Warren Buffett is an example of someone who recognises the importance of reading. It’s been said that he spends 80% of his day reading and thinking and can read up to 600 – 1,000 pages a day.
As a system trader it is also important to read and to keep on top of new developments in the industry. However, doing so is difficult because of the vast amount of information that is produced daily. Read more »
I recently finished reading the book A Man For All Markets by Ed Thorp. I have to say that I think this could be one of the best trading books ever written!
Why? Simply because Ed Thorp is a true trading legend and in this book he details how he went about beating not just the financial markets, but casinos as well. Read more »
I have spent much of the morning reading Misbehaving: The Making Of Behavioral Economics by leading expert and professor, Richard H. Thaler. This is a book that offers a full introduction into behavioral economics whilst managing to still be entertaining and readable. Read more »
In this post I take a look at one of the greatest traders of all time, Jesse Livermore. Jesse was famously profiled in the classic investing tome Reminiscences of a Stock Operator, a book that has been called the best trading book every written.
This is a long piece, clocking in at around 9,000 words and it covers all of Jesse’s most important trading lessons. The quotes are taken directly from the original book by Edwin Lefèvre. Read more »
The first version of What Works on Wall Street, by James O’Shaughnessy, was received very favourably by the investment community. Stock Traders Almanac called it the “best investment book of 1996” and “likely the most influential book on investing in the decade”. It was praised for it’s attention to detail and in-depth research into the factors that affect stock performance. Read more »
I’ve spent half the day researching new investing strategies and half the day reading Happier by Tal Ben Shahar.
Tal Ben Shahar is a teacher, writer, TED speaker and Harvard lecturer.
According to the sleeve of the book, Ben-Shahar is an incredibly popular teacher at Harvard and his course on happiness is the most popular in the university’s history. Read more »
There is a lot of bad information in the trading world and the strategy of trend following is often misinterpreted. It can be especially hard for a beginner to get to the truth and that’s why I’ve put together this trend following PDF which you can download for free. Read more »
Keen readers of this blog and those following on Twitter will know that I just released my first audiobook, available on Amazon audible and iTunes. If you are looking for a good trading audiobook then look no further!
My trading audiobook
When I first published my book, How to Beat Wall Street, I was not sure how well it would be received.
I knew that I had put a great deal of work into it and I thought that it was fairly concise and good value but I honestly didn’t expect it to do as well as it has done.
In fact, the book has been consistently near the top of the Kindle charts (in the futures trading and stocks categories) for the last few months and I have had only positive comments from those who have bought it. (Which I am eternally grateful).
Considering this success I thought it only right to turn the book into an audio version and using the ACX Amazon platform it was remarkably easy. ACX matched me up with a number of highly qualified voiceover artists so all I really had to do was adjust the book for audio then choose my preferred narrator.
I opted for a really great reader in John Eastman. John has lots of experience in trading audiobooks and he did a really good job of meeting my exacting requirements for tone and clarity.
If you haven’t yet checked it out, you can get the audiobook from either Amazon audible or iTunes. Amazon audible are currently doing a promotion where you can get the audiobook for free with a trial of the service.
If you’re into audiobooks, it’s a great risk-free way to trial the program.
What’s in the audiobook?
Essentially, the How to Beat Wall Street trading audiobook contains the same content as the print and ebook versions.
Of course, buying the audiobook entitles you to the same FREE download pack of code and extras that comes with the print and ebook.
You can see exactly what’s covered in the book here, but to sum up, the audiobook is essentially a concise guide to all that has been written on trading and investing, covering:
– Trading fundamentals: central banks, macro-economics Keynes & more…
– Trading philosophies: trend following strategies, mean reversion techniques
– Famous position traders: strategies of Warren Buffett, Jim Rogers & George Soros…
– Timing: financial ratios, volatility analysis, Dow Theory, stock market cycles…
– Risk: money management techniques, trading psychology…
– Secrets & Tips: news trading, volume analysis, seasonal patterns…
– Technical analysis: MACD, moving averages, Bollinger Bands…
– Trading systems: design & optimisation, 20 stock trading strategies, trend following strategies and mean reversion trading systems…
– Resources & bonus material: Comprehensive resource material, tips for online trading, best trading books bibliography…
And of course the audiobook includes the 20 trading system ideas and code.
How to get the audiobook
It’s pretty simple. If you’re an Apple fan you can head over to iTunes and download it there. If you’re more of an Amazon kind of guy you can get it from Amazon audible. And on audible you can also get the free trial, which allows you to get the trading audiobook and download it completely free!
Remember, if you do buy the audiobook make sure to come back here and request your free code and extras pack.
Get the audiobook.
Just picked up ‘Finding the Next Starbucks: How to identify and invest in the hot stocks of tomorrow’ by Michael Moe.
It’s not a very new book, it was actually published in 2006 but I’m finding it pretty good so far. As you might guess, the gist of the book is to try and find the next hot stock; another Starbucks, Amazon or Google. The ten and twenty baggers as Peter Lynch likes to call them.
Finding the Next Starbucks
The author Michael Moe knows what he’s talking about. He’s been on Wall Street for over 20 years and was one of the first research analysts to identify Starbucks as a huge opportunity in 1992. Back then the company was worth around $220 million and today it’s worth over $56 billion, having gone up thousands of percent.
But that isn’t the only impressive stock pick Moe has made over the years and in this book he shows how he goes about looking for similar hot companies or Starbucks-esque ‘supernovas’. For example, he also picked Apollo Group and even called Google cheap at the time of IPO.
Opportunities in smaller cap stocks
Michael Moe strongly believes that if you want to obtain super sized returns you need to look at smaller companies. Moe claims that small-cap stocks are overlooked by Wall Street since they do not have the size to take large volume orders. That represents an opportunity for smaller investors to capitalise on their own knowledge and find the next big company while it’s still in it’s infancy. As the author states, nearly all big companies today were small caps once.
For example: Apple, Gilead Sciences, Nike, Home Depot, Wal-Mart, Cisco, Yahoo!, all these stocks began with a market cap (at IPO) of less than $1 billion.
After going through the book it’s clear that although Moe likes smaller companies that does not necessarily mean penny stocks. In general, it seems that Moe finds his best success stories in the small-cap range – between $200 million to $1 billion or there abouts. The reason for this is clear. Small-cap stocks outperform large stocks over time. For example $10,000 invested in small caps in 1973 would have been worth over $1 million dollars in 2005 (an annual gain of 16.3%) while $10,000 invested in large-cap stocks would have yielded only $127,963 (8.6% annual return).
Looking for bargains
One of the things Moe is keen to stress in the book is that finding the next Starbucks or Apple stock does not come down to luck. Rather it comes down to a lot of research and by using a system that he has honed over the years.
The essence of which is to find companies in their infancy that possess some key characteristics.
Firstly, Michael Moe suggests that earnings are the most important criteria by which to assess a stock and that a stock price will move in direct relation to it’s earnings over time (a fact the author repeats throughout the book).
Second, Moe talks about the ten commandments that govern his search process. These cover the long-term and short-term outlook of the company, the valuation, the management and the industry it operates in.
The Four Ps
Moe then writes about the 4 Ps that help him come to an investment decision. Which are:
Essentially then, Moe looks for companies with great people and he considers good management to be the biggest factor in finding ‘supernova’ stocks.
The company’s product must also be good. It must be unique and hard to replicate elsewhere and it could well be causing a stir among those who have come across it.
Potential is all about the opportunities for open-ended growth of the company. And this also comes down to global trends or as Moe puts it ‘megatrends’.
Finally, predictability means taking a professional, value approach to investing and minimising risk. Trying to find companies that in their short histories have been able to consistently drive up their revenue.
Without going too much further into the book, another key concept that Moe puts across in ‘Finding the Next Starbucks’ is the impact of ‘megatrends’, a term first coined by John Naisbitt. Moe gives several examples of these:
The Agrarian economy in the 18th Century, the Industrial revolution, the manufacturing boom around 1910, the services era in the 70s and the information economy brought on by the invention of the Internet.
Moe claims that we now exist in a knowledge megatrend and that knowledge jobs such as IT, health and business services will excel. The key is to study the world, look at what is happening and what people are talking about. Look at the things that are really changing people’s lives and where the money is flowing.
If the past is anything to go by, looking for a megatrend and hitching a ride seems like the surest way to get on board a tenbagger supernova and reaping the rewards.
All in all ‘Finding the Next Starbucks’ is an excellent book for stock pickers and written in a similar vein to Peter Lynch’s One Up on Wall Street or Chris Camillo’s Laughing at Wall Street. It’s easy to understand, somewhat inspiring, and a great read for those looking for small high growth stocks. While this book should not be number one on the list for new traders or investors it’s definitely quite high up.