This Tuesday marks the one-year anniversary since William O'Neil, a successful investment broker who started his own equity research firm and brokerage serving hundreds of institutional investors before later creating Investor's Business Daily in 1984, died at the age of 90.
William O'Neil's son Scott confirmed that the Oklahoma native, former member of the U.S. Air Force and longtime Los Angeles resident passed Sunday morning, May 28, 2023, amid the Memorial Day weekend.
A child during the Dust Bowl days of the Great Depression, William O'Neil (1933-2023) rose from humble beginnings to graduate from Southern Methodist University in Dallas, serve as procurement manager of two military bases in Fairbanks, Alaska, during the Cold War, and eventually transition into the financial industry as a retail-level broker at Hayden Stone in Los Angeles.
William O'Neil: True Market Wizard
The early 1960s were a pivotal time in O'Neil's career. He posted superior gains in the stock market in 1962 by concentrating his profits in just a few stocks, including automaker Chrysler and birth control pill maker Syntex, as well as a successful short sale of discount department store chain Korvette, a former big stock market winner at the time.
A year later in 1963, O'Neil at age 30 became the youngest person to buy a seat on the New York Stock Exchange. Later, Jack Schwager profiled O'Neil in his 1988 book "Market Wizards."
"He's a gentleman who, I'm afraid, we're losing more and more these days," David Ryan said during a tribute on IBD Live's Tuesday show. Ryan, a three-time U.S. Investing Championships winner, worked for O'Neil as a portfolio manager from 1982 until the mid-1990s.
To friends and many employees who worked at one of William O'Neil's firms, he was best known as Bill. For many years, Bill O'Neil kept a modest office right outside the IBD newsroom and chatted with staffers on a near-daily basis.
O'Neil's surviving family members will hold a private memorial service. Several of O'Neil's children and grandchildren continue to work at the O'Neil family of enterprises.
William O'Neil: Live With Purpose, Learn From The Best
Early Days: From Oklahoma To Dallas
"We continue his mantra of create, not copy," Scott O'Neil, executive chair of William O'Neil & Co. and former publisher of Investor's Business Daily, told IBD.
Scott noted his father first attended grade school on a Native American reservation, not far from his family's early home of Muskogee, Okla. William O'Neil's mother later took the family to Dallas, where he eventually graduated from Southern Methodist University with a business degree.
"He had seen extreme poverty. To support the family my father started work by taking multiple newspaper delivery routes," Scott O'Neil said. "I believe he came to the conclusion, I am never going to live like that again. Later, Bill always told all of us, do not carry debt in your business. Our chief financial officer Don Drake also said Bill repeatedly told him of the dangers of debt."
Decades later, William O'Neil established an undergraduate scholarship program in journalism at SMU. One of its earliest scholarship recipients, Ali Coram, now serves as executive director of video content at IBD and as chief host of a daily show on growth investing, IBD Live.
"On my first day on the job at IBD, Bill gave me this advice, "Always do more than they expect," Coram said on Tuesday's show. "He didn't have to tell me. By then I felt that I was going to always give my all."
On IBD Live: Portfolio Managers, IBD Staffers Share Memories Of Bill O'Neil
William O'Neil: Believe In America
In the 1980s, David Ryan assisted O'Neil in running the New USA growth-focused mutual fund. He traveled with O'Neil and gave more than 150 all-day workshops around the country to teach the principles of successful investing in growth stocks. Crystallized into a seven-point paradigm known as CAN SLIM, O'Neil's investment method benefited and influenced both professional and individual investors. CAN SLIM emanated from decades of research on the biggest stock market winners.
O'Neil liked to say that CAN SLIM was not his own personal method but simply what the market teaches those who wish to pick and profit from game-changing stocks.
When O'Neil and Ryan held the workshops across the U.S., "He would always remind the audience that this was the greatest country in the world with tremendous opportunity," Ryan said. "He was always encouraging and challenged everyone that if you put in the hard work, you could improve your investing results. He taught me that details are so important, and are the difference between just ordinary and outstanding."
William O'Neil's father abandoned the household when Bill was a young boy. Bill grew up among strong women in his life. These family members pushed him to work hard and succeed. As O'Neil formed new companies in the 1960s through 1980s, he made a point of hiring able women alongside men as division managers.
"Bill was extremely ethical," Ryan said. "He never cut corners. He always did things the right way."
WJO: His Vision, Work And Legacy
Tireless Innovator
The idea of creating a newspaper that would compete with the grand dame of U.S. business journalism, the Wall Street Journal, went into motion during a flight with company executives from a business trip.
William O'Neil had built a thriving printing firm, O'Neil Data Systems, in 1973 in West Los Angeles. He quickly gained a reputation for delivering large-format chart books to clients in the fields of mutual funds, insurance, pension plans and large investment advisors. O'Neil called the thick, maroon-colored books Datagraphs. The firm shipped them over the weekend to hundreds of clients every week.
Later, O'Neil launched an online research tool called WONDA — which stood for William O'Neil Dynamic Access — providing a comprehensive view of the stock market, industry groups and individual stocks.
William O'Neil also gained a reputation for being among the first in the industry to use a mainframe computer and other cutting-edge technology at the time to build a database rich with fundamental and technical data on U.S. stocks. He revolutionized research by creating easy-to-use rankings, such as the Earnings Per Share Rating, to score companies on their earnings and sales growth, profit margins and other key data.
Another innovation by O'Neil: creating the Relative Strength Rating, which quickly alerted IBD readers to which stocks ranked the best in terms of 12-month price performance. O'Neil's major discovery? The biggest winners already had a record of market outperformance before they began their game-changing — and potentially life-changing — rallies.
Who Exactly Is William O'Neil?
Creating Stock Ratings That Changed The Game
The RS Rating goes from 1 (the worst) to 99 (the best). A stock with a 98 score means that it's stronger than 98% of all companies in the IBD database.
"The RS Rating of a potential winning stock should be in the same league as a pitcher's fastball," O'Neil, a fan of baseball and basketball, wrote in the fourth edition of his bestseller "How to Make Money in Stocks." "The average big-league fastball is clocked at 86 miles per hour, and the best pitchers throw 'heat' in the 90s."
O'Neil did the same by analyzing the performance of 197 industry groups across multiple time frames. His process has been imitated by equity research firms, banks and portfolio managers in the ensuing decades.
This combination of a successful printing firm and a unique quantitatively driven database on stocks led to the first publication of Investor's Daily, as it was then called, on April 9, 1984. Investor's Business Daily later became a weekly print newspaper in 2016. The company focused even more on its digital properties, notably Investors.com and MarketSmith.
New online-only products — such as Leaderboard, SwingTrader, IBD Live and MarketDiem — have also launched in recent years.
In learning from great fund managers in the past, including Jack Dreyfus of the Dreyfus funds, O'Neil also changed the game of investing by providing data on the quantity and quality of institutional ownership in the best stocks.
This perspective, reported throughout his Datagraphs product and later through unique IBD ratings including the Accumulation/Distribution Rating, is known as the I in CAN SLIM, which stands for institutional ownership.
William O'Neil: This Is Still The Golden Rule Of Investing
A New Owner And Chapter In IBD
"Has there ever been another successful investor who gave so much to others, who shared the details of how he did it?" Chris Gessel, chief content officer of IBD, said on Tuesday's IBD Live show. Asked why O'Neil has commanded respect and decades-long loyalty among employees, customers and fellow investment pros, Gessel added that "Part of it was he was a totally great guy."
At its peak, IBD carried a paid subscription rate that approached 300,000. O'Neil famously published that piece of data above the masthead on the front page of the two-section newspaper.
In May 2021, IBD was acquired by WSJ parent News Corp. for $275 million. At the time, IBD garnered more than 100,000 paying subscribers. During the 2020 Covid pandemic, Investors.com at one point achieved a milestone of posting 25 million article page views per month.
Analysts noted that the transaction, on a per-employee basis, topped Japan financial news powerhouse Nihon Keizai Shimbun's acquisition of the Financial Times.
O'Neil retired from his leadership roles at IBD, O'Neil Data Systems (now known as O'Neil Data Solutions) and several other companies providing institutional equity research and trading services to clients worldwide, in 2016.
Additional Achievements Of William O'Neil:
- Named among Top 100 Business Luminaries of the Century by TJFR Group and Mastercard.
- Received the Classic Award of Recognition from high-tech industry association AeA in 2002.
- Stock Trader's Almanac, 37th edition named in O'Neil's honor in 2004.
- Won the Spirit of Lincoln Award from the Lincoln Club of Los Angeles, 2005.
- Authored 1st edition of "How to Make Money in Stocks: A Winning System in Good Times Or Bad" in 1988.
- Wrote "The Successful Investor" in 2004 and "24 Essential Lessons for Investing Success" in 2000.
- Given the Lifetime Achievement Award from the Chartered Market Technicians Association in 2020.
Note: This article was first published on May 30, 2023. Please follow Chung on Twitter: @saitochung and @IBD_DChung
