jesse livermore trading rules header imageIn 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 »


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).

Amazon ranking for how to beat wall street trading audiobook

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.

htbws trading audiobook review

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.

HTBWS trading audibook

Get the audiobook.


Finding the next Starbucks book coverJust 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.

finding the next starbucks price chart

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:

People
Product
Potential 
& Predictability

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.

Megatrends

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.

Conclusion

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.



To be perfectly honest, writing a stock market book was never very high on my list of priorities. Only after several years of experience trading in live markets and only after copious studying did I feel confident enough to put pen to paper. Even then, I wasn’t sure how well it a book would be received, particularly as I had no formal training in writing. Of course, now I’ve written it, I’m glad I did, and the response has been much better than I had anticipated.

How to Beat Wall Street stock market book by JB Marwood

My background

I have always been interested in the stock market.

From an early age I would come home from school and watch the Money programme on TV, a weekly show that talked about UK investments. I remember picking a few names, writing them in my school book and then checking them every day to see whether they had gone up or down.

As I went through University, I still kept an interest in stocks but I also started to look at the forex market. For me, the forex market was ideal because it was highly liquid, always moving and cheap to trade. I began trading currencies using a spread betting firm while a student and I also played a lot of poker too.

Futures Trader

After graduation, I continued to trade in my spare time but my education really went up a notch when I took a job as a futures day trader for a trading firm in London. To say the experience was intense is an understatement as I (and two other graduates) were thrown into the deep end from day one. It seems unbelievable now, but we were unfortunate enough to start trading the very day after Lehman Brothers filed for bankruptcy. Our first day of live trading was one of the most volatile day in the markets since 1987 and it only got worse in the coming weeks.

Learning the ropes

I won’t go into the details of my time as a day trader – it would probably read more like a drama than anything educational – but I will say that during that time I learnt just about all I could. I traded through the most volatile period in a generation, where I had to grind out a profit every day in order to survive. I read every book I could get my hands on, studied every article and put in hours of work. I had a good teacher in the form of an ex Deutsche Bank head of trading and needless to say I learnt a hell of a lot.

Trend following

After working and struggling as a day trader for about a year, I started to realise that making money was easier and less stressful on slightly longer timeframes. It was then that I started to look more closely at trend following strategies and before long I branched out with a partner to create our own small fund. It’s the fund we still trade today and is based on a mixture of trend following and fundamental analysis, utilising a semi automated strategy.

My stock market book

In order to keep up to date with the markets, I found myself writing articles for sites like Seeking Alpha and this blog. Soon, I had a fair amount of content so it made sense to start putting it into a book. Of course, once I had made that decision there was no going back. Completing the book took a lot longer than I had hoped and was a lot more work than I bargained for but it was worth it in the end as the book is something I am now proud of.

How to Beat Wall Street: Everything You Need to Make Money in the Markets

In essence, HTBWS is a concise guide to the markets. It covers a large amount of material, reporting on many of the most important financial books and reports written.

It covers the fundamentals, financial ratios, technical analysis, trading systems and more, such as momentum trading and dollar cost averaging. It also comes with bonus material including historical data, excel files and the code for all of the systems in the book.

Reviews

“This book is a great first book for new traders. The author takes the new trader step by step through explaining all the different dynamics of basic trading. This book does a great job of covering all the bases, fundamentals, timing, the risks, tips for beginning traders, the basics of technical analysis, along with the basic concepts of building a trading system. This is a rare book that actually gives some examples of basic trading systems along with their statistics and back tested profitability and their maximum draw down in equity.

This book is a great book chock full of educational material and information that are keys to a new trader surviving that first year in the markets and setting themselves up for profitability. I would put this on a top ten list of books for new traders and I have read hundreds and even written a few of those books myself.”

– Steve Burns, newtraderu.com

The author has provided a good overview of macro factors an investor needs if he aims to beat the market. Thorough introductions on requisite topics are provided. I wonder this might even be used by someone with,hardly much background knowledge to the subject. The book introduces 20 trading systems and Amibroker codes are provided upon request. A readable and usable book.

– Heman Wong, HK

Great book. Easy to read and clear. It gives an overall view of many aspects of trading (fundamentals and technical aspects of stock and forex trading, money management, diversification, economy in general). It helps you to visualize the the global aspects involved in trading, and not just stock trading.

I also appreciate the resources & bonus material that helps you tho develop your own trading system and continue your research.

– Ignacio Riera Fernandez

This is a great book that starts out by explaining the basics to a new beginners and then ends by giving some great advanced ways to increase your investment returns. I highly recommend this book for all levels of investors, the new, the old, and the in between.

– Curt Dalton

Where to get it

link for my stock market book HTBWS