How to Make
Money in
Stocks
A Winning System in Good Times or Bad
William J. O'Nei
http://phamtrung.wikispaces.com/file/vi ... or+Bad.pdf
What do you think of this book?
How to Make Money in Stocks
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marksmeets302
- Posts: 527
- Joined: Thu Dec 10, 2009 4:37 pm
I own the book, but never read it. Which is weird because his canslim method is the basis for one of my portfolios. On the other hand, canslim can be explained in 2 pages. You don't need a 300+ page book for that 
.
If instead you wish to know if canslim is a "good" method I can from my own experience say: yes. It can be a bit volatile at times though, so best to combine it with other uncorrelated portfolios.
. If instead you wish to know if canslim is a "good" method I can from my own experience say: yes. It can be a bit volatile at times though, so best to combine it with other uncorrelated portfolios.
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mklim_irlpl
- Posts: 91
- Joined: Sun Jul 21, 2013 5:56 pm
Well one of the most successful traders and hedge fund managers claims that he's read this book 5 of 6 times...which makes me believe that it's worth reading the whole book 
Reading is no substitute for doing IMHO.
I've made a lot of money investing and all of it long term investing. Best book I ever read was Roger Lowenstein - 'The making of an american capitalist' changed everything for me.
I've made a lot of money investing and all of it long term investing. Best book I ever read was Roger Lowenstein - 'The making of an american capitalist' changed everything for me.
Peter, when you say you've made "a lot of money" how much does that compare relatively to how much you've made from sports trading. (You don't have to answer that if you don't want to, of course).
My problem with investing is that it takes significant capital to get anywhere. Of course once you get started you can grow exponentially, but you still need a significant starting bank (at least 5 figures I'd say) to avoid taking 10s of years before you can make a living from it.
Presumably you wouldn't have been able to build a successful stock portfolio if you didn't have the cash from your early trading days?
My problem with investing is that it takes significant capital to get anywhere. Of course once you get started you can grow exponentially, but you still need a significant starting bank (at least 5 figures I'd say) to avoid taking 10s of years before you can make a living from it.
Presumably you wouldn't have been able to build a successful stock portfolio if you didn't have the cash from your early trading days?
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marksmeets302
- Posts: 527
- Joined: Thu Dec 10, 2009 4:37 pm
The power of compounding is simply awesome. And 10s of years is not that much, as long as you enjoy the ride.but you still need a significant starting bank (at least 5 figures I'd say) to avoid taking 10s of years before you can make a living from it.
I've always been very interested in the markets, so as soon as I when started earning anything I started investing. That was in '96. Can't deny that I've had a lot of luck, but also put a lot of hours into it. My starting capital was 7500 guilders, which was roughly equal to 3000 pounds. About a year ago I retired (which is not to say I don't do anything anymore, I just don't have to). It's not my intention to brag about this or to be arrogant, just to show you this is possible and encourage everyone to consider investing.
Scared or don't know where to start? Consider the permanent portfolio http://en.wikipedia.org/wiki/Fail-Safe_Investing: low risk, great results.
So just to estimate some figures about what's realistically achievable with investing...
The two things you have control over are your initial capital and your annual return. For simplicity's sake, let's calculate by ignoring inflation and tax (which can be avoided if you use an ISA anyway). Let's also set a figure of, say, £30k which will be the target of how much profit we eventually want to be making a year.
Example Case 1:
- Start with £10k capital
- Average 10% return a year
Result:
- It would take 37 years to before you would be making more than £30k a year in annual profits
Example Case 2:
- Start with £50k capital
- Average 10% return a year
Result:
- It would take 20 years
Example Case 3:
- Start with £50k capital
- Average 20% return a year
Result:
- It would take 8 years
Given the return of the S&P 500 over the last 20 years (after accounting for inflation and including dividends) averaged 8.8%, I think 10% return would be pretty amazing for anyone. 20% average over any long period would just be unrealistic wouldn't it?
There's also the issue of when you stop and start withdrawing money and slowing down or stopping your compounding rate. Although I guess by that time you'd have a couple hundred thousand in capital.
The two things you have control over are your initial capital and your annual return. For simplicity's sake, let's calculate by ignoring inflation and tax (which can be avoided if you use an ISA anyway). Let's also set a figure of, say, £30k which will be the target of how much profit we eventually want to be making a year.
Example Case 1:
- Start with £10k capital
- Average 10% return a year
Result:
- It would take 37 years to before you would be making more than £30k a year in annual profits
Example Case 2:
- Start with £50k capital
- Average 10% return a year
Result:
- It would take 20 years
Example Case 3:
- Start with £50k capital
- Average 20% return a year
Result:
- It would take 8 years
Given the return of the S&P 500 over the last 20 years (after accounting for inflation and including dividends) averaged 8.8%, I think 10% return would be pretty amazing for anyone. 20% average over any long period would just be unrealistic wouldn't it?
There's also the issue of when you stop and start withdrawing money and slowing down or stopping your compounding rate. Although I guess by that time you'd have a couple hundred thousand in capital.
I started dabbling in the stock market during the privatisation era. I did some tech support on the side for a local financial advisor and couldn't believe that you got paid for owning shares (dividends). It seemed like a no brainer to me, but I didn't really have a penny in capital.xitian wrote:Peter, when you say you've made "a lot of money" how much does that compare relatively to how much you've made from sports trading. (You don't have to answer that if you don't want to, of course).
My problem with investing is that it takes significant capital to get anywhere. Of course once you get started you can grow exponentially, but you still need a significant starting bank (at least 5 figures I'd say) to avoid taking 10s of years before you can make a living from it.
Presumably you wouldn't have been able to build a successful stock portfolio if you didn't have the cash from your early trading days?
So I just saved hard and invested all my spare cash. When I landed a decent job in 1993 they sent me to the US where I got a better view on investment and in 96 I joined the first online forum. By then I had plans to do it full time. I got myself into that position in the early 2000's then Betfair got in the way.
But since I started Betfair seriously, all the spare cash from Betfair I've invested. During the 2008 crash I had plenty of spare cash so invested heavily and that's really catapulted things forward. I have a much bigger portfolio than I ever imagined.
Thanks to a lack of growth on the exchange and PC the balance has tipped back towards the investment in recent years. I've treated trading as a way of funding my long term investments.
As Mark mentioned compounding long term is the trick. You would be amazed how well it works. I've spent years hunting for decent companies that are out of favour then waiting for them to come into favour and holding them. I've had the odd howler but that is dwarfed by some of the significant gainers you can get.