William O’Neil’s CANSLIM system in my opinion is a great trading system, and I respect a lot of people on Twitter who use that system. I find that a lot of the stocks that I end up trading using Stage Analysis are the same stocks traders using CANSLIM are trading. The only reason I don’t use CANSLIM is I like Stage Analysis better because it is simpler but just as effective in my opinion.
With that in mind I came across two recent quotes by William O’Neil that hit the nail on the head regarding what is going on in the markets right now with the recent devastating decline:
You absolutely must have a proven, reliable method to accurately determine whether you’re in a bull or bear market…This is the most important lesson you can learn if you want to stop losing and start winning. — William O’Neil
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. — William O’Neil
And Stan Weinstein emphasizes in his book that if you change absolutely nothing about your trading, except never buy or hold a stock in a Stage 4 downtrend, you will dramatically improve your trading results. He identifies this as the most important point to learn from his book.
So here you have two investment legends with totally different trading methodologies, agreeing on the same point and emphasizing it is the most important thing! I think it’s awesome they laid it out so well in their respective books and highly recommend both to anyone interested.
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