How William O’Neil – The Legendary Investor – Changed My Life

I felt it only right to publicly acknowledge and thank William J. O'Neil for the lifestyle I enjoy today. He passed away in May at the age of 90, and I wanted to wait until now to explain how he changed my life. 

William O'Neil was one of my investment mentors, although I only had the special pleasure of meeting him on two occasions. The first time was in 1980 when he spent some time with myself and classmates at the Stanford Business School. It was a life passage for me. Through O'Neil's newspaper, (Investors Business Daily), his books, seminars, and various other "pixie dust free" educational tools, I, too, became a bone fide investor. He was the "knower" and I became the "spongy learner." As a knower and an investing doer, he diligently researched the history of successful equities and then made a fortune applying those insights.

Herein lies the conundrum. The overwhelming majority of bona fide market wizards are something less than 100% transparent when discussing their methods. O'Neil was the antithesis in his willingness to share why he succeeded and all the specifics. His books and seminars provided the roadmap and his newspaper was the facilitating tool. For myself personally — and I suspect the same for nearly all my readers — it is StockCharts.com in the fast-paced digital era that has now become the superior facilitating tool of choice for successful investors globally. 

O'Neil struck me as a quiet man. More of a listener than a talker. Appropriately, he would often encourage investors to think of the stock market as a conversation. Let it speak to you. Be more a listener than a talker. I always remember what he said: "The stock market is human nature on parade." — words that are never better reinforced than by the ongoing recurrence of historical chart patterns. Thanks to O'Neil, I learned both to embrace technical analysis and to trust the messages my charts shared with me. These proved to be exceedingly profitable skills over the years. 

Life lessons were bundled into his information-packed investment tutorials as well. He always preached positivism. He was an ardent believer in America and the long term growth of its economy and equities. For those reasons, I have always been a growth-oriented investor and have avoided short selling. Praying for a stock to go down has never been in my nature. 

Early on, O'Neil made it clear to me that I needed to leave my ego outside. Personally, not easy to do. The markets will humble everyone, he said. Identifying and acknowledging your mistakes — and then making the necessary adjustments  — was a prerequisite for consistent long term success as an investor. His message was clear. Operating without guardrails (i.e. not having a well-defined exit strategy) and letting your ego participate in your trades was certainly an approach doomed to produce mediocre results. 

O'Neil described these elements in great length and detail. My takeaway was something I think of as the "Holy Trinity of Investing." A big part of calling this blog ‘The Traders Journal' is that he convinced me to keep an investing journal. In it, to this day I discuss my abilities to acknowledge my mistakes and cut my losses. My journals recorded my trading mistakes in great detail and my winners as well. Then too, my journals helped discipline me to recognize those mistakes real-time and to avoid repeating them. It's obvious but still profound: acknowledge your mistakes, act, learn from them, avoid them in the future. Sounds straightforward. The challenge is in the execution through all types of markets. Both he and Buffett preached the gospel of avoiding mistakes as paramount to extraordinary results. 

Finally and perhaps most importantly, William O'Neil both inspired and convinced me that in order to truly excel and achieve consistent profits, one needs a detailed roadmap. One that incrementally improves your probabilities over all 10 stages of investing. Our book about "The 10 Stages Of Stock Market Mastery" resulted indirectly from O'Neil's own 7-step program for buying an equity. It's all about discipline and consistently embracing an organized methodology which enables an investor to peel back the vast layers of the market and approach it with a clear lens so one isn't impulsively tempted to buy the "bright shiny thing" in today's news. 

The bottomline is that this brief blog is meant as a tribute to William O'Neil. In the near future, I plan on sharing with you 12 specific takeaways that salute the significant impact O'Neil has had on my own investing roadmap. Until then...William J. O'Neil, rest in peace.

Trade well; trade with discipline!

Gatis Roze, MBA, CMT

StockMarketMastery.com