Thank You, Mr. O’Neil

The Roman statesman and philosopher Cicero wrote, “The life of the dead is placed in the memory of the living.” This quote came into my consciousness for the first time in decades right after I learned of the death of my mentor, the great William J. “Bill” O’Neil. Businessman extraordinaire, investing genius and creator of the publication Investor’s Business Daily, Bill O’Neil died on Sunday at age 90 at his home in Santa Monica, California.

Now, why is “Mr. O’Neil” my mentor? Well, because my first real job when I got out of the U.S. Army in the early 1990s was at Investor’s Business Daily. Interestingly, at the time I didn’t really know much about stocks or investing, although philosophically I was a champion of free markets and capitalism, ideas I learned from brilliant thinkers such as Ludwig Mises, Milton Friedman, Adam Smith and Ayn Rand. Yet by happenstance, fate or just dumb luck, I was fortunate enough to begin my business career working for one of the smartest and most innovative men in the investing business, a man whose work has made countless individuals wealthy — including your editor.

Now, why do I call him “Mr. O’Neil” and not Bill O’Neil? Well, because his presence commanded respect, a respect that I will always hold for the man based on what he taught me, what he did with his life and what he did for me and so many others. I think the best way to describe Mr. O’Neil is that he was a no-B.S. straightshooter with a purpose. That purpose was to make money in the stock market, and to show others how to do the same.

Indeed, his seminal book on investing was basically named after his mission. “How to Make Money in Stocks,” first published in 1988 and revised and updated multiple times since, remains to this day the very best book on investing I’ve ever read. And if you haven’t read it, then get yourself a copy today. Subscribers to my trading services will no doubt recognize Mr. O’Neil’s DNA throughout my investing philosophy, strategy and tactics. I mean, when the man himself teaches you his strategies, how can it not?

Now, one of my proudest moments in business is when I was selected to create and write online courses teaching the investing ideas in “How to Make Money in Stocks.” I still remember the famous “education modules” as we called them, which premiered in the earliest online platforms such as America Online and CompuServe. In those days, the internet was just getting started as a place for publishers to add value to existing content. I recall arguing with some skeptical Investor’s Business Daily colleagues, including Mr. O’Neil, that the internet and online publishing would soon replace print as the dominant way to convey information. Needless to say, my prognosis proved prescient.

One thing that I always loved about Mr. O’Neil is that despite understandable skepticism regarding the future migration of his company to a predominantly online platform, he was always ready to embrace a good idea. This willingness to adapt to changing circumstances and to adopt new tools is a quality found in every really successful person I’ve ever met. I think the reason why is because recognizing the need to adapt to change is the mark of a person guided by reason, not dogma. And because man’s only tool of survival is his rational mind, the recognition of needed adaptations is always a precursor to continued success.

Mr. O’Neil proved his ability to adapt using reason in the 1960s, when he was an early adopter of computers used to analyze stock market data much more efficiently. By the mid-1970s, he was using a computer program to help pick stocks. “What we’re trying to do is take emotion completely out of the market,” Mr. O’Neil once told The New York Times.

While a reduction of emotion via identifying key metrics that make stocks go higher (e.g. earnings growth, relative price strength, industry strength, overall market conditions, chart patterns, etc.) was his goal, Mr. O’Neil never lacked emotion in his approach to success. My recollection of him was always a man driven to achieve. A man who embodied the “can do” ethos in his very being. I mean, just the way he walked, talked and looked into your eyes when he spoke with you gave one the very real sense of a man not messing around with reality. A man who was always intent on getting things done. Indeed, a man who loved the doing.

As Ayn Rand famously wrote in “The Fountainhead,” “Before you can do things for people, you must be the kind of man who can get things done. But to get things done, you must love the doing, not the secondary consequences. The work, not the people. Your own action, not any possible object of your charity.”

That is the ideal that I associate with Mr. O’Neil, and it’s one of the reasons why I consider myself most fortunate to call him my mentor.

Now, over the past couple of days, I’ve read a few good obituaries about Mr. O’Neil that dig into more details about his upbringing and his early idea formation. I recommend you read these obituaries as a way to get more acquainted with the facts of what made him who he was. Yet, obituaries always seem to fall short of the emotional imprint that a life leaves on those profoundly influenced by it.

Yet, if Cicero is right, the life of the dead is placed in the memory of the living, then Mr. O’Neil will remain alive and well within those he helped live a better life — and for those who revere men who love the doing.

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O’Neil Wisdom

 “Over-diversification is a hedge for ignorance.”

–Bill O’Neil

Mr. O’Neil was never hesitant to speak his mind. I remember one time when he addressed complaints about the editorial pages being too political. He said, and I’m paraphrasing, “If people don’t like it, they can go out and start their own newspaper. After all, it doesn’t cost much money.” That is the kind of humor and unapologetic wit he regularly demonstrated. In the quote here, he wasn’t hesitant to criticize those who argue in favor of a widely diversified investment portfolio, describing it as a “hedge for ignorance,” was one of his many caustic-yet-thoughtfully accurate observations.

Wisdom about money, investing and life can be found anywhere. If you have a good quote that you’d like me to share with your fellow readers, send it to me, along with any comments, questions and suggestions you have about my newsletters, seminars or anything else. Click here to ask Jim.

In the name of the best within us,

Jim Woods

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