What is How to Make Money in Stocks about?

William O'Neil's How to Make Money in Stocks is the manual behind CAN SLIM, a growth-stock selection and timing system O'Neil developed by studying every major market winner in the United States from 1880 onward. O'Neil founded Investor's Business Daily as a newspaper to support investors using this approach, and this book is his most comprehensive explanation of how it works. Now in its fourth edition, it remains one of the most widely read books on growth investing and stock market timing.

CAN SLIM is an acronym for seven criteria: Current quarterly earnings, Annual earnings growth, New products or management, Supply and demand for shares, Leader or laggard among peers, Institutional sponsorship, and Market direction. Each letter gets a chapter. The thesis is that stocks with the highest probability of major price moves share identifiable characteristics at the time of their breakout. O'Neil backs this with exhaustive research showing that most of history's best-performing stocks — from early Apple to Cisco to Google — showed the CAN SLIM pattern before their biggest runs.

The system combines fundamental screening (earnings growth rate, return on equity, profit margins) with technical timing (chart patterns, volume signals, base formations). O'Neil's great insistence is that both matter: fundamentals identify what to buy and technicals identify when. He is equally insistent about cutting losses: the rule of selling any stock that falls 7–8% below your purchase price, without exception, is central to the system. Most amateurs hold losers too long; CAN SLIM builds loss discipline into the methodology explicitly.

The book is long and detailed, and honest readers will acknowledge that executing CAN SLIM consistently is harder than describing it. The chart reading requires practice, and the methodology gives frequent signals to buy and sell, producing real transaction costs and emotional friction. Critics note that the system requires significant time and active management, making it unsuitable for investors who prefer a passive approach. Still, for growth investors, the research behind the system is genuinely compelling, and O'Neil's insistence on data over opinion sets the book apart from most stock-picking guides.