzing stocks because they can clearly show acceleration or deceleration in the percentage rate of quarterly earnings increases. One inch anywhere on the price or earnings scale represents the same percentage change.

This is not true of arithmetically scaled charts. On arithmetically scaled charts, a 100% price move from $10 to $20 shows the same space change as a 50% increase from $20 to $30. But a log-scale graph shows a 100% increase as twice as large as the 50% increase. Weekly charts in Daily Graphs Online are properly logarithmic.”

“Success in a free country is simple. Get a job, get an education, and learn to save and invest wisely. Anyone can do it. You can do it.”

“The market has a simple way of whittling all excessive pride and overblown egos down to size. After all, the whole idea is to be completely objective and recognize what the marketplace is telling you, rather than try to prove that the thing you said or did yesterday or six weeks ago was right. The fastest way to take a bath in the stock market or go broke is to try to prove that you are right and the market is wrong.”

“The moral of the story is: never argue with the market. Your health and peace of mind are always more important than any stock.”

“The whole secret to winning big in the stock market is not to be right all the time, but to lose the least amount possible when you’re wrong.”