Stock Market Woes - Book Review
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I may have missed a book review in between this and the last one, but I'll eventually get to any I missed. The first is my book review of Reminiscences of a Stock Operator by Edwin Lefèvre. This was a book recommended by my father. It is a fictional first person account of a stock operator the first 20 years of the 20th century. Overall, the book was very well written and does an amazing job of only focusing on one part of his life without making you feel that you are missing all the context. Even though he talks about a time when there are only a few hundred publicly traded stocks and the regulations were much looser, there is still a tremendous corollary between his theories and encounters 100 years ago and what they would be now. To top things off, his life was very interesting, including going from millions to bankruptcy a few times. The writing is straightforward and well thought out and utilized and casual, but professional style. I recommend this for anyone who buys or sells stocks (which I have been doing for the last year). Here are some points to take away from the book.
1) You'll never know, unless you bet (meaning that talk it cheap)
2) To make money, you have to be "right", not just lucky. (Basically, if you’re guessing, you'll eventually lose everything.
3) Never trust tips.
4) If you buy a stock expecting it to go up and it goes down (i.e., you were wrong, see #2) than sell immediately. If you buy a stock it goes up, than buy more. I have been having a lot of problems following this one, even though I know it is right. If I buy a stock and it goes down, I feel compelled to wait or even buy more (if it was a good deal at 12 and now it’s at 10, I should buy more. And when a stock goes up, I take my profit and run.
5) I have no idea what I'm doing and there are forces out there that are manipulating the prices and thus my money (If I make money, it's because I'm lucky, which is not good for me)
Stocks are a way to make quick cash, but be careful of what you read and what you think you know. For example, I think Yahoo is a doomed company (they have no unique, patented products), but unless I sell Yahoo stock, I can't even "be right". Of course, the stock price continues to go up. Lately, I've trying a combination of stocks that "insiders" are buying and have been rating high by the supercomputer at vectorvest.com. We will see how I do.
I may have missed a book review in between this and the last one, but I'll eventually get to any I missed. The first is my book review of Reminiscences of a Stock Operator by Edwin Lefèvre. This was a book recommended by my father. It is a fictional first person account of a stock operator the first 20 years of the 20th century. Overall, the book was very well written and does an amazing job of only focusing on one part of his life without making you feel that you are missing all the context. Even though he talks about a time when there are only a few hundred publicly traded stocks and the regulations were much looser, there is still a tremendous corollary between his theories and encounters 100 years ago and what they would be now. To top things off, his life was very interesting, including going from millions to bankruptcy a few times. The writing is straightforward and well thought out and utilized and casual, but professional style. I recommend this for anyone who buys or sells stocks (which I have been doing for the last year). Here are some points to take away from the book.
1) You'll never know, unless you bet (meaning that talk it cheap)
2) To make money, you have to be "right", not just lucky. (Basically, if you’re guessing, you'll eventually lose everything.
3) Never trust tips.
4) If you buy a stock expecting it to go up and it goes down (i.e., you were wrong, see #2) than sell immediately. If you buy a stock it goes up, than buy more. I have been having a lot of problems following this one, even though I know it is right. If I buy a stock and it goes down, I feel compelled to wait or even buy more (if it was a good deal at 12 and now it’s at 10, I should buy more. And when a stock goes up, I take my profit and run.
5) I have no idea what I'm doing and there are forces out there that are manipulating the prices and thus my money (If I make money, it's because I'm lucky, which is not good for me)
Stocks are a way to make quick cash, but be careful of what you read and what you think you know. For example, I think Yahoo is a doomed company (they have no unique, patented products), but unless I sell Yahoo stock, I can't even "be right". Of course, the stock price continues to go up. Lately, I've trying a combination of stocks that "insiders" are buying and have been rating high by the supercomputer at vectorvest.com. We will see how I do.
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