Stock-market

Why is Paul Volcker writing books with convicted inside traders?
Volcker supposedly had a good reputation.

Soros was convicted of inside trading in December 2002. There should be a section in this book on how to make piles of money by trading with non-public information.

Anyone who has had as much success as Soros must be doing something right, so I respect his mind. Unfortunately, he is a terrible writer. He could take ten pages explaining why 2 + 2 = 4.

Here's an example:
"[the shoelace theory]...can be interpreted as a synthesis of Hegel's dialectic of ideas and Marx's dialectical materialism. Instead of either thoughts or material conditions evolving in a dialectic fashion on their own, it is the interplay between the two that produces a dialectic process."

This passage is a microcosm of the entire book: he makes a valid point, but it's not a particularly significant or difficult point. The only difficulty is in parsing his turgid language. I sense he is a great investor who wants to be considered a great thinker, and he believes that in order to accomplish this he has to use big words to express his theories.

Soros's widely praised theory of reflexivity is a valuable contribution, but he doesn't need 400 pages to convey it. I didn't read this book expecting a "how to make money in the stock market" tutorial, but I did expect to gain a better insight into how the markets function. I did not get that.

Don't waste your time.

Soros wrote this book several years ago as a self proclaimed "life's work" about his techniques for trading in the currencies and commodities markets. He became famous for making a billion dollars in one day by shorting the British pound against the dollar and other currencies. More recently, Soros has become famous for his financial backing of neo-communist media-hit organizations, like moveon.com and international A.N.S.W.E.R., due to his pathological and self-acknowledged hatred of G.W. Bush. This seems at odds with the cooler countenance of a financial markets trader such that he is, and a successful one at that, but, it's a funny and inconsistent world, is it not?

Soros demonstrates throughout this somewhat turgid tome a masterful knowledge of the seemingly ceaseless elements of the fundamentals underlying the trading decisions of a fin-mkt operator. His theory of reflexivity, a play on Einsteins theory of relativity, is a commentary on the human capacity to change events by taking actions ahead of perceived expections only to distort the outcomes expected in the first place. Put simply, it's an understanding of how markets actually work in real life, not in the void of an academic lab setting.

When you're capable of making a billion in a day it's easy to gain a messianic complex and there's a bit of that on display in this book. Couple that with Soros' having escaped totalitarianism as a young Jewish boy in Hungary, and you can only marvel at his skill, talent and tenacity.

Being a creature of the fin-mkts myself I thoroughly enjoyed this book, however it would be tedious for almost anyone not consumed by the prospects of i.e. shorting palm oil in Asia while going long soybeans in the west, or someone bent on knowing the open interest represented in the oil tanks of Rotterdam; not something one hears discussed nightly on the news.

For a look into the mind of the money behind the Kerry campaign of 2004, read this book. But, read it dlowly and take copious notes. And, good luck on your foray into currency trading, you'll need it.

I believe that combining the strategies discussed in this book with CANSLIM provides a very powerful approach.

Like O'Neil, Zacks bases his research on real data; this data has been collected by the Zacks Investment Company for 15+ years.

This book is filled with dozens of graphs to better explain the research. Just like the Zacks ranking system this book is largely focused on one of the few good things a market analyst can give you - earnings estimates.

I believe that in the upcoming years Ahead of the market will be a book that I will be referring back to since it is excellent. The research is practical and I believe is an interesting strategy.

In closing I just want to say that this is one of the books I have read which I found to be really good and have the potential to assist us in our investing endeavors.

Reed Floren

I am a financial advisor. Several years ago, doing my own research, I discovered that earnings estimates trends have a much higher correlation with stock prices than do reported earnings. The future value of a stock is in large part determined by its future stream of income (earnings). I was compounding my account around 50%/year from 1997 - 2001 but was somewhat skeptical whether I could continue to do this for 10 years or more. I thought I was onto a good stock picking method but that this method may not work in future market conditions. At the end of 2001 I discovered the Zacks philosophy and their reported returns for the Zacks #1 ranked stocks (34% annual gains since 1980). Wow, now that excited me. My system is fairly similar to Zacks ranking system so, just maybe I can continue to do this into the next decade or two or three! This book is worth the read. Forget about picking stocks based on "static" measures such as looking at balance sheets and income statements. This does not work. You much be more intuitive and the Zacks rank helps simplify this.
Rob

The path to superior returns in the stock market is to anticipate changes in investor expectations. The multi-million question is how to do that.

An investor needs to realize the market is made up of 2 broad groups: retail investors (little guys like you and me) and big insitutions (mutual funds, insurance companies, hedge funds, etc.).

Big institutions drive market movements. The people responsible for these market movements have the same professional training, and tend to think alike. They focus primarily on reports provided by the analysts at major brokerages.

Many novice retail investors look at an analyst recommendation and mistakenly believe it is profitable to act on it. This book demonstrates why this is the way to the poorhouse.

Even though analyst recommendations are worthless, analysts do provide very profitable info--if you know how to use it. If you look for changes in earnings estimates (upward or downward), you will be able to profitably anticipate the actions of the big guys--who typically chase after earnings momentum. A positive revision will typically send the stock higher for 1-3 months, making such stocks profitable long candidates for shorter-term traders. Likewise, negative earnings revisions are good short candidates.

Incorporate this fundamental framework with preferred technical screening, trade entry, and exit criteria, and you can develop a very reliable and profitable trading system regardless of market direction.

The book will also educate you on the pressures analysts are under to remain positive about a stock despite the fact fundamentals suggest the company is a poor investment. The situation will not change, despite government action to correct it, since there really isn't any incentive for major brokerage analysts to be honest. They have much more to lose than to gain by issuing more sell recommendations. The stock buyer should beware.

I became interested in short-term swing trading a couple of years ago. Since then I have studied several techniques and read books by Farley, Markman, Nassar, Angell, Landry and Williams. All these books offered good information and techniques for short-term trading, but none offered the insight into market behavior like "Advanced Swing Trading." After reading John Crane's book I attended a presentation he made at the Traders Option Forum in Chicago. I was amazed at the information he presented about using market action to predict futures highs and lows. That was the first time I realized the market moved in predictable patterns and they could be used to trade the market successfully. By combining aspects of the Andrews Pitchfork and Babson Action/Reaction lines in a unique fashion, Mr. Crane offers a whole new way to predict and trade future market swings. This valuable book offers clear, step-by-step guidance that will allow you to apply this swing trading methodology to any trading account and improve your bottom line.

Mr. Crane was not only very gratious in answering my questions at the forum, but also made himself available when I called his office a few weeks later. I was impressed with is professionalism and willingness to help. I have recommended this book to other traders and I would recommend it to anyone looking to improve their trading and understanding of market behavior.

I would like compliment Mr. Crane on the clarity with which he explains the "Action/Reactiion" phenomena in commodities and stocks. I have found this book to be most illuminating and it has greatly improved my understanding of the manner in which one should identify segments of a market move. I have studied the Delta system and learned from Joe DiNapoli and both are extremely good, but I can honestly say neither gives me the confidence and or the trigger points as well as this method. I find his unique method of combining Time, Price and Pattern can strengthen the predictability of future market moves. In my opinion this is probably the single best trading book I have ever read on technical analysis. It's a real "where the rubber meets the road" type book that I think most traders will find credible.

For the first time in 6 years of trading, I feel I have a real "Road Map" to the markets! Chapter 8, which John Crane calls "Market Tells", is worth any amount of money he could aks for!

Thank you for writing this book!