Book Description
Using Investor's Business Daily as his major source of investment information, Dhun Sethna tripled his portfolio in five years. In Investing Smart, Sethna shares what he's learned about picking stocks with the nation's fastest growing newspaper, unlocking the powerful money=making information in every edition.
You'll discover where to look for winning stocks every day. . .which indicators to watch to avoid losses. . .the psychology of market behavior. . .and much more. The book delivers straightforward explanations of the complex and powerful forces which drive stock prices. All in all, it gives you the tools you need to invest wisely.
Download Description
Written by a man who tripled his market holdings in five years through careful application of information in "Investor's Business Daily", this guide shows investors how to maximize the value of the paper's many features to reach their market objectives.
Customer Reviews:
Bad presentation.......2007-09-21
I was very excited to find a book that was going to give me more ideas on how to pick stocks using IBD. While this book did give information on IBD, it never got into anything I found helpful in really using to pick stocks. All the author did was present information I already knew by reading IBD myself. Also this was not a pure IBD product the author attempted to mix in several authors advice and techniques into this work by quoting them verbatim. The book was very dry and hard to read and I do not think beginners or veteran traders will find it helpful. It was written by a doctor, who may be a great trader, but I did not like his writing style. I would advise reading all of William O'Neal's book and stick with IBD alone to teach you. Find your stock picks in the IBD 100, you do not need this book.
This book sucks.........2004-03-07
I bought this book a year and a half or so ago and I think it was a bad investment. I figured this book would be a great addition to How to make money in stocks but I was wrong.
This book is basically scanned in pages of parts of the paper telling you about all the economic indicators and other items in Investor's Business Daily.
I feel this book could have been a lot better if Dhun Sethna hadn't spent most of his time talking about such a boring subject... I mean who really wants to interpret economics graphs... I know I don't. He could have discuss how to find the winners (like the title suggests) but from what I remember about this book it is just about what the paper is and all the economic indicators you can find in it. I can clearly see why William O'Neil doesn't recommend this book.
Reed Floren
Its not completely worthless............2001-12-30
I did not read the book but I did look it over carefully. I was hoping it would be a clear step by step guide to using IBD to apply the CANSLIM method. There is so much information in the paper that it is not easy to apply all the techniques in an efficient manner. There are almost too many choices and directions possible. This book is not a step by step guide nor is it all that clear. I did find it to be unnecessarily wordy and vague. It just seems to go over the whole paper in a long winded fashion but does not get down to the nuts and bolts of "Smart Investing" as I was hoping it would. Refer to William O'Neil's books for better guidance about how to invest. Also, if you are a subscriber, there is a large amount of useful information on the IBD website at Investors.com.
Long Winded-But Necessary.......2001-04-22
If you are totally new to investing then you should start with "24 Essential Lessons to Investment Success" & "How to make Money in stocks", both by William O'Neil. If after reading those books part of the Investment Business Daily newspaper makes no sense, I recommend this book. Once you feel successful and comfortable in the stocks you pick, you would want to understand the whole picture. Though this book will confuse you in the beginning and I agree with many of the reviews, remember it is a brake down of the newpaper and how you can use each part of it to understand everything of the market and how Investment Business Daily feeds you that information. I strongly recommend it. Puts together the Big Market picture from the pages of the Investors Business Daily paper. It should glue together some loose ends.
Miguel-Bronx New York
Too Many Words, Too Little Information.......2001-04-18
Being a student of William O'Neil's CANSLIM method of stock selection I found this book tiresome to read mainly because I know the subject matter so well. Dr. Sethna was certainly long winded and rambling in his writing style and could have said what he did in a third of the space he used. If you desire to learn about William O'Neil's methods purchase his book, "How to Make Money In Stocks." Lastly, Investor's Business Daily has added many new features since Dr. Sethna wrote this book so some of the information he shares about the paper is dated.
Book Description
Praise for Be Smart, Act Fast, Get Rich
"Charles Payne's book is blunt, provocative, and right on the money. This book is a lot like Charles himself: insightful and to the point. If you have time to read only one book on how to make money . . . this is the book."
--Dr. Bob Froehlich, Chairman, Investor Strategy Committee Deutsche Asset Management, and Vice Chairman, DWS Scudder
"Be Smart, Act Fast, Get Rich is a book for all investors from first-time stock buyers to seasoned investors. 'Be Smart' suggests you understand the fundamentals of the company you are purchasing. 'Act Fast' suggests that action must be taken if you are going to increase your wealth in the stock market. All too often we find interesting ideas to invest in but never have the confidence to act, only to watch the stock's price rise while others reap the benefits. This book is an easy read, and a must-read for all investors."
--Tom Dorsey, President, Dorsey Wright & Associates and author, Point & Figure Charting
"You should buy this book just for the super job Charles does in explaining everything you need to know about charts, graphs, and the other 'voodoo' of technical analysis that he makes so simple to understand. Charles really gives you a street fighter's education in the markets . . . I wish his book was around twenty-five years ago . . . it would have saved me millions in market mistakes I've made."
--Tobin Smith, founder and Chairman, ChangeWave Research
Customer Reviews:
BE SMART, ACT FAST, GET RICH.......2007-10-01
Countless times my friends and I would repeat the phrase "If we only had stock in a particular "hot" product that we would be rich." And sadly, not one of us has ever taken the initiative to find out how to actually get into the stock market because we thought only the wealthy could afford the risk of investing.
The author, Charles V. Payne, clearly wants folks to stop making the "fat cats" richer off our spending trends and learn how the stock market works by understanding the concept, the language, and game strategies to enrich our lives and reap those benefits. He "keeps it simple" and "keeps it real" in his thoroughly written, knowledgeable, and witty book, "Be Smart, Act Fast, Get Rich.". It's a winner.
The only way one can get in the stock market game is to play. And why not learn from one of the truly successful men on Wall Street, who hailed from humble beginnings. Throughout his book, as one turns and reads the pages, you can feel his tenacity as he vividly describes his life when he purchased his first mutual fund at age seventeen and later started his own company.
Mr. Payne's book should be required reading for all high school and college seniors before they set out in the real world of financial dealings.
His book is not to be shelved, but used as a every day reference tool for those who delve into the stock market. It's a great gift for family and friends for the holidays, or any day.
Hindsight is 20/20 --count my friends and I in!
The Real Deal.......2007-09-12
This book is truly an educational tool for novices,pros,and anyone in between.Mr.Payne doesn't overwhelm you with sophisticated jargon instead he gives you precious gems in plain English.The explanations for charts and how they should fit into an investors strategy are priceless.I like the way this book approaches the mental aspects of stock investing and the discipline that needs to be exercised.This book isn't for daytrading or options gambling but what this book shows that many others don't is that you can build wealth in a steady manner by being smart,acting fast using the right knowledge and mentality.The stock market market isn't just for the big boys and insiders, it's for anyone who desires more out of life and is willing to work for it.
Fundamentals to live by.......2007-07-25
This book outlines practicle straight forward market knowledge written to focus investors on core fundamentals. Charles discusses this in lay persons terms while pointing out the function of the market from both sides of the street. The good, bad and the ugly. I've been investing for 15 years and it was a terrific tune up confirming many of the things I was doing right as an investor while providing clarity on lapses in my investing habits. This is a must read for all investors.
Get in the Stock Market: It is a Life Long Endeavor.......2007-07-12
As a small investor I work hard to keep track of future market trends. I found Mr. Payne's book to assist me in this endeavor. It logically organized, well written, but most of all an enjoyable read.
The author communicates the point that the stock market is a life long endeavor but most importantly to 'get in the game' because as trends show, the stock market goes up over time.
We also enjoy Charles on Fox News Saturday morning. We are very happy to have our point of view so eloquently presented.
A LOT OF WORDS AND LITTLE VALUE.......2007-07-10
This is a very disappointing book. Charles starts off right, talking about investing rather than trading (99% of us should do the former), but then spends a lot of time talking about trading techniques, chart formations, rumors and short term issues. Even when he talks about the fundamental analysis for finding stocks, he does not seem to be sure exactly what is the key item for asset slection. The charts are just terrible.
He could have written a much better book with half the pages.
In summary, it is a lot of rambling by a guy who is a good talker.
If you want some good books buy Ken Fisher's, "The Only Three Questions, ..." and Joel Greenblatt's "The Little Blue Book...."
Book Description
Can a book teach you how to beat the pants off the stock market? After all, billion-dollar portfolio managers can't do it -- and if they can't, they figure no one can. Business-school professors not only say it's impossible, but they can cart out plenty of statistics to prove it. So, why should you buy this book? Because Joel Greenblatt has been beating the pants off the stock market (with returns of 50 percent a year) for more than ten years. And now he's willing to show you how to do it, too.
Here, in this witty and accessible guide, you'll learn the secret hiding places of stock market profits. You'll see how simple it is to succeed where the professionals and the professors have failed. No special tools are required. No degrees are needed. All it takes is a little time and a little effort, and You Can Be a Stock Market Genius.
But who's Joel Greenblatt and why should you listen to him? He's the former chairman of a Fortune 500 company and founder of Gotham Capital, an investment partnership whose stock portfolio achieved returns of $52 for each $1 invested at its inception. Now he's ready to reveal all his secrets.
This book will show you how to uncover the investment opportunities that the experts are actually trained to miss. You'll learn the hidden value and the incredible profits that lie waiting in those uncharted areas where the individual investor has a huge advantage over the Wall Street pros. This is not a book full of theoretical possibilities; You Can Be a Stock Market Genius is a practical guide to finding those special situations in which big profits are possible. It's all here, including specific case studies, the background information you need, and the tools you'll use. If you're an investor who wants to beat the market, you've come to the right place. If you want to be a stock market genius, just think of this book as your personal treasure map to the secret hiding places of the stock market profits that you've been looking for.
Customer Reviews:
One of the most interesting books I have read recently.......2007-08-23
Joel Greenblatt's book is a masterpiece of investment information. The book provides valuable information for anyone involved in the markets, whether they are an individual investor or a finance professional.
The book details several types of special situation investing and explains the pros and cons of these situations. What was most impressive about this book however, is that manner in which he manages to explain everything he is discussing in such a clear, and engaging fashion. Although I do not usually think of finance books as "page turners" I read this one virtually, in one sitting.
My other favorite book.......2007-05-17
I know the title of the book sounds like a joke but it's a great book. In fact, it is my favorite investment book after Warren Buffett's letters to shareholders. Joel Greenblatt takes you to investing areas that aren't followed closely by Wall Street and help you make money at the same time.
I am also a sucker for investment books that are fun to read and doesn't cause me to feel like I'm chewing glasses. This doesn't mean this book isn't top-notch! For what it's worth, I would've probably pay over $50 for this gem.
A good book, despite the title.......2007-04-15
Although the title leaves a little to be desired, and you may want to hide it from friends who think you have a get-rich-quick scheme brewing, this book is actually full of insightful knowledge about special situation investing. These are situations in which the market may misjudge a company's stock price and a smart investor may be able to jump in and take advantage of the temporary mispricing. A few examples include spin-offs, where a company will break off a part of its business as a new company with its own stock, corporate restructuring, merger securities, and companies recovering from bankruptcy. Each chapter covers a different concept and includes a few examples.
The book is written well with lots of humor throughout. A beginner without an adequate background in business may find the topics confusing, but intermediate investors should be able to find some practical knowledge of places to look for mispriced companies. A warning: the ideas do require some homework. Be prepared to read through press releases, financial statements, and other boring pieces that no one else bothers to read to find potential picks. But that's what value investing is about, finding the stocks that no one else bothers to look. Highly recommended.
Uncover the Secret Hiding Places of Stock Market Profits.......2007-04-14
I am usually turned away by cute and quirky book titles, and though this rule is usually a good one to follow, this book is another good reason not to always judge a book by its cover. The sub, sub-title is the real heart of the book on how to "uncover the secret hiding places of stock market profits". If I add one of my favorite lines in the book, "you don't have to be a genius, but you do need a basic understanding of financial statements, some common sense, and the patience necessary to gain experience" this quote really sums up the thesis of Mr. Greenblatt. His theme being that I will describe and point the way to some of the hiding places of possible under appreciated value opportunities, but you as the investor must put in the due diligence and a little work on your own.
Though this book was originally published in 1997, Mr. Greenblatt is still at his trade and doing well which bodes well for this book and its teachings. Toss in a little uncertainty, a special situation, your due diligence, and your on your way as you now know the hiding places.
Who are you?.......2007-03-14
There are two types of people; people who save money and people who don't. It is really easy if you don't save money (you will suffer when you are old, but now you are fine). If you save money, you are always thinking about where to invest money. You can either put money in bank (where you are barely beating inflation) or you can put money in stock market.
There are two types of people who do "something" in stock market; people who trade and people who invest. If you believe in investing and not trading, you are perpetually worrying about finding "cheap" stocks (if you are buying "expensive" stocks then you should STOP and start trading instead).
It really doesn't matter which category of people you belong to, you really need to read this book as a starting point for your investment education. Joe gives you some investment scenarios to consider for finding "cheap" stocks, but, more importantly he does that in very "average Joe" friendly way. Really easy read.
Book Description
How to invest using straightforward common sense instead of misleading"hot tips"
While market pundits argue the rational market theory, one theory gets almost universal consensusthat of the irrational investor. Outsmarting the Smart Money outlines where most investors go wrong and explains how to instead approach the markets with intelligence and calm. Filled with hard-hitting insights and useful lessons, it shows how to use market-proven techniques and strategies to overcome biases, myths, and mistakesand beat the pros at their own game. Cunningham presents flexible security analysis guidelines for investors who want to guide their own portfolios, but don't want to devote all of their free time to the effort including:
- How to overcome personal biases, misleading information, and market inefficiencies
- Methods to avoid being cheated by money managers, and identify "spin" reporting
Customer Reviews:
Disorganised and unhelpful writings! I really want a refund!.......2006-08-05
Dont know whether the author had been too keen to show how good he wrote or to publish a new book or what, this book just lacked the substance to be useful on investment or trading. I doubt whether any reader of it can "understand how markets really work and win the wealth game" per book title by the very descriptive and insightless essays in unlinked chapters. I wonder why some referrals could praise it as an excellent Trading/Investment Psychology book. As a pro trader/CFA/trading book lover, I cant tell anything positive about it. So far I had rated less than five books of this category a one star as far as I remember, and this book is one of the minority.
Barron's Is Right: Top Book of 2002.......2003-01-26
I read Cunningham's book based on the review in Barron's rounding up the best investment books of 2002. They were right. The book is a eye-opening intro to the psychology of investing, important to investors and market observers/regulators. (Cunningham's other books have more of the basics for investors--also very good books.)
Great Book (Odd Title).......2002-09-19
Awesome. Cunningham dissects the woes besetting corporate American using lucid, concrete examples, with boundless energy and enthusiasm, endorsed properly on the back cover by those who take behavioralism seriously, including Gary Belsky, who wrote the top-seller "Why Smart People Make Big Money Mistakes" (which is about general habits, not investment philosophy of which Cunningham writes) and Robert Hagstrom, prolific author (who writes about investment philosophy, and sometimes behavioralism). What an astonishing record Cunningham has developed as a writer and expert in invesetment theory and practice! A better title for this book would be Rational Investing in a Hair Brained Environment; the one chosen is unduly flashy for the seriousness of Cunningham's pursuits (he's a professor of law and business!).
Title promises, but book doesn't deliver........2002-09-02
Doesn't this book sound like a battle plan for investment success, maybe one filled with value-based accounting lessons? It's not.
In fact, we are spared math, and we are not given practical counsel, either. That was what I looking for, as the title suggests. The title should be How Can The Smart Money Be So Dumb.
Instead, this is an interesting run-through of recent horror stories on Wall Street from the Internet bubble to IPO's to pro forma accounting and Enron. Behavioral finance is discussed here, but Why Smart People Make Big Money Mistakes by Gary Belsky and Thomas Gilovich is far superior.
Or read Buffett: The Making of an American Capitalist by Roger Lowenstein. Or John Neff On Investing instead.
Mr. Cunningham is one of the new wave of Buffett explainers. (Where were you people 15 years ago when there was money to be made buying Berkshire?) And why does someone so incisive, so downhome funny as Mr. Buffett need so much explanation?? (Try Cunningham's The Essays of Warren Buffett: Lessons for Corporate America or the Berkshire Hathaway annual report.)
Unfortunately, the author lets slip his idea of a five-year holding period for stocks. That may turn out to be good advice, but which stocks would he choose to hold? We have no idea. (Tech stocks, big winners 2 years ago, have crashed back down to their 1997 prices. And non-tech Walt Disney is well below its 1997 prices.)
I think Mr. Cunningham is an extremely brave and patient investor.
Mind-field.......2002-06-22
In a perfect investment world the price of a stock embodies its value. And those who believe this 'efficient' market hypothesis will be buying index mutual funds certainly not this book. But those who dismiss this academic construct to profit from the inefficiencies evident in the market still run substantial risks not adequately addressed by most investment books. The minefield of risks that Cunningham guides us through is that the biases of others, the cause of those price vs. value anomalies, are also our own biases and can trigger money-losing investment decisions. Overconfidence and the "pattern seeking" bias to project short term trends into the future are just two examples, but they do so some of the worst damage. They lead to a dangerous reliance on margin borrowing and excessive trading activity. Also, recognize that companies make many of the same behavioral errors. It is the author's "smart" investor who can spot the folly of manic acquisitions by companies acting as if they were on steroids - grasping for growth at a fiscal cost. Cunningham dismisses technical analysis as "hokum" (Here he agrees with the proponents of an efficient market who maintain market movements cannot be predicted accurately). Stay away from IPO's, companies relying on pro-forma accounting, and sector funds. Read analyst reports with caution, but do study closely "management's discussion" of their business in the annual report. Be wary of stock buybacks, stock option programs, stock splits, spin-offs, secondary offerings, and performance-based incentive plans. Any of these programs can be abused and rise out of corporate hubris. Above all: Recognize your biases, your tolerance for risk, be objective, and have criteria to know when to sell your positions. A lot of territory is covered in this book with some of the best material appearing in Chapters 10 and 11. Cunningham builds a persuasive case for adopting a long term, value oriented investment philosophy which is least affected by these biases.
Book Description
Discover the principles that made Warren Buffett a billionaire! Developed by legendary Wall Street wizard Benjamin Graham, mentor of Warren Buffett, value investing strategies are the most reliable, fail-safe, and successful money-making methods ever invested for investing on Wall Street. Janet Lowe presents these methods in a crisp, readable, and easy-to-understand style, covering, how to: Size up a company's growth prospects; Spot intentionally manipulated and misleading balance sheets and income figures; Create a "margin of safety" for your investments.
Customer Reviews:
Book:Value Investing Made Easy.......2007-08-06
Concise and through treatment for the uninitiated investor interested in investing in the long view.
"Graham Lite".......2006-06-16
This book was a decent introductory work to value investing a la Ben Graham, but it was just that, an introduction. It is quite a bit more readable than Security Analysis or The Intelligent Investor, but it also lacks the depth of these works.
In particular, this book does an excellent job of summarizing Graham's thoughts with respect to ratio analysis, management analysis, and provides a general overview of how to view financial statements. That being said, it does not explain how to "drill down" into financial statements and adjust them for various condictions as Graham sets forth in "Security Analysis."
Another weakness of this book is that it does not delve into anything other than common stock ownership. This might be a particular problem, as Graham, for example, advised that any issue senior to the one being analyzed must be viewed as debt, since it has a prior claim on the company's earnings. Hence, using Graham's analysis, dividends in respect of preferred stock would be deducted from earnings (as a payment on debt), whereas they are generally considered dividends on a par with common by many investors. Similarly, Security Analysis also discusses adjusting financial statements (for purposes of analysis, including ratio analysis) for warrants, etc.
In all, though, this book is a much easier read than any of Graham's works, and it certainly provides a good introduction to his theories of investing. I would recommend that anyone who likes what is said in this book read Warren Buffett's annual reports and any of Graham's books as well.
Key Lesson- Stick to the Proven Performers.......2006-01-04
The author touts the book as a distillation of the key concepts of Benjamin Graham's classic text, Security Analysis, but fails to elaborate on a key point repeatedly mentioned in Graham's book. Graham noted that at times, some bonds make for better investments than stocks as a class of investments, and at other times, some stocks make for better investments than bonds as a class. This readily follows from Graham's definition of an investment, which he stated most succinctly in his book for the novice investor, The Intelligent Investor:
An investment is any activity which provides safety of capital with a reasonable expectation of income. All other activities are speculative.
Lowe's book concentrates solely on stocks, and ignores the potential of bonds as an investment. As a result, the book distills only some of the wisdom of Security Analysis, which, by the way, can be found in a more accessible form in Graham's book, The Intelligent Investor.
By saying this, I do not mean to imply that Value Investing Made Easy is not a worthwhile read. Rather, it is the book the novice should read if and only if he or she does not want to spend the time reading Graham's Security Analysis, a formidable text nearly a thousand pages long (however, in Graham's defense, most of these pages are devoted to graphs, charts and numerous examples of the application of his techniques).
Lowe's book presents most of the important tenets necessary for picking stocks along the lines of Graham and Dodd (and Warren Buffett). A careful reader will notice, however, that the stock universe for which the tenets are applicable limits him or her to solely the proven performers. Among other things, these stocks typically, but not always, pay dividends, or have a history of doing so.
I found the text to be somewhat of a letdown because most of it was devoted to the justification for value investing, and not on the techniques of value investing per se. The book relied heavily on notable anecdotes- star performers of value investing fame such as (yep, you guessed it) Warren Buffett, Irving Kahn and others, and a bit less on the techniques in action as I would have liked.
However, in its defense, the book contains several pearls of wisdom that the novice investor would do well to know like the back of his or her hand. The book lays down an appropriate definition for intrinsic value, provides a satisfactory explanation of the role and importance of assets and dividends, and most important, the use and limitations of long-term trends in earnings and dividends to make assessments of stock investments.
On a personal note, I feel the most important lesson of the book is contained on Page 20 of the text- How Trustworthy Are the Numbers? Here, Graham warns us that, "Deliberate falsification of the data is rare; most of the misrepresentation flows from the use of accounting artifices, which it is the function of the capable analyst to detect. Concealment is more common than misstatement."
I leave the potential reader with one critical admonishment taken from the text (Page 21) which is perhaps the most relevant of all of Graham's tenets for the novice investor:
"When an enterprise pursues questionable accounting policies, all of its securities must be shunned by the investor, no matter how safe or attractive some of them may appear."
Value Investing Demystified?.......2002-09-16
Intended as a more digestible and accessible version of the teachings of the brilliant Benjamin Graham and his associate David Dodd, Ms Lowe expertly cuts a delicate path between writing, on one hand an overly simplistic overview and on the other an unneccessarily rigorous text book.
Although this Book is more theory than practice and certainly more Art than Science it nevertheless affords the Novice to Intermediate Investor an excellent interpretation of the thinking behind/and the implementation of Value Investment in the Stockmarket,a technique that rewarded it's true Practioners handsomely over the years throughout widely differing market conditions.All of Benjamin Graham's Stock Market Investment tenets,such as The Margin Of Safety, Intrinsic Value,the avoidance of speculation,the preservation of Capital,the need to think and act independently of the crowd,to build an extra margin of safety into estimates by using conservative figures etc,etc are clearly and vibrantly related to the Reader.
Janet Lowe adds value through the use of real life Companies as examples and each chapters comes with several very useful "sturdy pillars" or quotations from Ben Graham to elucidate the central thrust of the particular passage concerned.
Although well written and carefully researched I have some small gripes in that some of the mathematical formula are not that clear but that should not deter potential readers from buying this Book.Furthermore if Buyers are expecting the Book to explain how to calculate a useful range of current intrinsic values for a stock or answer questions such as "at the current price what growth rate is the Stock Market discounting for this Company" using simple fundamental analysis then they will be disappointed(for this purpose I would recommend the excellent "The Vest Pocket Guide To Vale Investing by C.Thomas Howard,ISBN 0-7931-1728-3)
More humourously, in these more politically correct times, Ben Graham's advice for Women to buy there Stocks as if they were buying their Groceries rather than their Perfume is admonished as being sexist.I wonder if Ben Graham had advised Men to buy there Stocks as if they were buying Gardening Equipment and not aftershave have received the same treatment?I don't think so!
However ,in conclusion, I feel this Book will serve as an invaluable guide for the ordinary Investor looking for a time tested and proven technique who is willing to exercise both patience and discipline
Perhaps Value Investing "demystified" rather than "made easy" would have been a better title.Nevertheless I feel that Ben Graham would have approved.
Nice Try - A misinterpretation of the concepts.......2002-07-17
I like the idea, but...
Having recently undertaken the wonderful journey of studying Benjamin Graham and Warren Buffett through reading most of their writings, I felt obligated to comment on this book. Many important concepts are nicely explained, and the format is pleasing, however, a disturbingly significant number of facts presented are gross misinterpretations.
The author does a nice job of explaining commonly used Wall Street terminology and concepts, for the novice. However, she fails in the infinitely more important task of consistently explaining the core concepts of investing (and not just stock speculating -- as so many of us all too often do).
Two (among the many) misleading points involve investment diversification and Buffett's used cigar-butt approach. She implies both Graham and Buffett whole-heartedly embrace diversification. Unless I have been reading the wrong Graham and Buffett, they certainly do not do so, unconditionally. The author further misrepresents Buffett when she actually leaves it that he finds the "cigar butt" approach, a wise way to buy businesses. He indeed called that method, "foolish" [Mr. Buffett: if that is no longer the case, please excuse my error.]
If you are searching for enlightenment, the way I was, you will be 1000 times better served to read "The Essays of Warren Buffett", arranged by Cunningham and, of course, Graham's "The Intelligent Investor".
Average customer rating:
- For traders with Microsoft Excel experience.
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Smart Momentum: The Future of Predictive Analysis in the Financial Markets
Hugh Clark
Manufacturer: Wiley
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Momentum, Direction, and Divergence
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Trend Trading: Timing Market Tides (Wiley Trading)
ASIN: 0471486442 |
Book Description
Fast technological advances have allowed investors and traders to make increasingly sophisticated analysis of market momentum. The current trend in the financial world continues towards momentum analysis and Smart Momentum builds on this to create a new and far more reliable method of momentum analysis called "smart momentum". This dependable technique has opened up new possibilities in investment strategy and this book looks at both the theory and the application. The reader is guided through the techniques of smart momentum in clear accessible language.
- Hugh Clark has vast investment experience and provides practical and proven examples of smart momentum in practice.
- Explains in a highly practical manner the totally new technique developed by the author
- Contains a complete worked example of the whole technique
Customer Reviews:
For traders with Microsoft Excel experience........2002-02-17
I think this book is targeted towards discretionary traders who are comfortable with trading indicators (MA, RSI, MACD, etc.), but unfamiliar with how to back test these indicators on historic data. If you want to back test your trading ideas in a Microsoft Excel spreadsheet, this book may be of interest to you. If you already know how to test systems on Trade Station or Super Charts, this book is probably too elementary.
This book is divided into two parts. Part I explains the theory of "Smart Momentum." Part II shows step-by-step how to implement it in Microsoft Excel. The nice thing about this book is that Part II parallels Part I on a chapter-by-chapter basis.
The book focuses on (a) indicator creation, (b) indicator selection, and (c) indicator combination. The logical development of a trading system proceeds as follows:
An equity curve shows cumulative dollars extracted from the market versus time. The "Smart Momentum Ratio" (SMR) summarizes an equity curve in a single number. (The author claims the Sharpe ratio, in and of itself, is not good enough.)
One can compare equity curves by comparing their respective SMRs. The better the equity curve, the larger the SMR.
Since an equity curve is the cumulative daily result of a trading indicator: The better the trading indicator, the larger the SMR.
A collection of one or more trading indicators comprises a trading system. Since a single indicator may fail under certain market conditions, it is desirable to build a trading system out of several uncorrelated indicators.
If one varies the parameters of a trading indicator, and its SMR stays relatively constant, then that indicator is said to be "robust." Indicators that contain SMR spikes (referred to as "Matterhorns") are not robust. Curve fitting is avoided by using several data windowing methods, which are briefly mentioned.
By the way, this book does not teach you how to use Microsoft Excel. It only gives you the Excel spreadsheet formulas to enter into spreadsheet cells (I did not test them to see if they were accurate). The techniques shown in this book are fine for tinkering in Excel, but to seriously create and analyze indicators the way the author suggests would take man-years in front of Excel. This may lead a person serious about developing trading systems into computer programming and optimization algorithms. For the latter approach, I recommend "The Encyclopedia of Trading Strategies" by Katz and McCormick.
Because of the above reason, and the reasons that follow, I only gave the book 4 stars (with respect to its intended target audience):
Chapter 9 - Spreadsheet preliminaries) The author uses USDJPY data sampled at 6:00, 12:00, and 18:00 GMT, but does not tell where to acquire such data.
Chapter 11 - Indicator selection) The author tells how to find robust indicators, but does not give the Excel steps needed to generate the 3D charts used in companion chapter 4.
Chapter 12 - Indicator combination) Indicator correlation matrices are presented. The author says they are generated with the Excel "correl" function, but does not reveal what cell references to use.
Chapter 13 - Maintenance) Failing indicators are replaced with new ones on a frequent basis. In my opinion, this is not the signature of a robust trading strategy.
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