Stock Market Wizards: Interviews with America's Top Stock Traders
Author: Jack D. Schwager
List Price: $28.95
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ISBN: 0066620589
Publisher: HarperBusiness (09 January, 2001)
Sales Rank: 13,177
Average Customer Rating: 3.33 out of 5
Customer Reviews
Rating: 5 out of 5
Rare Access to Valuable Information
First of all, as I write this, the cost of the book is $22.40 plus S&H. Many of the other reviews suggest that it fails to provide sufficient value. Apparently I don't understand something. How much is it worth to gain direct access to the intelligence and experience of some of the most successful stock traders?In any event, this is one of three books by Schwager which have been highly praised by others. (I plan to review the other two, Market Wizards and The New Market Wizards, in the near future.) In it, he provides introductory comments on and then interviews of 15 stock market "wizards." For each, he offers clever as well as relevant phrases which differentiate them. For example, for Stuart Walton ("Back from the Abyss"), Mark D. Cook ("Harvesting S&P Profits"), Mark Minervini ("Stock Around the Clock"), and Claudio Guazzoni ("Eliminating the Downside"). Revealingly, although the 15 stock traders have significantly different perspectives on investment and (sometimes reluctantly) divulge different strategies, they seem to share certain common beliefs which Schwager characterizes as "Wizard Lessons." They include:
1. There is no single "truth."
2. Her or his trading style must be appropriate to each trader's personality.
3. Perseverance usually separates "winners" from "losers."
4. Great traders are flexible and resilient.
5. It takes time (probably many years) for a trader to succeed.
6. It is imperative to formulate a trading philosophy which integrates market concepts and trading methods.
7. Every great trader has a specific "edge." (What are your answers to the questions listed on page 301?)
8. Great traders develop and then sustain a high level of self-confidence.
9. Successful trading requires a FULL-TIME commitment.
10. Market "wizards" are bold and innovative but not reckless and impulsive.
11. They are willing to accept a loss while rigorously controlling risk.
12. They may view undervaluation as a necessary condition for purchasing a stock but never as a sufficient condition.
13. Their transactions are guided and informed by a trading model based on catalysts.
14. Market "wizards" pay at least as much attention to "when to get out" as they do to "when to get in"
15. Market "wizards" know themselves (warts and all), work very hard, trust their own judgment, constantly review/evaluate decisions, and are patient.
For about the cost of a breakfast at a restaurant in the Wall Street area, Schwager introduces his reader to 15 immensely successful stock traders and then allows the reader to "eavesdrop" on in-depth interviews of them. Schwager also helps his reader to compare and contrast their mindsets, strategies, and convictions. A value-added benefit is the provision an Appendix in which Schwager discusses "Options: Understanding the Basics." For novice investors, this book is an invaluable source of wisdom on HOW NOT TO THINK and WHAT NOT TO DO.
I presume to suggest that there is another audience for this book which Schwager may not have had in mind when writing it. I refer to those who are now involved in start-up preparations or who have already launched a new company. Whether or not an IPO is one of their objectives, they can learn a great deal of value from the "Stock Market Wizards" in terms of allocation of resources (especially human capital), "early-warning signs", and crisis management. To them I also highly recommend Rob Ryan's Entrepreneur America.
Rating: 5 out of 5
A traders book
As one of the included "wizards" I suppose my opinion is biased. But know this. It was because of Jack's second book "The New Market Wizards" that I got interested in trading. His newest book is every bit as good. These books are for the trader who wants to get to the next level of success. I was amazed at how much certain traders revealed about how they traded. There's no question that I'll be studying certain subjects that were discussed. All very successful traders have certain things in common and one is they're all very analytical. Jack has an ability to tap into how a person thinks about the markets. I found the book very motivational in that I feel I need to continue to perform at a very high level to justify my inclusion. Readers can see how great traders make decisions and ask themselves if they have the ability to be as decisive and disciplined as the top traders. I read "Stock Market Wizards" from cover to cover and consider all three of Jack's books along with others required reading. I've read his first two at least tree times. If you're a dabbler in the market, don't bother. If you're serious about making trading a living you have to own this work.
Rating: 4 out of 5
Worthwhile although not as great as first two
While I enjoyed this book and would recommend it to stock market investors, I didn't think it had the same depth and level of insight as Schwager's first two Market Wizards books, which I consider two of the most valuable volumes in my investment library. There were a few interviews that I liked, though, such as the one with Ahmet Okumus, the Turkish immigrant who buys quality stocks he thinks have been punished too much and will eventually turnaround. Furthermore, he sells puts on them when he thinks they're still overvalued for the options income, and if the stock declines to that level, he's actually delighted to have the stock "put" back to him since he really wanted to own the stock at that price anyway. This means he does exhaustive fundamental research and must be very accurate and confident in and of his valuation of the company for this to work, and his historical returns show he can make this work, too, as it significantly added to his overall performance. I thought that was an interesting strategy and an example of someone with a niche that they're able to exploit. I still found most of the other interviews worthwhile, though, and I would recommend this book to stock market investors since there is a lot of good advice about the pitfalls of investing there, too. Similar Products
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