Investor's Business Daily presents The Real Secrets to Making Money with William J. O'Neill,
Chairman and Founder.
Talking about something that's timely, talking about something that's relevant, talking about
something that's really useful, we're talking about Investor's Business Daily.
Investor and Yield System Investor's Business Daily are solely responsible for my portfolio
performance.
The reason that I think IBD is absolutely fabulous is because a person who doesn't
know a thing about investing in stocks can pick it up and start learning.
So I don't think that people embrace things that are new.
There are a lot of old myths and people are very comfortable with those myths.
I am one of the largest producers at my firm and I don't look at the Wall Street Journal
at all.
Do you realize you are the luckiest people in the world because you live in the most
successful country on earth?
America leads the world in high technology, computer software, new life-saving drugs and
medical treatment.
We also lead in successful new entrepreneurial companies, companies you should definitely
learn to invest in.
Anybody can succeed in this new America if you're willing to work at it.
Why do I call this a new America?
Because today there are hundreds of outstanding companies growing rapidly and creating new
products, new services, new jobs and most importantly new business and investment opportunities
for you.
There is also a new cycle in America.
Every six months a fresh crop of innovative new companies explode onto our national scene.
Did you know that two-thirds of the best performing stocks in the last five years were new companies?
Everyone knows General Motors and Sears but how many of you knew about companies like
Amgen, Cisco Systems or Ascend Communications after they first became publicly owned?
These companies went on to become major stock market winners.
So why don't most people take advantage of the enormous opportunities that occur every
year in America?
I'll tell you why.
It's a lack of knowledge, a lack of information and sometimes it's just plain old fear.
We know there are many different ways to look at the market and the information in an investor's
business daily is a powerful resource for any investor but I want to tell you about
a proven method for identifying the very best companies.
Many years ago I decided to study the greatest winning stocks of all time to find out just
exactly why these companies performed so well.
What I discovered was that all these stocks had certain common characteristics just before
they experienced their biggest price gains.
I also discovered that what worked in 1953 also worked in 1963 and 1993 and of course
it works today.
The first and probably most important characteristic I found was that nearly all these companies
had substantial increases in both short and long term earnings growth rates.
IPD's unique stock tables are designed to help you quickly locate the companies with
the very best earnings records.
This is information you simply cannot find in any other newspaper in the country.
The first column in our stock tables is earnings per share rank.
Earnings per share rank lets you compare the earnings record of one company to all other
publicly traded companies.
These rankings are on a scale from 1 to 99 with 99 being the strongest.
For example, a company with an earnings per share rank of 90 has outperformed 90% of all
other companies in terms of its earnings record.
When you're looking for the best stocks, you generally want to look for companies with
an earnings per share rank of 80 and above.
IPD also publishes earnings figures for the companies that announced earnings that day.
Unlike other newspapers, we make it easy to find the strong performers by separating the
best ups from the most downs.
The next common characteristic I found was that most of the greatest stocks were actually
making new price highs just as it began their period of greatest performance.
I know this may seem a little strange or even a little scary to talk about stocks hitting
new highs, but ask yourself this.
How does a stock that's traded between $40 and $50 a share for the last year get to $100
a share?
The answer is it goes $51, $52, $53, and each step of the way the stock is making a new
high in price.
How many of you actually buy stocks when they hit new highs?
It's been my experience that only about 2% of investors buy stocks at new highs.
That when a stock emerges from a price consolidation area or what we refer to as bases and makes
new price highs, the best stocks tend to take off for substantial advances.
We learned through IBD that there's a reason that a stock sells for a certain price and
basically it applies to all marketing.
You get what you pay for.
I speak with investment professionals on a daily basis and whenever I mention investor
business daily, I was actually surprised to see how virtually they all read it and the
reason I asked them why do they read it and they said the quality of the information.
It makes you want to invest and want to invest well.
IBD stocks in the news mini graph section and the new high list help you pick out companies
breaking into new high ground and of course our stock tables both face all stocks making
new price highs are up one point or more so you can easily identify top performing companies.
Along with new price highs, I found that the most outstanding stocks had something new
that started their price advance.
Sometimes it was a new product or service, other times it was a new management concept.
The New America page in IBD profiles three companies each day that are creating those
new products, services and concepts.
What you need to do as an investor is locate the leading companies.
Companies with strong price performance in top performing industries and avoid laggard
companies, the ones with poor price performance in weak performing industries.
One of the best ways to sort the leaders from the laggards is to look at IBD's relative
price strength rank found in the second column of our stock tables.
Relative price strength rank measures a company's price performance for the past 12 months and
compares that performance to all the other publicly traded companies.
Like earnings per share rank, relative price strength rank is shown on a scale from 1 to
99 with 99 being the strongest.
So a company with a relative price strength rank of 90 has outperformed 90% of all other
companies in terms of price.
You should concentrate on stocks with an 80 or above relative price strength ranking because
they are the proven market leaders.
And remember, you can't find these unique features in any other newspaper.
Now because top performing companies often come from the same industries, IBD shows you
a list of the top performing industry groups for the past six months.
And our special weekend review feature organizes the market's leading stocks by industry group.
You can also spot the leading groups just by checking the new high list mentioned earlier.
Because it's organized by industry groups with the greatest number of stocks making
new highs each day.
It's a terrific way to spot the top five or six industry groups in the market.
Now you've all heard of the law of supply and demand and it applies to stocks as well
as other goods and services.
What I found from the study of greatest winners was most of these stocks had a low to moderate
number of shares outstanding just prior to making their big moves.
The reason is actually simple.
The smaller the supply of stock and the greater the demand, the faster the price can go up
and who creates the demand in the stock market?
It's the institutional investor, the mutual funds and banks.
These institutions buy up large blocks of stock and are a source of huge buying demand
thereby driving stock prices up.
Institutions behave just like an elephant climbing into a bathtub.
They're so big the water splashes all over the place they simply can't hide their activity.
Georgia has approximately $150 billion in equities if they decide just to take a 1%
investment position in a $30 stock.
They have to buy $1.5 billion worth of that stock.
That stock's going to go up in price and the volume will definitely expand.
That's one big elephant.
IBD is designed to help you recognize stocks with small to moderate supply and big buying
demand.
The stocks in the news mini chart section and the stock table listings show the total
number of shares outstanding making finding these stocks easy.
Features such as accumulation, distribution and volume percent change shown in our tables
show you the level of buying and selling activity and alert you to the unusual trading activity
in your stocks.
You will not and cannot get this kind of warning in any other newspaper.
It's concise.
It's consolidated.
There's a lot of information in a little space.
My portfolio has increased since reading Investor's Business Daily.
It has just offered me the opportunity to find more quality stocks.
I think that's what IBD really helps people do is to get there first.
One of the most valuable screens in IBD is the stocks with the greatest percent rise
in volume table which identifies companies with the largest increase in buying and selling
activity.
This section shows you which stocks are moving up or down in price on big volume.
And it both faces stocks with both earnings per share rank and relative strength ranking
of 80 and above.
This screen is a great source for identifying emerging market leaders.
The last thing I discovered about the greatest market winners was almost all of them made
their biggest price moves in a period when the general market was on an uptrend.
You can be right about an individual stock's characteristics but if the general market
is sluggish or in a decline, it's much more difficult for that stock to move up in price.
This means that you must learn how the general market is acting right now.
Are we in a bull market or a bear market?
Are stocks moving up on heavy volume or down on light volume?
If you look at the market indicators in IBD and you learn how to read those, you can actually
follow the market and know when to get out which is just as important as when to get
in.
The market page gets me into the market when the market is heading up and keeps me out
of the market when it's heading down.
To keep track of the market's condition, IBD provides large graphs that show you the
price and volume movement of the three major market indexes, the Nasdaq Composite, S&P
500 and the Dow Jones Industrial Average.
We place these charts directly above each other so you can easily identify market trends.
I found that most of the time, personal opinions and so-called experts are often wrong.
So the best thing to do is learn for yourself how to interpret the general market.
In my book, How to Make Money in Stocks, I devote a whole chapter to learning how to
interpret the general market.
All I can say about investors' business daily is that it's an opportunity.
I'm convinced with this paper there's going to be a bunch of people 30 years from now
that are real happy they discovered it.
It's my money.
I can hire as many mutual fund managers or stockbrokers as I want to, but they're not
as interested in my money as I am.
And I have to have the knowledge to take care of my money and our portfolio, and I feel
like I can do that with more confidence with the information that IBD provides to me daily.
Along with IBD's coverage of stocks, you'll also find the most complete coverage of mutual
funds, bonds, options, and commodity markets available anywhere.
In fact, no matter what your investment focus is, IBD gives you comprehensive and useful
information presented in a concise and time-saving format.
That's just one of the reasons IBD has been the fastest growing newspaper in the country
in recent years.
And we continuously redesign IBD to save you more time and help you make more money.
To make a long story short, it keeps you up to date with all the news you need, summarized
on one page to save you valuable time, and it gives you an edge in your business or professional
career.
I'm busy.
We're all busy.
I don't have time to sit down and read a paper for an hour in the morning.
I'm lucky to get 15 or 20 minutes, so I want it fast and I want it there where I can find
it.
It's wonderful not to have to really sift.
Once you subscribe to IBD, you'll get access to all our customer and investor education
support services.
We know learning to invest takes effort, so we provide many books, tapes, and educational
materials and a helpline to assist you in becoming a smarter, more successful investor.
We're here to help you and believe that anyone can learn to invest more successfully.
But like anything else, it takes practice, persistence, and old-fashioned hard work to
succeed.
With Investor's Business Daily, you'll have the tool and the support you need to make
that hard work pay off in this new America.
It's gonna help you.
It's gonna change your life.
Just give it a try.
That's why I like his two-week trial, because it's not one issue and it's not a month of
it.
It's, you know, hey, here's something.
Take a look at it.
Maybe there's something inside you'll like.
And that's what happened to me.
If you've made the decision to take the two-week trial subscription, then you have committed
yourself to at least understanding what this paper's about.
And I think if you just look at it as, well, I'm gonna get two weeks free of the paper,
then you're completely missing the point, because the value the paper is gonna give
you over time is gonna far exceed whatever you're gonna get out of habit for two weeks.
When you subscribe to IBD, you receive a significant discount off the new stand price.
And with a subscription of one year or more, you're entitled to two free gifts, William
O'Neill's powerful book, How to Make Money in Stocks, as well as Maximizing Your Success,
a video companion to Investor's Business Daily.
IBD has an entire network of services to help make your subscription really work for you.
For delivery questions, subscription rates, general inquiries, or suggestions, please
call Subscriber Services at 800-831-2525 during regular business hours.
Our highly trained staff welcomes your inquiries and will make every effort to assist you.
Investor's Business Daily can be found on the Internet at www.investors.com.
Our website contains selected articles, an electronic tour, and our exclusive education
course designed to help readers better understand and profit from the information found in IBD.
We also have a number of books, tapes, and charts available through our investment library.
For information about our full line of investment and education products, please call 800-831-2525.
In addition, read IBD each day for news about upcoming free seminars and all-day workshops
in your area featuring William O'Neill.
No newspaper in America helps you actually generate new investment ideas like Investor's
Business Daily.
And there's no better time to start being a part of the new America than right now.
I don't see how in the world you can get a confident start, have a chance of getting
the courage you need to make investments unless you start reading Investor's Business Daily
every day and learn how to use all of the information in there.
I would have to say if you were going to pick one thing that changed my life, it would have
to be that paper.
I'm an IBD fan, there's no doubt about it.