Investing rules resurfaced

A stock-picking checklist from the 1980s started circulating again this week because it still reads like a hard filter for momentum investors: buy companies with fast profit growth, buy the strongest names in the strongest groups, and get out fast when you are wrong. (x.com) The checklist traces back to William J. O’Neil, who founded William O’Neil + Company in 1963, launched Investor’s Business Daily in 1984, and built his method by studying big stock winners over decades of market history. (businesswire.com, bloomberg.com) His system is called CAN SLIM, and it was designed to find companies that are already proving themselves in sales, earnings, price action, and institutional demand instead of stocks that merely look cheap. (corporatefinanceinstitute.com, businesswire.com) The “25% earnings growth” rule is the simplest part to understand. O’Neil’s framework puts heavy weight on current quarterly earnings per share growth and annual earnings growth because he wanted businesses showing acceleration, not just stability. (investing.com, corporatefinanceinstitute.com) The “leading industry” rule is a bet on clusters. O’Neil’s own ranking system sorts industry groups, and his research tools rank those groups so investors can favor stocks swimming with the current instead of against it. (williamoneil.com) The “relative strength” rule is about price, not storytelling. O’Neil Global Advisors says its Relative Strength Rating measures a stock’s price performance over the last 12 months versus other stocks, with extra weight on the latest three months, then assigns a percentile score from 1 to 99. (oneilglobaladvisors.com) The “earnings per share rating” rule mixes several profit measures into one score. William O’Neil’s ratings page says the Earnings Per Share Rank uses the latest quarter, the prior quarter, longer-term earnings growth, and earnings stability, then places the stock on a 1-to-99 scale. (williamoneil.com) The most famous part of the whole method is the exit rule. Investor’s Business Daily’s selling checklist says to always sell if a stock falls 7% to 8% below your purchase price, which turns one bad trade into a paper cut instead of a broken arm. (investors.com) That last rule is why O’Neil’s method keeps resurfacing whenever markets get jumpy. Plenty of investors can make a buy list, but a fixed 7% to 8% loss limit forces a decision on day one, before hope, pride, or social media can talk them into staying. (investors.com, investors.com) The catch is that this is not a broad “buy good companies and wait 20 years” philosophy. It is a growth-and-momentum system built for investors willing to monitor earnings reports, industry rotation, chart action, and sell rules with almost no wiggle room. (corporatefinanceinstitute.com, williamoneil.com) That is why a decades-old checklist still spreads in 2026. In one screen, it offers a full worldview: strong numbers, strong price action, strong peers, and zero patience for losers. (x.com, investors.com)