The CAN SLIM system has been popular with our members for a long time as a growth approach for selecting and managing a portfolio of stocks. The CAN SLIM approach is presented by William O'Neil in his book titled "How to Make Money in Stocks: A Winning System in Good Times or Bad," (Mc-Graw Hill, third edition, 2002). O'Neil developed the approach by studying the characteristics common to 600 of the biggest winning stocks from the 1950s through 2001. The rules of the system are based upon the fundamental and technical factors of these winners before they had their big price increases. O'Neil also founded Investor's Business Daily, a financial newspaper that presents stock and market information consistent with the CAN SLIM system.
The approach seeks out companies with a proven record of earnings and sales growth that are showing strong relative price strength and support from leading institutions. O'Neil does not mind paying rich premiums for such stocks with good prospects, and takes the stand that most stocks with low price-earnings ratios are probably priced correctly by the market. O'Neil believes that it is important to follow the market closely and try to lighten up your stock exposure when going into a bear market.
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