David Bellairian on William O'Neil's CAN SLIM Method: Seven Factors Behind a Classic Stock-Picking Framework

By David Bellairian, Founder of Glencore Associates

William O'Neil built one of the more durable frameworks in equity investing by studying, in detail, the biggest stock winners of the twentieth century and asking what they had in common before they became winners. The result — CAN SLIM, laid out in his book How to Make Money in Stocks and taught through Investor's Business Daily, the publication O'Neil founded — is a seven-factor checklist rather than a black-box formula. I've found it useful less as a set of rules to follow mechanically, and more as a discipline for the equities piece of how Glencore Associates approaches diversification. Here's the framework, factor by factor.

C — Current quarterly earnings

O'Neil's research found that big winning stocks, almost without exception, showed strong current-quarter earnings growth before their major price moves — not modest growth, but a clear, substantial acceleration. The logic is straightforward: a stock's price is ultimately a bet on future earnings, and current earnings growth is the clearest available evidence that a company's underlying business is actually accelerating, not just its narrative.

A — Annual earnings growth

Current-quarter strength matters less if it's a one-off. O'Neil paired it with a requirement for strong annual earnings growth over recent years, to separate a genuine growth trajectory from a temporary spike caused by one good quarter or an easy prior-year comparison.

N — New products, new management, or new highs

O'Neil observed that the biggest winners typically had something genuinely new going for them — a new product, new leadership, or a new industry condition — often coinciding with the stock hitting new price highs. This runs against a common instinct: many investors are trained to think a stock at a new high is "expensive" and a stock near its lows is "cheap." O'Neil's data pointed the other way — stocks breaking out to new highs, on the right fundamentals, historically had room to keep running, while stocks lingering near lows often had a real underlying reason for it.

S — Supply and demand

This factor looks at a stock's share structure and, critically, volume. A price move on unusually high volume signals real institutional demand behind it; O'Neil treated volume as a kind of lie detector for a price move — a rally on weak volume was a much weaker signal than the same rally on volume well above average.

L — Leader or laggard

O'Neil's research pushed toward buying the leading stocks in a leading industry group, not the cheaper laggards within that same group. His reasoning was that a stock lagging its strongest peers usually has a reason for lagging, and hoping it will "catch up" is a weaker bet than owning the company already demonstrating leadership.

I — Institutional sponsorship

Individual investors alone rarely move a stock's price meaningfully — institutional buying does. O'Neil looked for evidence of increasing ownership by well-performing mutual funds and other institutional investors as a sign that sophisticated, well-resourced analysis was already backing a name, while being wary of stocks with excessive institutional ownership already, which can limit further upside from that source of demand.

M — Market direction

The final factor is the least specific to any individual stock and, in O'Neil's own assessment, the most important: the direction of the overall market. His research found that roughly three out of four stocks tend to follow the market's general trend, meaning even a well-selected stock, by the first six letters of CAN SLIM, faces a real headwind in a declining market. Reading the market's overall direction, in O'Neil's framework, comes before individual stock selection, not after.

Why I think about it this way

None of these seven factors work in isolation — O'Neil's framework is explicitly a checklist, not a single metric, and that's what I find most useful about it as a way of thinking. It's a structured way of asking whether a business is actually accelerating, whether the market is already agreeing with that view through volume and institutional buying, and whether the broader environment supports the bet at all — rather than reacting to a single headline or a single number in isolation. That kind of structured skepticism is a big part of what shapes how I evaluate the equities portion of Glencore Associates' allocation.

This article is a summary of publicly published investing frameworks by William O'Neil, offered for informational and educational purposes only. It is not investment advice, a recommendation of any specific security, or an endorsement by William O'Neil or Investor's Business Daily of Glencore Associates or any approach described here. Glencore Associates does not manage capital on behalf of outside investors and is not currently open to outside investment.

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About David Bellairian

David Bellairian is the founder of Glencore Associates, where he personally allocates capital across public equities, gold reserves, income-producing real estate, and a commercial vehicle portfolio. He is also the founder and CEO of AIDiscover, an AI-visibility and brand-discovery agency in Los Angeles. Connect with David on LinkedIn, X, or Instagram.

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Sources referenced in this article:

• William O'Neil, How to Make Money in Stocks (source material for the CAN SLIM framework)

• TraderLion, "The CAN SLIM Method Explained"

• Investor's Business Daily, background on William O'Neil and CAN SLIM