William J. O’Neil is a successful stock trader and the founder of newspaper Investors’ Business Daily. He is also the writer of several books on stock trading. His ideas on trading can be helpful for an average person. He insists on protecting oneself rather than risking everything to maximize returns.
Here are some of the best trading insights (quotes) by William J. O’Neil that can be helpful to the stock traders.
Best Trading Insights (Quotes) By William J. O’Neil
The common mistake in investing is failing to understand the importance of buying high quality companies.
Learn to always sell stocks quickly when you have a small loss rather than waiting and hoping they’ll come back.
Don’t buy a stock because of its dividend or its P/E ratio. Contrary to conventional wisdom, the best stocks rarely sell at low P/Es. Just as the best ballplayers make the highest salaries, the better companies sell at higher P/Es.
Over-diversification is a hedge for ignorance.
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.
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.
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.
Buying stocks on the way down is dangerous. You can get wiped out. So, stop this risky habit. Anyone who buys stocks on the way down in price because they look cheap will learn the hard way this is how you can lose a lot of money.
The moral of the story is: never argue with the market. Your health and peace of mind are always more important than any stock.
When you make a mistake in the stock market, the only sound thing to do is to correct it. Don’t fight it. Pride and ego never pay off.
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.
When everybody is running around saying how great a stock is, everybody who can buy probably already has, and the only direction for the stock to go at that point is down. When it’s obvious and exciting to everyone, it’s too late.
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.
If you own a portfolio of stocks, you must learn to sell the worst performers first and keep the best a little longer.