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
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.
The book then induces you to try out the Zacks online service and get their daily earnings updates and eletters like "Profit from the Pros". Don't do it. Signing up will unleash a torrent of spam from Zacks for many of their services. I have unsubscribed numerous times and even emailed their customer service department. They did respond but I still get the crap. Even worse, they gave my name to a marketing partner and now I get even more garbage.