William O’Neil’s CAN SLIM Approach to Selecting Growth Stocks


This week’s AAII Weekly Digest highlights these “must-read” AAII articles:


The CAN SLIM approach is a popular investment strategy that uses fundamental company and industry factors to identify attractive stocks and employs technical price and volume analysis to help determine when to buy and sell. O’Neil analyzed the 1,000 top-performing stocks from 1880 through 2009 to identify common underlying characteristics that may be used to select potential winning stocks.

Wayne A. Thorp, CFA

Certain chart patterns indicate that the current overall trend is still in place, while others signal that the major underlying trend is coming to an end and about to reverse itself. This installment of Technically Speaking highlights three chart patterns that may signal that the price trend is about to reverse: head and shoulders, double and triple bottoms & tops, and rounding bottoms.

Using Rational Value to Judge a Stock’s WorthThe term rational value is a function of a stock’s rational price, a realistic approximation of what the stock would sell for if those buying and selling it were acting rationally. It is a price that a wise investor can justify by evaluating the total return that the company might earn on his or her investment over time. And it’s based on the conventional view among fundamental investors that the price of a share, over the long term, generally tracks the underlying company’s earnings.

With the right education and information, individual investors are fully capable of becoming effective managers of their own assets. If you have the time, interest and discipline, you can manage a stock portfolio that can outperform most mutual funds.

Our Member Question for this week is:


Which would be the single best way to invest money you wouldn’t need for more than 10 years?


Vote to answer this week’s Special Question: The U.S. presidential election is on November 8. Will the outcome change your outlook on the stock market? If so, how?

Last Week’s Results:

Which income-generating products are you currently investing in or likely to invest in? Choose all that apply.


Individual Investors Reveal Their Preferred Sources of Investment Income, Return Targets

For the last several years, it has been a struggle for investors to find reliable sources of investment income. It used to be easy to earn generous income safely from your investments: Buy Treasury bonds or certificates of deposit (CDs) and simply collect the cash from them. But with interest rates at or near record lows for the last seven years, and little indication that significantly higher rates will come about for many years, income-oriented investors and retirees have had to search harder for investment income. AAII readers voted on their preferred sources of investment income as well as their target rate of return on their savings and investments.


Find Stock Ideas That Match Your Investment Personality With AAII’s Stock Screens

The purpose of AAII’s Stock Screen area is to provide you with access to a wide range of stock strategies and investment approaches. For nearly 20 years AAII has been developing, testing and tracking a variety of quantitative stock selection strategies to see what works and what doesn’t work. We update our stock screens monthly, covering over 60 stock investment strategies as well as the companies that pass each screen. Not only do we provide you with the passing companies and select data on the passing companies, there are also detailed articles discussing the rationale behind each screen to help you understand each strategy.


The AAII Weekly Digest is one of the many benefits of AAII membership. To learn more, consider a risk-free 30-day Trial AAII Membership to start becoming an effective manager of your own assets.


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