What will I learn about: the use of historical stock chart patterns, specifically the 'Cup with Handle,' to pinpoint the exact moment to buy a stock before it shoots upward?

Master the use of historical stock chart patterns, specifically the 'Cup with Handle,' to pinpoint the exact moment to buy a stock before it shoots upward.

What will I learn about: why a consistent, substantial percentage increase in a company's Earnings Per Share (EPS) is the single most important indicator of a winning stock?

Discover why a consistent, substantial percentage increase in a company's Earnings Per Share (EPS) is the single most important indicator of a winning stock.

What will I learn about: Protect your portfolio from disastrous market crashes by learning to invest only in companies with concrete, proven profitability rather than speculative hype?

Protect your portfolio from disastrous market crashes by learning to invest only in companies with concrete, proven profitability rather than speculative hype.

What will I learn about: Identify disruptive, innovative companies that have historically driven exponential market growth so you can capitalize on the next wave of revolutionary technology?

Identify disruptive, innovative companies that have historically driven exponential market growth so you can capitalize on the next wave of revolutionary technology.

What will I learn about: Rethink the traditional 'buy low, sell high' logic and learn why purchasing an innovative stock just as it hits a new high can actually lead to massive, continuous returns?

Rethink the traditional 'buy low, sell high' logic and learn why purchasing an innovative stock just as it hits a new high can actually lead to massive, continuous returns.

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How to Make Money in Stocks

A Winning System in Good Times and Bad

William J. O'Neil

★ 4.4 / 5(394 ratings)

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Money & Investments

If You're Curious About These Questions...

You should listen to this audiobook

💡What’s the secret seven-letter formula that has helped investors identify the market’s biggest winners long before they become household names?
💡Did you know that almost every legendary stock market winner since 1880 followed the exact same chart pattern before its price exploded?
💡Have you ever wondered why some investors consistently profit in any market while others get left behind, and how you can spot the warning signs of a failing stock before it’s too late?

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Key Takeaways from How to Make Money in Stocks

✓Master the use of historical stock chart patterns, specifically the 'Cup with Handle,' to pinpoint the exact moment to buy a stock before it shoots upward.
✓Discover why a consistent, substantial percentage increase in a company's Earnings Per Share (EPS) is the single most important indicator of a winning stock.
✓Protect your portfolio from disastrous market crashes by learning to invest only in companies with concrete, proven profitability rather than speculative hype.
✓Identify disruptive, innovative companies that have historically driven exponential market growth so you can capitalize on the next wave of revolutionary technology.
✓Rethink the traditional 'buy low, sell high' logic and learn why purchasing an innovative stock just as it hits a new high can actually lead to massive, continuous returns.

Learning Tools

Reinforce what you learned from How to Make Money in Stocks

Mind Map

How to Make Money in Stocks

Chart Patterns & Timing+

Earnings & Profitability+

Innovation & Leadership+

Supply, Demand & Ownership+

Institutional Sponsorship+

General Market Direction+

Risk Management+

Quiz — Test Your Understanding

Question 1 of 8

According to the 'Cup with Handle' stock chart pattern, at what precise point should an investor buy the stock?

A. At the very bottom of the rounded curve before it flattens.
B. Right after the stock forms the flat base of the cup.
C. Exactly when the stock dips back to form the 'handle.'
D. Immediately after the stock reaches a new all-time high above the cup.

Question 2 of 8

What does the author consider to be the most important factor to look at when deciding to buy a stock?

A. A high dividend yield and stable historical performance.
B. A significant percentage increase in Earnings Per Share (EPS).
C. A low price-to-earnings (P/E) ratio compared to competitors.
D. A recognizable, sentimental, and well-loved brand name.

Question 3 of 8

How does the author suggest investors approach highly innovative companies whose stock prices are already at all-time highs?

A. Wait for the stock to drop significantly to adhere to the traditional 'buy low, sell high' rule.
B. Avoid them entirely, as they are likely overvalued and due for a market correction.
C. Short the stock, expecting the hype surrounding the innovation to fade quickly.
D. Do not be afraid to buy them, as stocks hitting new highs often continue to hit new highs.

Question 4 of 8

Which of the following is considered a positive indicator regarding the supply and demand of a company's stock?

A. The company frequently issues millions of new shares to raise capital.
B. Top management owns a very small fraction of the company, ensuring unbiased decisions.
C. Top management owns a significant percentage of shares and the company is buying back its own stock.
D. The company has billions of shares outstanding, making its stock price highly volatile and explosive.

Question 5 of 8

When selecting stocks within a specific industry, what strategy does the text recommend?

A. Invest in sentimental, old-favorite companies because they are safer and less volatile.
B. Buy the dynamic industry leaders with the best earnings, sales growth, and profit margins.
C. Invest in the second-best 'copycat' companies, as they have more room for explosive growth.
D. Focus on established computing giants that have remained static but reliable over the decades.

Question 6 of 8

Why is it important for individual investors to look for stocks with 'institutional sponsorship'?

A. Because large institutions make up the bulk of stock-buying and their activity drives prices higher.
B. Because institutions are legally required to guarantee the performance of the stocks they own.
C. Because stocks owned by institutions are immune to general market downturns and crashes.
D. Because institutional sponsorship means the stock is heavily discounted for retail investors.

Question 7 of 8

What is the likely outcome for individual stocks if the general market begins heading downward?

A. Most stocks will remain stable as long as their individual earnings are strong.
B. Three out of four stocks will lose value regardless of how good the individual stock-picking was.
C. Small-cap stocks will rise rapidly while large-cap stocks will fall.
D. Institutional investors will automatically buy more shares to stop the decline.

Question 8 of 8

What actionable rule does the author provide for cutting losses in the stock market?

A. Sell a stock when it plunges to 8 percent below your buy-in price.
B. Sell half of your shares if the stock drops by 15 percent.
C. Hold onto the stock indefinitely as long as the company has a good product.
D. Sell immediately if the general market indices show a single day of decline.

How to Make Money in Stocks — Full Chapter Overview

1Recommendation
21 — Learn stock chart patterns—especially one key pattern.
32 — Rising earnings are the most important sign of a strong stock.
43 — Innovative companies can deliver strong returns, but timing matters.
54 — Supply and demand play a key role in choosing stocks.
65 — Buy the leaders in their industries.
76 — Look for stocks backed by institutional sponsorship.
87 — Keep a close watch on the overall market direction.
98 — Final summary

How to Make Money in Stocks Summary & Overview

How to Make Money in Stocks (1988, new edition 2008) is a guide to building wealth in the stock market, with proven tips for finding winning stocks and avoiding losers. By learning from the past, How to Make Money in Stocks shows us how to spot telltale patterns in unpredictable markets and profit from them.

Who Should Listen to How to Make Money in Stocks?

Rookies looking to invest for the first time
Experienced traders in search of new tips
Anyone interested in the mysterious workings of the market

About the Author: William J. O'Neil

William J. O’Neil is an entrepreneur, stockbroker, and writer who founded the brokerage firm William O'Neil & Co. Inc in 1963 and the business newspaper Investor's Business Daily in 1983. He’s the creator of the CAN SLIM investment strategy.