Maria Irene

In the world of finance, few strategies evoke as much controversy as short-selling. Often vilified for its perceived role in market crashes, short-selling is nevertheless an essential component of a healthy financial market. In their groundbreaking book, “Short-Selling with the O’Neil Disciples: Turn to the Dark Side of Trading,” Gil Morales and Chris Kacher offer a detailed, actionable guide to mastering this often misunderstood investment strategy.

Morales and Kacher, both seasoned traders and disciples of legendary investor William J. O’Neil, are well-qualified to lead readers through the intricacies of short-selling. With a combined experience of over four decades in the market, they have developed a comprehensive system based on O’Neil’s principles. They teach readers how to identify stocks with the highest likelihood of a downward spiral and provide clear guidelines on when to enter and exit positions.

The book begins with a primer on short-selling, defining terms and concepts that will be familiar to experienced investors but may be new to those just entering the field. Morales and Kacher also emphasize the importance of understanding the risks inherent in short-selling and the need for careful risk management. They outline the regulatory environment surrounding short-selling and provide a historical perspective on its role in market crashes.

The core of “Short-Selling with the O’Neil Disciples” focuses on the authors’ trading system, which is based on a combination of fundamental and technical analysis. They provide an in-depth look at key fundamental factors that can signal a stock’s vulnerability, such as deteriorating earnings, high debt levels, and negative industry trends. The authors also introduce a set of technical indicators that can help identify when a stock is poised for a decline.

In addition to the trading system, Morales and Kacher offer a wealth of practical advice for managing a short-selling portfolio. They emphasize the importance of proper position sizing, taking into account factors such as volatility, liquidity, and risk tolerance. They also offer guidelines on how to manage positions in the face of a market rally or an unexpected reversal, as well as techniques for hedging against potential losses.

“Short-Selling with the O’Neil Disciples” is not just a theoretical treatise on short-selling. The authors provide numerous real-world examples, including case studies that illustrate the effectiveness of their trading system. The book also includes interviews with successful short-sellers, offering readers a glimpse into the mindset and techniques of those who have made a career out of profiting from stock declines.

For those looking to expand their trading toolbox and tap into the potential rewards of short-selling, “Short-Selling with the O’Neil Disciples: Turn to the Dark Side of Trading” is an invaluable resource. Morales and Kacher’s clear, systematic approach, coupled with their wealth of experience, make this book a must-read for investors seeking to master the art of short-selling.

For readers interested in further exploring the topic of short-selling, the following reading list offers a variety of perspectives and approaches:

  1. “The Art of Short Selling” by Kathryn F. Staley – This classic book provides a comprehensive introduction to short-selling, including how to analyze companies for short-sale potential and manage the risks associated with this strategy.
  2. “How to Make Money Selling Stocks Short” by William J. O’Neil and Gil Morales – O’Neil and Morales offer their insights into short-selling based on their extensive experience in the market, including advice on how to identify weak stocks and time entry and exit points.
  3. “A Short Course in Short Sales: Mastering the Art of the Short Sale” by Regina L. Pitaro – Pitaro covers the basics of short-selling and offers practical advice.


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