The book recommend buying stock following the “CAN SLIM” methodology. CAN SLIM is a formula Mr. O’Neil found after many years studying the markets and which he credits with his success in trading. What I liked about it is the hands-on of / no BS of his formula. Here are are my notes.

C- Current Quarterly Earnings per Share

• Only buy stocks which QEPS  have risen by a minimum of 20% year on year
• Make sure the last two quarters are positive
• If two successive quarters are in the red, the stock may be trouble

A – Annual Earning Increase

• Only buy stocks that have a compounded growth rate of earning superior by at least 25% year on year
• It is imperative that this is coupled with the +20% QEPS
• P/E ratios should be ignored

N- New Management, Products, Highs

• 95% of stunning successes have a new product or management
• Look for companies emerging from price consolidation patterns
• Forget cheap stocks, they are usually cheap for a reason

S – Supply and Demand

• Small supply = better performance
• Stocks with a large percentage of ownership from Management are good bet
• Regular share buy-back may lead to higher earning per shares
• Lower debt ratios are better
• Look for volume increase when stocks are going up

L – Leader or Laggard

• Buy the best two or three stocks in a group
• Stocks’ relative price strength need to be superior to 80
• Overall strength line should not be going down (ex. 85, then 80, then 78)
• Sell the worst performing stocks first

I – Institutional Sponsorship

• Winning stocks need 3 to 10 institutional owners (funds, pensions, insurances etc.)
• Shy away from over owned stocks by institutional
• Try to find the intelligent, highly informed institutional to follow their actions

M – Market Directions

• Track and interpret the daily price & volume chart of the general market
• Follow the leading stocks evolutions
• The big money is in the first two years of a Bull Market

I found the rest of the book to be less interesting. Still a few gems to extract, but otherwise, the author was mainly sharing his experience and going into more details about his past 35 years as an investor. Here are the few gems I extracted

• Sell if your stock take a dive.
• Ask yourself regularly “Do I want to buy this stock now ?”
• Limit your lossed to 7% or 8% for each stock
• Get out while the stock is up and has a chance to break
• Only buy 6 to 7 stocks at one
• No well run portfolio should have losses carried over 6 months
• Never short sell in a bull market
• Never short sell thinly capitalized stocks
• If you like mutual funds, big money is made long term – i.e. 10 to 15 years or more, and increase your investment when in a bear market as a fund always recover
• Keep things simple !!

Here it is folks !
All in all, a highly recommended read.

How To Make Money In Stocks: A Winning System in Good Times or Bad

While the books were already a huge success, many discovered the series thanks to the TV series last year. HBO’s picked up the rights to the series and their adaptation of Westeros is simply superb. I’m not the only one to think so, the first season received many acclaims and won many awards. The same goes for the season two opener that we just saw yesterday. It just picked up where the first season left us. I can’t wait to watch episode two !

• The Book – A Game of Thrones (A Song of Ice and Fire, Book 1)
• The TV series – Game of Thrones: The Complete First Season [Blu-ray]

My sister visited Nepal late last year. She got me this book for Xmas and I’ve read it in January. It is a wonderful journey into the life of a Sherpa who climbs Everest to better understand his father, the famous Tenzing Norgay, who was the first man to make it to the summit.

The author’s unique vantage point as a Sherpa educated in the West brings the book to another level entirely. It is more than a mountaineering story. With Chomolungma*  as a witness, Jamling shares with us his journey where he will find his spiritual and family roots. It’s fascinating to better understand the way Sherpas approach and live the mountain and how cultural differences get more and more acute as the peak gets closer.

Honest, insightful and thought-provoking, Touching My Father’s Soul: A Sherpa’s Journey to the Top of Everest is a great read for all interested in mountaineering, Everest or Buddhism.

* Chomolungma is the Tibetan name for Everest, which can be loosely translated to “Mother goddess of the earth”

The author takes on one of history’s more important question: ‘Why did history unfold differently on different continents?’ and demonstrates that geography and disparity in environments can explain most of the divergences in evolution between civilizations.

Societies that had a head start in food production all benefited from a geo-location that gave them access to  wild plants and animals that were suitable for domestication. This was critical for the accumulation of food surpluses, leading to the buildup of large populations enjoying a military advantage through mere numbers even before they had developed any technological or political advantage. Furthermore, these food surpluses could also feed non-food-producing specialist, setting these societies on a path towards developments of economically complex, socially stratified, politically centralized societies.

What I like most about this book is that, while scholarly, it is well written and presented in a very easy to understand way. If you have an interest in world history, or wish to be able to refute by A + B the ideas of human development based on race, this is the book for you : Guns, Germs, and Steel by Jared DIAMOND.