.Economic reports showed extremely low unemployment just prior to the Fed meeting, escalating concerns about inflation.
THE WALL STREET DETECTIVEThis is a web site with its own sentiment indicators. Since the entire market doesn’tmove all at once in the same direction, various sectors will be doing well whileeverything else is cratering. As previously mentioned, sector comparison is an excellent method of ferreting out useful information on specific individual stocks. Goto www.wallstdet.com for more information.
Figure 10.12
Gold Bug Index (Hourly) (Courtesy of QCharts (www.qcharts.com))
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INDEX FUTURESOn CNBC every morning before the opening bell, they show on the screen how theS&P 500 index futures are behaving. This is an indication of bullish or bearish outlooksby traders on the Chicago Mercantile Exchange (the Merc). Everything from interestrates to the price of orange juice is traded here, including futures prices of various stockindexes. The most widely watched is the S&P 500. When futures are up before theopening, (as compared to fair value), most traders look for an upward bias, at least initially. Figures 10.13 and 10.14 are near mirror images of each other. There are significant nuances, however, subtleties that index traders watch very closely. Traders willtake advantage of the disparities between the actual value of the S&P versus the futuresprices. In some cases, the futures price will influence the index price, and vice versa.On the right-hand side of the graphs you can see where the futures traded down in a 30minute period but closed that period with a gain, as illustrated by the long light-coloredcandlestick. The S&P responded, albeit a bit more conservatively. Traders eventuallytook the index higher, but only after the futures rose in advance.
FINAL COMMENTSSentiment indicators are best viewed broadly and in conjunction with one another.Just as the physician will use various tests to measure the health of a patient, so too
Figure 10.13
S&P Futures (October 2000) (Courtesy of QCharts (www.qcharts.com))
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Index futures: A futures contract is an agreement to take or make delivery of aspecific commodity on a particular date. An index futures contract is an agreement to take delivery on an index (by the buyer of the futures contract) or makedelivery of an index (by the seller) at a predetermined date. Since, unlike mostphysical commodities, there is no tangible good to take or make delivery of, index futures settle for cash.Chicago Mercantile Exchange (the Merc): Established in 1919, the CME is anorganized exchange for the trading in futures of various agricultural commodities, interest rate products, indexes, and currencies.
must the sentiment indicators be used when measuring the degree of fear and greedpresent at any particular time.While the snapshot picture will reveal certain characteristics about the market, Iget a better sense of things when I track them over a period of time. I also like to overlay these measurements with the sector I’m interested in, because I know that not allsectors rise and fall together. By utilizing sentiment analysis, you’ve given yourself athird method to assist you in making profitable investment decisions. It represents thefinal piece of the analysis puzzle and should be part of an investor’s daily review ofthe marketplace. It bridges the gap between fundamental and technical analysis.Sentiment analysis is also useful in confirming a specific stock’s trends and recognizing reversals. Since it gauges the mass psychology of the marketplace, your
Figure 10.14
S&P 500 Index (30-Minute) (Courtesy of QCharts (www.qcharts.com))
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interpretation of the findings is the key to whether you are successful. Experienceis the missing link in this picture. You may want to keep a journal detailing yourinterpretations and how they eventually pan out. Every step you take is an important lesson—especially your mistakes.
ROADMAP TO SUCCESSObjective
Course of Action
Sentiment analysisfills the gapbetween technicaland fundamentalanalysis.
Technical Analysis• No emotion involved.• No news accounts.• No fundamental influence.• 100% charts interpretation.Fundamental Analysis• Numbers-driven; financial analysis.• Almost purely subjective measurements.
Sentiment analysisfactors in thehuman elementin investing.
Emotions play a large role in the everyday market.• Fear and greed create fluctuations in supply and demand.• Herd mentality never works at the extremes of the market.–Contrarian approach assumes the crowd is alwayswrong.–Takes advantage of price swings caused by high levels offear and greed.• Measuring the market’s mood is necessary to identify theseswings.
Tools Used inSentiment Analysis
Emotions (sentiment) can be identified by observing investorbehavior as measured by how they’re investing.• Optimism measurements:–Excessive call option buying: low put/call ratio.–Volatility Index (VIX) is at the low end of its range.–The retail investor becomes very active.–Net purchases of mutual funds versus redemptions.–Low liquidity (cash) is on sidelines.–Advance/decline ratio is very strong, near historical highs.–Closed-end funds trading at a premium to their NAVs.–Technical indicators signal overbought condition.• Pessimism measurements:–Volatility Index (VIX) is at high end of its range.–Excessive put option buying: high put/call ratio.–Retail investor leaves the market.–Net redemptions of mutual funds versus purchases.–Advance/decline line is weak, near historical lows.
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–Closed-end funds trading at a discount to their NAVs.
–Technical indicators signal oversold condition.ContrarianApproach
The contrarian approach assumes the “crowd” is alwayswrong, especially at market extremes.• A strong bullish sentiment by the majority of investors is abearish signal. If everyone’s already invested, who’s left to buy?• A strong bearish sentiment by the majority of investors is abearish signal. If everyone’s already sold that’s going to selland if everyone’s already out, what’s going to cause themarket to drop further?• The crowd is usually correct in the middle of a trend. As themarket gets overbought or oversold, near-term or at the endsof a trend, the crowd will become increasingly bullish orbearish, an incorrect stance.• The majority cannot be correct. Betting against the crowd iswhat the contrarian approach calls for.
Assessing theMarket’s Mood
The Volatility Index (VIX)• Measures call and put buying in the two front months (thecurrent month and the one following).• Calculates the difference in their volumes.• This number has a typical range of between 20 and 30. Alow number (low 20s and below) indicates strong bullishsentiment; contrarian indicator—bearish implication.• High number (upper 20s and above) indicates growingbearish sentiment; contrarian indicator—bullish implication.• “When the VIX is high it’s time to buy; when the VIX is lowit’s time to go.”
Implied volatilityas a measure ofstock and indexsentiment.
Implied volatility measures the premium of an option againstwhat it should be trading at. (Based on the Black-Scholes modelof options pricing.)• Three dimensions of an option (how it is valued by themarket):–Price of the underlying stock.–The time remaining in the contract itself.–The implied volatility (IV) of the option.• The demand (or lack thereof) causes the IV to fluctuate invalue.• Compare the IV to its historical range (historical volatility).• A high IV indicates high premium is in the option pricing dueto high demand (greed or fear is growing). IV is notsustainable.• A low IV indicates low demand, indifference.• A below-average or above-average IV will eventually correctitself; the emotional aspects of its price will return to a morebalanced level.• Buy low IV, sell high IV!
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Published sentiment Investor’s Business Daily lists a number of indicators daily in(psychological)the “General Markets and Sectors” section (located at the backindicators indicate of the first section).daily and/or• Public/NYSE Specialist Short Sales: Research indicatesweekly fluctuationsspecialists to be accurate barometers of future marketin the mooddirection.of the market.–When ratio is high ( >.6) (specialists not short selling),market likely to move higher.–When ratio is low (<.35) (specialists short selling), marketlikely to move lower.• Ratio of Price Premiums in Puts versus Calls: The higherthe premium (IV) the higher the greed (or fear). Look for atrend.• Mutual Fund Share Purchases/Redemptions: The morepurchases, the more cash mutual fund managers have towork with. A number that drops means people are pullingcash out of the market and is a bearish sign. Contraryindicators are when the ratio is extremely low (majority ofinvestors want out, period) is a good time to put cash towork.• Nasdaq Daily Trading Volume as % of NYSE Daily Volume:The OTC (Nasdaq) used to be referred to as the secondarymarket, because it was comprised more of lower-cap issuesthat moved after the NYSE and AMEX had climbed. Not soanymore. Questionable ratio these days.• Number of Stock Splits in Investor’s Business Daily 6,000(prior 30 days): The higher the market, the more stocksplits is the basic premise behind this reading. More splitsamounts to greater supply, but if the demand doesn’t keeppace, this is a bearish condition. Not always a reliable oneeither.• New Issues in Last Year as % of All Stocks on NYSE: A hotnew issue market usually goes with a more speculativeenvironment, which is often associated with a market top.• Price-to-Book Value of Dow Jones Industrial Average and thePrice to Earnings (P/E) Ratio of Dow Jones IndustrialAverage:These two fundamental methods for stock valuation arebest taken in a historical perspective. When these readingsare at relatively high levels, the fundamentalist sees this asan overpriced market, another signal of a pendingcorrection/bear market. Low readings, of course indicatefire-sale prices.• Current Dividend Yield of Dow Jones Industrial Average: Alow current dividend yield equates to a high stock price . Ahigh dividend yield means the stock price (the divisor in theequation) is low.
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Graphic Displaysof PsychologicalIndicators in IBD.
• % of Investment Advisors Bullish or Bearish: These indicatorsare derived from a poll taken by Investors Intelligence, aNew Rochelle, New York–based advisory service thatpublishes a newsletter that surveys 130 advisory firms andthen publishes the results. They discovered that mostadvisory firms are wrong (when measured as a group) due tothe fact that they’re trend followers. They precede themarket, and are considered to be leading indicators.–Bullish chart: Above 55% = Bearish; below 35% = Bullish–Bearish chart: Above 50% = Bullish; below 20% = Bullish• Short Interest Ratio: This represents short interest ascompared (percentage-wise) to total volume of all exchanges.Look for the trend in this percentage. Increasing percentagesis a bullish indicator, as fear is rising. A move up by themarket would create a short squeeze. Rising prices wouldforce the short sellers to buy their stock back, pushing stockseven higher.• Odd-Lot Short Sellers: This is the ratio of short sells by oddlotters to total odd lot volume. (Odd lot is less than 100shares, and is an indication of the retail investor.) Odd-lotactivity is a very reliable contrary indicator due to theirknack for selling at the bottom and buying at the top.
Put/Call Ratios
Measures the difference between put and call buyers.• When put buying becomes rampant, the majority of peopleare convinced the stock or index is heading lower; theopposite is true if call buying is increasing.• The put/call ratio is a beacon that alerts the astute trader tosentiment extremes, the concentrations of buyers doing thewrong thing.• The further the OEX put/call ratio is below 1.00, the morebearish it is; between 1.00 and 1.25 is neutral, and above1.25 is bullish.• The CBOE lists these numbers (www.cboe.com). The WallStreet Journal, IBD, and Barron’s are good sources.
Mutual Fund Salesand Redemptions
The more purchases the more cash mutual fund managershave to work with. A number that drops means people arepulling cash out of the market and is a bearish sign. Contraryindicators are when the ratio is extremely low (majority ofinvestors want out, period), is a good time to put cash towork.
Advance/Decline Ratio
Shows the number of advancing (gaining in value) stocks versusthe number of declining issues.• A strong (positive) number is a good indicator a rally is solid.• A weak number in an advancing market means theadvance is limited in its breadth, and the rally is thereforesuspect.
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SENTIMENT ANALYSIS ESSENTIALS• A declining market with a lopsided A/D line (morenegatives than positive) means there is a widespreadretracement in prices occurring, and signals overallweakness in the market.• A number that’s almost even shows that bears and bulls arenearly even—a sign of a choppy (trendless) market.
Rampart TimeIndex
This indicator (a regular feature in Barron’s) is indicated twoways:• The Composite Call Index: The higher the number the greaterthe optimism. The higher the number the more bearish thesignal.• The Composite Put Index: The higher the number the greaterthe pessimism. The higher the number the more bullish thesignal.
Closed-End FundIndicator
An excellent barometer of the retail investor’s sentiment. It is acontrary indicator.• A premium to the NAV signals optimism, and is a bearishsignal.• A discount to the NAV signals pessimism, and is bullish.
The Media
This is a difficult indicator to assess. Listening to the content ofthe media (print and broadcast) can help you ascertain themood of the public at large. This is a tenet in Dow Theory, andsignals a top or bottom, depending on whether the tone isoptimistic or pessimistic, respectively.
News Events
An adverse event or announcement can cause an overreactionin the market, sending a stock abnormally high or low. Carefullyevaluating the real impact on the long-term prospects of theevent/announcement can sometimes indicate a good buying (orshorting) opportunity. Various option strategies that assume acontrary stance can take advantage of a return to reason by themarket.
Volume
This is best summed up by stating: “Volume precedes price.”• Volume can indicate a shift in sentiment, even without aprice movement, as insiders and astute investors begin toeither accumulate or distribute stock.• If volume accompanies a big move up or down, there isconviction being shown and it should be followed by theinvestor; “don’t fight the tape.”• Rising prices and decreasing volumes indicates a lack ofconviction; weak conviction.• Receding prices with decreasing volumes indicates a lack ofsellers; a good time to buy at the dips.• Volume should increase with prices to confirm advance.• If volume increases with a retracement, it is a sign of furtherweakness.
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Capitulation
The last remaining bull has thrown in the towel. Capitulation isthe hallmark of investor resignation, when pessimism and fearare at their highest.• A good sign of a bottom in a bear market.• Tough to see clearly in a bull market.• Short covering?• Not as dramatic as a major sell-off.
ComparisonIndicators
There are a number of indicators sites and techniques thatutilize the power of comparison to unveil the strengths andweaknesses of various stocks or economic shifts.• Gold Prices—Gold rises in price when uncertainty and fearincrease. Wars, inflation, political events can all send goldhigher. The CBOE has gold index options ($GOX).• Index Futures—Commodity and futures traders actuallymake a market for the future value of various indexes. Totrack these, head to the Chicago Mercantile Exchange(www.cme.com). Futures are an excellent way to watchemotions, as they are swayed intraday by news events and soon.
Useful Web Sites
ICEFI Market Sentiment Indicator:(www.linkindia.com/icefi/index.htm)This web site provides a background of sentiment analysis aswell as their proprietary model that utilizes closed-end funds asan indicator.American Association of Individual Investors:(www.aaii.com) Content on this site deals with “BehavioralFinance” including:• Overconfidence• Fear of Regret• Myopic Risk AversionQuick Term Timing: (qtt.com) Uses sentiment analysis in shortterm trading. Caveat Emptor.The Wall Street Detective: (www.wallstdet.com) Joe Duarte hasput together a nice site for sentiment analysis, and will send youdaily updates via e-mail, using his own models. The price isright too.Investor’s Business Daily: (investors.com) IBD provides thegreatest psychological indicators in their daily paper, but as ofthis writing, they do not provide it online. Worth a serious look.Optionetics.com Platinum: (optionsanalysis.com) For optionprices, the measurement of implied volatility (IV) is atremendous tool for measuring the “expectation” of pricemovement. This site offers a multitude of option tools, volatilitycharts, and helpful portfolio management.
11Studying the Masters
One of the most important things I learned at the Harvard Business School was howto attack a problem when I knew very little about the subject. This ability has servedme well, especially when I first decided to try my luck as an investor. My first taskwas to read as much as I could about the greatest investors and businessmen of alltime. Just as each civilization builds upon the mistakes and triumphs of past empires, I knew that I needed to trace the footsteps of these innovative tycoons. Exactly how had they climbed the ladders to success? What kind of approach did theyuse to divine order in the investment universe?I can honestly say that it was well worth the many hours I spent in the library reading their books and studying their accomplishments. Each historical figure providedan important piece of the puzzle. However, since time is of the essence and in incredibly short supply these days, what follows is a brief synopsis of some of the brighteststars in the evolution of the markets and the most prominent business-people and industrialists. This list is not meant in any way to be comprehensive. It is simply a list ofsome of the most successful role models and effective teachers in the business. I hopethat they will give you additional insights into what it takes to learn how to trade profitably and spot rising stars in the business world.
MARKET MAGICIANS
Benjamin GrahamLondon born, Graham graduated from Columbia University with a B.S. in 1914and immediately began a career on Wall Street as a messenger for a brokeragefirm. Within five years, he was made a partner of the firm earning a six-digityearly salary. In 1926, he teamed up with Jerome Newman to create a successful322
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investment partnership. Three years later, Graham lost most of his fortune in thestock market crash of 1929.Although the investment partnership of Graham-Newman survived, he returnedto the halls of Columbia University to be a professor. With help from colleagueDavid Dodd, Graham completed the first edition of Security Analysis in 1934—nowconsidered the bible of fundamental analysis. Two-thirds of a century and five editions later, Graham’s timeless wisdom still commands attention and attracts a loyalfollowing among investors worldwide.Considered the pioneer of fundamental analysis, Graham ismost remembered as the author of two very important books,Security Analysis (1934) and The Intelligent Investor (1949).
Graham began by clearly defining the word investment and setting it apart fromthe word speculative. To this end, Graham wrote, “An investment operation is onewhich, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative.” (Benjamim Graham and David Dodd, Security Analysis, McGraw-Hill, 1934.) This definitionenabled Graham to include stocks in the category of investments, a category formerly thought to be the primary domain of bonds. Graham worked to empower hisstudents and clients by teaching them a systematic approach to finding undervaluedstocks and bonds through quantitative analysis. In short, Security Analysis was thefirst book to advocate a system for the useful analysis of quantitative factors to methodically select a diverse portfolio of investment instruments.Diversification is also one of Graham’s major doctrines. Graham thought that allstocks have a similar life cycle composed of four basic stages:1. Development: In the earliest stages, increased sales lead to accelerated earnings. These earnings are systematically reinvested into the company to promote growth.2. Expansion: The company grows in leaps and bounds while increasing profitsand earnings simultaneously. The sky’s the limit.3. Maturity: Revenues stabilize and expansion hits a plateau.4. Decline: Revenues decline and the company’s profits and earning start to diminish. Jump ship.Although buying a stock in its rapid-expansion phase is the most favorable timeto invest, Graham noted that determining exactly where a stock is in its life cyclecan be quite difficult. In addition, the price of a stock can be pumped up when earnings and profits run high, slowing its continued growth. Instead, Graham advocateda systematic approach for finding stocks that are selling below their intrinsic value.He encouraged investors to analyze a variety of factors including earnings, dividends, net worth, and future prospects to determine a company’s intrinsic value.Graham argued that if the gap between the stock’s price and the company’s intrinsic
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value were large enough, this margin of safety would preclude the stock from unexpected losses.Finally, Graham eschewed market optimism because he believed it allowed human emotions to enter the market decision-making process. Graham sought to keephimself beyond the emotions of greed and fear by arming himself with the facts andfollowing a systematic analysis of a stock’s accomplishments. I admire his tenacity.
Philip FisherAfter graduating from Stanford University in the early 1920s, Philip Fisher began hisillustrious investment career as a bank analyst. In 1931, he became his own boss atFisher & Company, an investment-counseling firm he owned and operated. Fisherknew that for a company to succeed, it had to grow by manufacturing products, orthrough providing services that would serve the needs of consumers into the decadesahead. In other words, it had to be ready and able to change with the times. To this end,Fisher avidly watched a company’s management team and questioned their integrityand style. He reviewed how the company passed on difficult information to shareholders, how they treated employees, and their turnover rate. He also found it important tocompare different companies in the same industry. He valued a company’s idiosyncrasies because those factors often made one company stand out from the others.Fisher was a great believer in the qualitative analysis of companies over thelong term, and this became the mainstay of his investment approach. Helooked for investments that could maintain higher growth levels than industryaverages and honed his ability to size up a stock’s capacity to reproduce cash.
Fisher believed that you had to immerse yourself in as much information as youcould find out about a company to be able to judge it as a possible stock investment.But listening to what a company had to say about itself wasn’t enough. Fisher alsopaid attention to what the Street had to say about a company. He viewed gossip, rumors, and personal opinions to be an integral part of a stock’s character. Fisherknew that a stock’s propensity to make or break it on Wall Street was the culmination of a multitude of variables. So although it took an incredible amount of timeand energy to complete a thorough investigation of a company, Fisher believed itworthwhile since most of his investments were long-term in nature.
Warren BuffettAs a student at Columbia’s Graduate School of Business, Warren Buffett studiedunder Benjamin Graham. In 1954, Buffett joined Graham’s investment firm and became deeply engrossed in Graham’s investing techniques. When Graham retired in1956, Buffett returned to his hometown in Omaha, Nebraska. In 1957, his friendsand family invested $105,000 in his investment limited partnership. It blossomedinto a billion-dollar empire. If a person had invested $10,000 when Buffett began
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his career in 1956, and had kept that original amount invested, that person wouldhave been a millionaire by the mid-1990s.Generally, Buffett risked his capital on the long-term growth of a few select businesses and stuck with those investments through thick and thin. Additionally, it is wellknown that Buffett avoided the use of leverage, futures, dynamic hedging, modernportfolio analysis, and other convoluted, theoretical models acclaimed by academics.Instead, Buffett drew on his character and his ability to make decisions that were opposite of the prevailing opinion at the time. His patience, discipline, and rationalthinking are what separated him from others in the industry, and are certainly qualitiesthat an individual needs to possess in order to succeed in the investment arena.Buffett’s secret to success was a long-term philosophy groundedin buying stock in companies that were undervalued andhanging on to those companies until their hidden value was realized.
Focusing on buying interests in public and private companies, Buffett purchased acontrolling interest in a textile company called Berkshire Hathaway in 1962. Eventually, Buffett became the chairman of the company and worked to reinvent the textilemanufacturer into a well-diversified, thriving enterprise that deployed its excess capitalinto different businesses. Following his long-term value philosophy, Buffett searchedfor and investigated companies that showed potential for long-term appreciation thatwould help to increase the return on investment of Berkshire Hathaway. The first outside interest that Berkshire Hathaway ventured into was the insurance business, and theup-front cash generation of this business made it very lucrative at the time. Additionally, Berkshire became involved with and plowed capital into the banking and publishing industries. These additional businesses helped to create a diversified company thathad significant cash flow and the potential for incredible growth. The rest is history.
Charles SchwabCharles Schwab started investing in 1957, and in 1974 he became a pioneer in thediscount brokerage business. He had the vision to provide average Americans withinformation, investment tools, and easy, low-cost access to the stock market. TodayCharles Schwab & Company is the nation’s largest discount brokerage firm. Mr.Schwab has recently been selected by Money Magazine as one of the seven peoplewho most influence the United States economy.There are a couple of fundamental beliefs that have driven Charles Schwab in hispersonal investing as well as given him the vision to create the largest discount brokerage firm. First, he feels that individuals have the ability to take control of their financial future, and that investing should be a regular part of every household’sroutine. This stems from the fact that Mr. Schwab feels that no one is going to bemore concerned about a person’s financial well-being than that individual person.Secondly, Schwab believes that investing is a long-term process that takes time todevelop and mature. Therefore, it is critical for the individual to begin that process
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as soon as possible through investing in common stocks. Over time, stocks haveoutperformed all other kinds of investments, including bonds, CDs, and U.S. government securities. Schwab feels that of all the many investments that are available,stocks provide the best opportunity for growth over time, and they are the instruments of choice for the long-term investor.Schwab’s vision was to provide the common person withaccess to the moneymaking power of the stock market. Hiscommitment to this vision made his brokerage firm thestandard of excellence in the discount brokerage industry.
The primary reason that Schwab has such a passion for common stock is thatthere is no other investment vehicle that has the desire to grow like a company, andwhen an investor purchases the common shares of a company, they are buying directly into that company’s growth. He feels that this relationship is unique to equities. It is something that each individual has the ability to benefit from and shouldtake advantage of.
Peter LynchPeter Lynch is known for taking a simple approach to investing and finding companies that have the ability to provide superior returns over time. His method is to findcompanies whose products he knows and understands. He starts out by looking atcompanies with products the average person uses on a daily basis. Additionally, it isimportant to understand the economic climate in which these companies are operating. Lynch believes in knowing and comprehending the story behind the company.It’s not enough just to track the price of the stock. He thinks investors need to feelcomfortable with the companies in their portfolios, truly believing in what they doand/or make. It’s simple: If you don’t fully know the story behind your investment,then it is more likely you’ll be shaken out of a great investment during market corrections. This, in turn, can cause you to miss an opportunity to purchase moreshares when the price is low, and the company’s doing just fine.Frequently called the #1 money manager of all time, Peter Lynch is the formermanager of the Fidelity Magellan Fund and the coauthor of One Up on WallStreet and Beating the Street. Under Lynch's management, The Magellan Fundwent from 20 million in 1977 to 14 billion by his retirement in 1990.
Mr. Lynch believes investors should be in for the long haul and avoid trying totime the market. Most people who attempt to time the market fail; they are buyingwhen the market is about to drop and selling when the market is putting in a bottom.There was a study done found that illustrates the importance of always being invested in the market. During the years from 1963 to 1993, the market provided anaverage return on 11.83%. However, if you were not invested during the 10 best daysduring that period, then your return dropped to 10.17%. If you weren’t invested for
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the best 30 days, then your return decreased to 8%; and lastly, if you were not invested for the best 90 days, then your return fell to 3.28%. Lynch believes that thetrue way to generate great wealth is to start saving and investing at a young age ingood, quality companies and sticking with them through tough market environments.
William O’NeilIt has been said by many that William J. O’Neil, founder of the Investor’s BusinessDaily newspaper, has done more to help the individual investor succeed and prosperthan any other market guru in the investment community. His main objective was toteach ordinary people how the American economy and market really work, and explain in basic terms how investors can materially benefit.Mr. O’Neil is the model growth stock investor. His investment philosophy is to invest in thriving companies that are developing and creating new products, new