This post is about what I want to say about one of my hero's Bill O'Neil.
William O'Neil passed away at age 90. I am forever grateful for meeting him.
But first a few words on the general market. Over the last few weeks I have been increasing exposure to the stock market. The short, intermediate and longer term trends are in my favor.
Some names I may or may not be long have been:
This past week I have had plenty of time to reflect on many things. One major milestone I have pondered this week is the life of Bill O'Neil who passed away the other day. I had the most fortunate opportunity to attend a Los Angeles Stock and Bond Club luncheon in the summer of 1984. I went up to Los Angeles from San Diego where I was a broker, to visit a very good friend, David B. Utter, who was the man who hired me in the securities industry. A guy who had worked with Dave, Jim Damron who if memory serves, was the Investor Daily's first circulation manager. Here is a reprinted article from the New York Times on the Investor Daily newspaper when they were getting started. It says so much about Bill and what he envisioned.
Wednesday, May 14, 2008
Saturday, January 23, 2021
In 1996 I had met Dave Ryan at the Ritz Carleton in Atlanta and from that meeting we agreed I was to fly to Los Angeles to meet Bill as they were making a decision on what to do with their fund. I believe David was running it at the time and I was being interviewed to represent their NEW USA mutual fund. The fund had been launched in 1992 and was sold to MFS in 1997. Here are my notes of that meeting in Bill's office on Beatrice Street:
DEVELOPMENT OF A SERVICE AND MARKETING PLATFORM
WHAT WE DO AND WHAT WE HAVE DONE
TOP 10%, IN 1995 IN TOP 6%---” OUR BEST YEARS LIE AHEAD, WE KNOW THAT CLIENTS EXPECT AND DESERVE TO BE SATISFIED. OUR RIGOROUS INVESTMENT APPROACH, TECHNICAL EXPERTISE, AND CULTURE HAVE ENABLED US TO PROVIDE SUPERIOR INVESTMENT RESULTS.”----EARNINGS ACCELERATION, AN UNDENIABLE FORCE!!
SIZE ADVANTAGE--200MM WITH A 500MM CAP
12 MONTH/18MONTH/3 YEAR COMPARISONS
THE O’NEIL TEAM WORK ETHIC: THE RESEARCH PRODUCT ITSELF: THE TEAM TRACK RECORD, WHY IT CAN ONLY GET BETTER
WHAT BROKERS/PLANNERS LOOK FOR:
WHERE NEW USA FITS IN PORTFOLIO CONSTRUCTION
HISTORICAL PERFORMANCE AND RISK
INVESTMENT STYLE, PHILOSOPHY (CANSLIM), AND APPROACH
INTANGIBLES; “O’NEIL/RYAN” NAME BRAND,
FEE-BASED VS. COMMISSION BASED
MAINTAINING EXISTING CHANNEL RELATIONSHIPS
PRICING ISSUES: B, C, D, NO-LOAD SHARES?
INCREASED MARKETING SUPPORT
EXPENSE RATIOS; SHOULD WE MOVE UP THE 25bp TRAILER CURRENTLY PAID?
IBD--AOL--INTERNET--GETTING THE MESSAGE OUT AND SALES IN
BUYING BUSINESS--RECIPROCAL TRADING?
INTERACTIVE REAL-TIME ACCESS TO ACCOUNT INFORMATION: INVESTMENT ADVISORS NEED ACCESS TO PORTFOLIO MANAGEMENT
6. ADDITIONAL SALES
DATABASE---THE WONDA PRODUCT TIE-IN??
VALUE-ADDED PRODUCTS AND SERVICES
NEW USA VS SCHWAB VS FIDELITY
A ROLE FOR NICHE FUNDS?
Here is an article that summarizes what Bill was all about. To me, in every instance he was about hard work, straight up no bullshit talk and humility in all aspects of life. It wasn't easy going to those classes. It was expensive, flights, hotels and you have to eat! But it was an education well rewarded. I felt I attended so many of his classes around the country I should have been paid to teach! Probably in retrospect those classes and those tapes were the single best investment I have made in my short 69 years. New York, Dallas, Atlanta, Florida, California I flew on my dime because it was important to learn from Bill. I listened and Bill delivered so many truisms, about stocks, about markets and about life. Here are some"
Secret No. 1? "How You Think Is Everything." In other words, stay focused on success.
Secret No. 10: "Be Honest And Dependable; Take Responsibility."
Perhaps an 11th secret helps the founder of Investor's Business Daily and Investors.com continue to influence readers today:
No matter how big you've hit it, be modest. Stay humble.
If you walked into his office at IBD's Los Angeles headquarters a few years ago, you would have found it similar to the way it was about 10 years earlier in 2004, when IBD celebrated its 20th birthday.
The room was the same size as before, with barely enough space to house a conference table and shelves. Same metal desk. Same gray carpet. No mahogany paneling. No Impressionist or postmodernist paintings on the wall.
Instead, it featured a portrait of a dog, front pages of IBD and a photo of O'Neil meeting President Reagan in the Oval Office in the 1980s.
When a reporter asked O'Neil, "Outside of starting IBD, what is the achievement you are most proud of?" the Oklahoma native, now 85, arched his eyebrows, breathed deeply and shrugged.
"I don't think of that, don't look at that very much," he replied. "I think starting a business is important because you've got the total freedom to start and create what you want. We've obviously created products that have helped a lot of people."
He added: "If you want to start a business, you've got to have some experience in the field. If you're going to be selling peanut butter or something, you better have some experience with peanut butter."
O'Neil never joins a conversation with an intention to boast. He publicly cares less about what success he's had and more about the organization's mission today: Make readers smarter investors.
"I think the stock market is complicated itself, and not very many people really understand how the stock market works," he said. "If you're going to invest in the stock market, you're going to make mistakes. The typical person doesn't want to buy and then turn around and sell it for a loss. To some extent, to be very successful in the market, you've got to do what you have to do, which means taking some profits and taking some losses."
O'Neil has done very well in a large number of stocks over the decades. In 1962, as a broker at Hayden Stone in Los Angeles, he made profits of more than $200,000 (more than $1.5 million in today's money) in a short play on discount department store chain Korvette, a long investment in Chrysler and a buy in Syntex, one of the first companies to cash in on the birth control pill.
That haul helped the graduate of Southern Methodist University start his own institutional stock research firm — William O'Neil + Co. — on Nov. 7, 1963. One of the company's early achievements: managing money for the Vatican.
In 2013, O'Neil's research firm celebrated 50 years in the business. It remains a force in the world of institutional stock research.
He was one of the first people to use computers to collect vital stock information, and one of the first to place key information on fundamentals and buying trends by mutual funds and top money management firms right on the stock chart.
These simple innovations made his products stand out immediately.
"How did William O'Neil + Company survive and grow over 50 years? We concentrated on stocks, the one thing we know best," O'Neil wrote in the introduction to the book "50 Years of Independent Market Vision." "People asked me why I didn't buy bonds or commodities. The answer was simple: I didn't want to be distracted."
He added: "Just the concept of concentrating, seeing all the details, is important to innovation and being the best."
Twenty-one years after founding the securities company, O'Neil in 1984 launched Investor's Daily (later changed to Investor's Business Daily) with a mind toward building a new business and helping individual investors use the same tools as top money managers to find stock market winners.
Today, IBD is more than a paper and a website. It hosts dozens of beginning-to-advanced-level workshops as well as IBD Summits to help investors of all levels, including money managers, to become smarter in the stock market and make consistent profits through the platforms Investors.com, Leaderboard, SwingTrader and MarketSmith.
Awareness of IBD continues to grow. Investor's Business Daily reaches over 5 million investors each month who access IBD content across platforms including digital, mobile, print, events, meetups and social media.
Brian Edwards, a former high school English teacher who moved to Southeast Asia to start an online toy manufacturing business, first met O'Neil during a two-day Level 4 Masters program workshop in Los Angeles in 2004.
An active growth investor, Edwards asked O'Neil about the paper's online direction and whether he felt overwhelmed by the changes sweeping the media industry.
"I was looking for insights. Bill's response was knowledgeable and reassuring, down-to-earth, the meat-and-potatoes variety. I like meat and potatoes," Edwards told IBD. "Bill's investment approach is similar. He urges one to follow historically valid rules and not to get overwhelmed by emotion. He has found stability in an environment other find chaotic."
Does O'Neil ever take losses in stocks? Of course. One reason for his success in the market is the ability to consistently keep losses small, usually in the 3%-4% range.
He quickly learned the benefit of acting fast when you realize you have made a mistake.
In addition, early in his stock-investment career, O'Neil made a point to meet Gerald Loeb in New York. Loeb was making serious money as a stockbroker and wrote the investment classic "The Battle for Investment Survival."
In that book, he advised people to limit losses to 10% in any stock.
Loeb, a California native, went to Los Angeles and visited O'Neil, who recalls: "As he was leaving, I asked Loeb, 'Do you always sell every stock in trouble at 10%?' He said, 'I would hope to be out of them much quicker than that.' "
Onward In Oklahoma
Born in Oklahoma City, O'Neil moved with his family to Muskogee, roughly 40 miles southeast of Tulsa, when he was young.
His father had left the family by then, but O'Neil says his aunt motivated him to strive for success. She encouraged him to sell magazines to women in the neighborhood when he was in grade school.
O'Neil listened. Soon he landed a better-paying job on a newspaper route. He loved sports, particularly baseball, and worked hard to earn the extra $20 needed to buy a new glove or bat. After school, he hustled to finish his newspaper route so he could join baseball games.
"I was a pitcher. You're competing with nine batters all game long. You can do all right, then in the sixth inning, one of them beats you," said O'Neil, who also played the cornet. "I think I learned something from sports and a couple other activities."
O'Neil stresses that it's crucial to listen and learn from the very best in their respective fields.
The same philosophy applies to books. O'Neil once bought a library of investment books and found that most were junk. Only five or six really helped him learn how to make money in the stock market.
O'Neil himself has produced four editions of "How to Make Money in Stocks", a best-seller.
"Everyone and his brother has written a book on investing," he said. "Find out who is successful in a field, and if they've written a book, then the writing is from somebody who's been there, done that and been successful in that field. That, I think, is the whole key."
O'Neil is upbeat about the stock market's prospects over the next 30 years. "The country will grow and continue to grow as it's done in the past. You cannot hold human nature down," he said. "And you've got this freedom in the country, so there's a lot of opportunity. There will be new inventions, new developments, new companies. That I wouldn't worry about.
"You have this constant renewal of new products coming along, new services coming along, and a company does pretty well for a while. Then the company either gets too large to grow or is replaced by someone else. That's been going on for cycle after cycle after cycle."
In closing to remember Bill I want to say this.
About every person I have told to teach themselves about investing is to buy Bill's book on HOW to MAKE MONEY in STOCKS and, listen to me, READ IT TWICE, then get back to me. Many never bought the book, but I do know I sold a hell of a lot of books for Bill over the years!
You see, life is simple. Most people don't WANT TO DO THE WORK to do what it takes to get out of the stock market what THEY want to get out of the market.
I was lucky. When I joined Kidder Peabody in San Diego in April of 1982 we had a guy in the office who was making a market in the shares of Sol Price's company, PRICE CLUB, symbol PCLB, for those who are still alive reading this. Bill told me it was Price Club profits that allowed him to start the newspaper. Bill told me, sitting in his office in 1996 that, it was by pyramiding PCLB shares and buying as much on margin as he could, every POINT UP, he was able to afford his Investor Daily start! Hard to imagine I was sitting at a desk so close to Bill's buying power back in 1982!
What a great, great man he was. Rest in peace, William J. O'Neil and to Fay, and his children, what a loss. May Creator shine on all of you at this time.
DEAN THOMAS PARISIAN IS AN ENROLLED MEMBER OF THE WHITE EARTH INDIAN RESERVATION AND THE MINNESOTA CHIPPEWA TRIBE. HE ATTENDED 4 HIGH SCHOOLS IN 3 STATES LIVING ON INDIAN RESERVATIONS, RECEIVED AN APPOINTMENT TO THE UNITED STATES MILITARY ACADEMY AT WEST POINT, AND EARNED A BACHELORS DEGREE WITH TWO MAJORS FROM THE UNIVERSITY OF MINNESOTA-MORRIS.
DEAN PARISIAN HAS BEEN INVOLVED IN THE INVESTMENT BUSINESS SINCE 1982, HE TRAINED ON WALL STREET WITH KIDDER PEABODY & COMPANY, AND LATER JOINED DREXEL BURNHAM LAMBERT IN LAJOLLA, CALIFORNIA. PRIOR TO THE FORMATION OF NATIVE AMERICAN ADVISORS, INC. MR. PARISIAN WAS AN OFFICER IN THE TRUST AND BROKERAGE UNIT OF FIRST UNION NATIONAL BANK,ONE OF THE LARGEST BANKS IN THE NATION AND MANAGED HIS PERSONAL TRADING ACCOUNT WITH SIGNIFICANT SUCCESS..
HE IS A MEMBER OF THE PRESIDENT’S CLUB AT THE UNIVERSITY OF MINNESOTA, THE GEORGIA ORNITHOLOGICAL SOCIETY, IS A MEMBER IN GOOD STANDING OF THE ATLANTA SOCIETY OF FINANCIAL ANALYSTS AND THE ASSOCIATION OF INVESTMENT MANAGEMENT AND RESEARCH. IN ADDITION HE IS AN ARBITRATOR OF SECURITIES DISPUTES FOR THE NATIONAL ASSOCIATION OF SECURITIES DEALERS AND THE NEW YORK STOCK EXCHANGE.
HE IS MARRIED, FATHER OF TWO SONS AND IN HIS SPARE TIME ENJOYS THE OUTDOORS, SPORTS AND READING.
HIS GENERAL ADVICE TO INVESTORS IS “RULE #1 IS DON’T LOSE THE MONEY; RULE #2 IS DON’T FORGET RULE #1” AND HIS FAVORITE QUOTE IS “SUCCESS HAS NOTHING TO DO WITH MONEY, IT HAS EVERYTHING TO DO WITH HOW YOU FEEL ABOUT YOURSELF.”