Williams initially focuses on the recurrent seasonal patterns in the market. Williams reveals one interesting strategy where he notes that excellent times to go long the market are years ending in twos (e.g., 1952, 1962 ...... 1992) and threes. Just look at charts in those years or view them in this book to see those excellent buying points.
Williams also covers the best years of each decade to invest - fifth, eighth and ninth years. The consistency of these three years performance is 80%(positive returns in 8 out of 10 of those decade years). Next he covers the four-year cycle from 1858 to the present time (last 4-yr cycle years were 1994, 1998, 2002) showing that they were good times to buy at their yearly lows, many times occurring in the September/October timeframe.
Another strategy Williams covers in buying in October and selling in April. This strategy was offered by Stock Trader's Almanac in 1986 developed by Yale Hirsch, and it still works today. This strategy has produced significant returns while reducing risk as investors are out of the market for half the year.
Williams provides a look at indicators to determine that a market bottom is in place. He covers such items as the Fed's Stock Evaluation Model, margin credit, odd-lot short sales, Investors Intelligence Bull/Bear Index, US Bonds, and gold prices.
Williams covers in detail the fallacy of long-term investing and the devastation that it can wreak on investors portfolios. Investors who are die-hard "buy-and-holders" should read this chapter to learn that to use that strategy is dangerous.
To do well in the market, Williams urges investors to find stocks that have the capability to outperform the market, and then find the best time to buy them. He totally disagrees with the Wall Street cognoscenti that market-timing is useless.
He spends a chapter on buying stocks at a discount, and one on measuring investor sentiment on individual stocks. He lists seven traditional measures of value (e.g., P/E ratio, Price/Book) and elucidates on which ones work best.
All-in-all this well-written, easy to understand book provides investors with a systematic, time-tested approach to investing. Williams has again provided investors with another classic.
As with the response most will have once they have read this book, I had the same reaction to Larry when we first met. His sincerity and willingness to give and share with his readers his original research may at first appear to be promotional. Upon further reading of the book and further talking to him, one realizes he is genuinely concerned that the reader and listener at least consider the experiences and knowledge he has acuired and he is willing to share. His interest in the readers'trading welfare and success is for real.
Many other books in the investment area are written to promote the author and the information is a rehash of worthless information that others have offered before. Larry does not operate on this level. The value a reader derives from his book is many times greater than its cost.
This book is intended not only for the new, inexperienced trader, but also for the professional who has acquired his own methodology of trading. Larry information can fill the holes experienced traders may have in their trading approach.
I cannot emphasize enough the value associated with his work and anything he may write. He has enjoyed the benefit of being obsessed with the markets for 35 plus years and a reader is able at a small price to acquire a portion of this legend's wealth of knowledge.
I am not inclined to recommend anyone's book or research until I have researched the ideas and been able to accept their trading ideas as being reasonable and applicable to trading. In the case of this author, I can only write that it would behoove all traders to at least acquaint themselves with the work of this trading legend. You won't be disappointed. He has been an inspiration to me and my career and without his profound influence upon me in the early years of trading I would not have enjoyed the success in trading that I have.
1. Optimal buy points come in years ending in twos and threes, followed by the incredibly strong five years, then in the fall of any year ending in seven. Most major highs have come in years ending in nine and zero. pg 14
2. Every four years we expect a market bottom. Incidentally one should be looking for significant market bottoms in 2006, 2010, 2014.... pg 19/20
3. March buys in years ending in eights and September exits in years ending in nines gave spectacular results. pg 25
4. The Oct buy April sell % gain is significantly higher than the April buy Oct sell % gain. pg 33
5. Combining all the above, we should have a significant market rally in 2005 and another in 2006. pg 38
Up to this very day on Feb 2004 which is over nine months after it's publication, what the author said was by and large correct. There is no reason not to recommend this book to anybody who got the patience and the courage to place a high probability bet.
p.s. With respect to the trading philosophy part, I would like to quote something from the book for your reference. Hope you like them.
1. October. This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February. Mark Twain. pg 29
2. Markets dont top because sellers come into the marketplace. Markets top because there are simply no more buyers. Tom De Mark pg 50
3. The opposite of any generally accepted idea is worth a fortune to somebody. Francis Scott Fitzgerald Key pg 97