5 comments about Fire Your Stock Analyst!: Analyzing Stocks On Your Own.

1. How can one be completely confident in stock analysts who didn't see the current crisis coming? Now in an expanded and fully updated second edition, "Fire Your Stock Analyst! Analyzing Stocks On Your Own" is a guide for those who want to save money and have faith in themselves to make wise economic decisions. Harry Domash, a MSN Money investing columnist, comes to readers with wise advice on stock trading, stating that with a little research, anyone can play the stock market on their own, without an analyst leeching their dollars. "Fire Your Stock Analyst!" is a choice and very recommended pick for those who look for financial success in stocks.



2. How many people do you know who have their own stock analyst? Probably not many, but how many have stock brokers? A lot. That's why this book should be titled Fire Your Stock Broker. This book is about analyzing stocks based on the author's experience and conversations with top money managers.
   
   The author places a lot of emphasis on investors being able to do their own research. Too many people rely on Wall Street analysts. The author says:
   
   "You won't fare well following analysts' buy/sell advice, but their recommendations and forecasts give you information about the market's enthusiasm for any stock and can help you qualify stocks as viable value or growth candidates."
   
   This book is pretty long, and some may find it too difficult to read. It should not be read in one sitting. This is a reference book that can be used by investors while analyzing particular companies. I recommend it to investors who pick their own stocks.
   
   - Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market



3. the best book to anderstand the fundamental ANALYSIS
   soo soo easy to use



4. Once I picked the book up I could not put it down. The book is well organized and fairly easy to follow. All the Websites are fairly up-to-date (meaning if he says yahoo is a good source for this information, it still is). I do recommend making a list of the criteria he goes through and listing the websites as you do it, that way you don't have to go back and reread the entire book.



5. Domash has done it. This is the book that covers everything you need to know abaout analyzing a stock. And that is what makes the book "the best" book on stock investing. Many say that Graham's Intelligent Investor is the best, but I think it is not, since although valuable all it does is giving you a bunch of screening criteria at the end of the day. This is coming from a person who knows the CFA curriculum inside out!!
   
   The book covers many areas from equity valuation to detecting financial shenanigans, from Porter's five forces to technical analysis. Of course, all of these subjects can not be covered in detail in a 300 page book, but beginners will find most of these information quite interesting and valuable. Experts and professionals, on the other hand, will not find a new info on this book, but they will still benefit from the presented methods and the system on analyzing stocks.
   
   If I have to add few negative comments here they are:
   
   1- Domash stirictly differentiates between a "value stock" and a "growth stock". So a stock can't qualify to be both. I don't believe any stock investment can be so black and white.
   
   2- Target price forecast: I would like it if Domash also covered DCF valuation models like FCFE and FCFF. But then it would be necessary to explain the concepts such as equity risk premium, WACC, growth assumptions, terminal value. It would have added maybe 30 more pages. Links between balance sheet, income statement, book value, dividends so on.. is not explained. A beginner may find some lose ends reading the book.
   
   3- Forecasting sales and margins requires a little better research I think. By just looking at the trend, analyst forecasts and saying "I am assuming that the company will not grow in 2002 but it will resume its growth in 2003" is not very well justified. But the idea clear only you have to do a better research.
   
   4- I would also like to see financial models done on a spreadsheet for demonstration.
   
   This list could go on but then I would be unrealisticly expecting too much from a 300 page book. So I will stop here. Nontheless, I don't say this cliche often, and I say it now. This is a MUST READ for any non-pro individual who is interested in equity analysis.

5 comments about The Neatest Little Guide to Stock Market Investing, 2010 Edition.

1. Having come from a software development background, I began reading the book to spark my interest in financial investments. I didnt really know what to expect. After reading this book, I am now able to keep up with stock tickers and stock analysts on MSNBC, Bloomberg, and Fox Business. I can read WSJ and Google Finance charts without feeling like I am reading another language. I've decided to highlight my favorite parts of the book:
   
   Speak the Language of Stocks:
   This chapter alone was the best. For someone without any background in stock markets, this chapter alone is the holy grail of the book. It tells you what stocks are, where they come from, briefly how to evaluate them, and distinguishing growth/value. Like i said before, if you have no clue what stocks are, this chapter will be the most important in the book and the author does a great job explaining it.
   
   How History Tells Us to Invest:
   Being a very technical person, I found the analysis in this chapter very interesting. The author advocates the importance of P/S ratios over the popular P/E ratio. He also goes over the criteria for valuing growth stocks vs value stocks and how using both strategies can maximize returns.
   
   The book's investment strategy is also very simple. The author supplies an abundance of research options for fundemental and technical specs you need to rank stocks. He also supplies worksheets, which can be printed from his website.
   
   For the beginner, this book is a great intro to the market. Give it a try!



2. Jasons books are very easy to read. Unlike some of the investing books, he actually breaks it down so anybody can understand how to interpret the stock market and individual stocks. He shows you how the pros do it, and then shows you different strategies that you can use to easily make money in the stock market. If you are a beginner or even a Stock broker yourself, read this book! Its such an easy read that I have read it three times and I learn something new everytime. I am also reading Intelligent Investor(not an easy read at all), and I use Jasons book as a reference when I am not sure what other books are trying to say.



3. I am new to investing and was looking for a book that would explain all the acronyms and other things I've never heard about and needed to know and give strategy advice that would work for a newcomer. This book did all of that brilliantly!



4. This was the first book I read on investing, and I'm glad it was. There are other equally valuable investing books out there, but none as clear and readable as The Neatest Guide. Kelly breaks down the seemingly complex world of Wall Street into layman's terms like no one I've ever seen. I'm convinced that if I had read any other book before this one, I'd have given up on the idea of investing, because I'd still be so confused. But because I read The Neatest Guide first, I was able to take the most important action in the life of any investor -- getting started.



5. I found Jason Kelly's 2010 Edition of The Neatest Little Guide To Stock Market Investing to be an excellent guide to investing in stocks. The background chapters were practically oriented with very interesting perspectives from well known investment masters. Lots of advice on orders, broker selection, measurements, research publications tools and agencies. Also Jason discusses approaches to screening and building a portfolio. I recommend this book as a valuable guide for investing in equities.

5 comments about One Up On Wall Street : How To Use What You Already Know To Make Money In The Market.

1. This is for sure the only stock market guide you'll ever need. Everything about this book is great! from the order of how everything was said, to the comedy in his words, and just the way he explained everything. It was very well done! This book goes in my top 3 best stock investing books. (The others are "The Intelligent Investor" by Benjamin Graham, and "Common stocks and Uncommon profits" by Phillip Fischer)
   
   Wishing you much success in your investments!!



2. This book was recommended to me by a friend as an introduction to fundamental analysis. I found it to be a fun read (Peter has a good sense of humor) and also very informational. The principles explained in the book are all very useful to anyone looking to invest or trade. I strongly recommend it.



3. This is a short book, but long on advice even, and especially, after the financial meltdown. It took me about 40 - 45 minutes to go through the book, but I'll read it again tomorrow and maybe again next week allowing the content to set in.
   
   The book is a fun read and gives novices, such as myself, some basic fundamentals and concepts before we rush in (again) to lose our money (again) while the big boys rake all the profits (again) in the casino we all know as the stock market. There is no specific advice in this book other than to spend as much time researching a stock as you would buying a new refrigerator; however I found the general concepts interesting and informative.
   
   But reader beware, even though the book is short Lynch does get the point across that choosing your own stocks is and making money is a combination of perspiration and luck. I've made the mistake of rushing in to buy a certain stock that was "hot", sometimes it worked out but mostly I lost money.



4. Okay, so you want to get started in the stock market, don't you? Maybe you need to remember that it is possible to still "value a business" and not just feel like after twenty years of good honest, intense "trials and tribulations" we are still getting screwed?
   
   Remember Lunch but don't jump in the game now if you don't know why I'm grounding myself in writing and reading and a wonderful weekend somewhere in America.
   
   Anyhow, I hope to speak with Paul Coffey the next time I'm town. I've been formulating a really compelling way of viewing the Bill of Rights and would be interested in what he thinks.



5. This book offers general concepts more so than specific technique. If you are looking for a book about the creature called "fundamental analysis," you may find the last half of this book interesting. However, if you want specific, practical advice you will be disappointed in the vagueness of the author. The only detailed bullets occur in chapters 15 and 17--all of 20 pages long, and even there the bullets are really just key points about indicators (things to watch for). How to calculate, how to interpret the value of, and where to find the indicators is left to the reader. Even, with his several page long description of price-to-earnings ratio (pp165-173), he ultimately advises, "Once again, your broker may be your best source for p/e analysis." (p. 170)
   
   20/20 hindsight seems to be his emphasis throughout. He offers many, many just imagine if... anecdotes--both supporting and refuting his advice. As a result, contractions invade throughout. For example, he calls "Whisper Stocks" a bad investment (pp 157-159). Okay. Then he regretted missing Cisco in 1990 when they were just a start-up. Why? Because looking back, he could have make $480 for every $1 invested (Intro). But wait, it was a "whisper stock" in 1990. He is against "diworsefication" (p 153), unless the stock price goes up afterwards (pp 154-157). Then he laments buying into an IPO with solid fundamentals and a smart business plan. Why? The expansion failed and he lost money (pp 180-182). Since most of the book is about finding young companies early (Street Lag, p 57) with solid fundamentals (ch 8-15) and taking a chance that they will grow maybe 10-fold (ch 6), his lament is lost on me.
   
   There are some saving graces to this book. The author does a decent job defending the importance of researching and understanding what a company does before investing. Frankly, there are better books out there about investing for beginners and experts alike. The financial advice industry has evolved over the past twenty years, and this million seller just doesn't stack up. I would recommend instead reading any Suzie Orman, Phil Town's "Rule #1," Bartiromo's "Use The News," or anything about Warren Buffet.

5 comments about How to Make Money in Stocks: A Winning System in Good Times and Bad, Fourth Edition.

1. This is a great book. It will turn many of the conventional nuggets of wisdom about stock market on their head. It is a fairly complete book. For an individual trader it explains the investing process well. The 100 or so charts at the beginning of the book are very valuable and informative. CANSLIM is the right system to follow in my experience as well. Probably the most important piece of advice in the book is the advice to cut your losses short at 7-8% from your purchase price of a stock. Most recently 3 follow through days in the market have failed. This book however says that follow through days which mark the beginning of an uptrend in a stock market are reliable about 80% of the time. No book, no investing philosophy can be perfect, thats why one needs to cut the losses short so that one can live to fight another day. Check out my blog at
   [...].



2. I accidentally published my post in the previous edition but the 4th edition (orange) is the one that I read.
   
   I found this book misleading and mostly unhelpful. I felt compelled to write a review that balances out the bogus 5 star reviews planted by the author or publisher.
   
   It's not all bad, but essentially, it comes down to:
   1) Buy only newer innovating growth stocks where earnings have been increasing 50% each quarter (Well gee that is so easy to find)
   2) Avoid solid blue-chip companies paying dividends.
   3) Use chart formations to figure out when to buy. He provides examples of chart formations but does not provide any interpretation as to why they work. Also, looking at his example charts, the chart patterns he points out are not always clear cut and obvious. In fact, sometimes on the same chart there will be a similar formation and it makes me wonder, "Well why not buy over here instead? How are these two patterns fundamentally different?"
   3) Sell all losers at 7% or 8%
   4) Don't use limit orders.
   5) Stay out of the market during bear markets.
   6) Buy near the stock price high.
   
   He goes through lists of stocks that increased hundreds of percents, but so what? Hindsight can always produce stock charts like this. The first 100 pages are stock charts of various companies from the 20's-80s that doubled or tripled in a few years. Supposedly we are supposed to study these to see how chart formations produce winners. And how often do these chart formations show up? He provides no answers, but it appears to be infrequently, especially when he shows a chart spanning 5 years.
   
   Overall, his system seems to lead to stocks that are "Hot" at the time. Stocks that tend to have big swings up and down such as Apple (which he mentions in several places in this book).
   
   Probably the only solid piece of advice is the stop loss, but these can be problematic at times, especially for volatile growth stocks that he recommends. Supposedly buying at the 'right time' with the right chart formation will virtually never hit your stop loss since almost always it runs up 20% from there, but it appears those lovely chart formations don't show up too often.
   
   Oneil doesn't provide proof (brokerage statements, or trade confirmations) that he has actually made money using his own "system."
   
   He loses credibility when he says to stay away from options because they are too risky. If used properly, options can be safer than buying the actual stock.
   
   This book is like 450 pages and it could be condensed to about 200 if he would cut out a lot of the fluff.
   
   He pushes the services of Investors Business Daily so much, I was thinking that I should have gotten the book for free for all the advertising I was exposed to.



3. This book does have some good info on when to buy stocks and when to get out. As others have noted hindsight is 20/20 so don't take all advice to heart. Charts are sometimes not explained properly and patterns don't really make sense... but overall I think he gives you decent advice like using cup'n handle + volume to buy -- though of course most of the time by the time 'heavy volume' hits the price is already maxed and not all of us can be day traders... the market is way too complex (or irrational) to be making buying decisions on simple rules. Nevertheless I still think O'neal's strategy works well in bull markets. For proof you can see the AAII website for well performing screens over the years.
   
   O'neal does advertise his newspaper & website. Personally I think it's a good website, especially if you're into stocks. The editorials as others have noted are totally biased but I don't really care about that. Sometimes they do get borderline racist. I complained once about an article and they took it off pretty quickly so I'm still subscribed.



4. I liked this book a lot. When I first started out reading books on investments, I didn't know where to start. I first red some books on Warren Buffett and then later on value investing. I didn't have a clue there was even something out there like growth investing. Then I ran in on this book and loved it immediatly. I did make the mistake of dropping everything I ever learned on value investing, and simply throwing away that knowledge. Later on, in the bull market of 2009 I had a watchlist full of value stocks and watched them rose in price, whithout doing anything about it.
   
   Anyway, back on this book. The author has done a great job in writing this one. Almost everything you will read in here is the opposite of most value investment strategies. His CANSLIM method is easy to use to select the stocks you want can buy. You don't just have to buy 'm and hold 'm, but rather use TA to select your entries and exits. Stops are always placed on a close % below the entry. Exits are also greatly described in his book.
   
   Please also consider the author his verified track record. It's amazing.
   
   This is one the very few books out there (I believe) has the potential to make you a millionaire, by applying it. His method is pretty straightforward and certainly not that complicated, but applying his rules is pretty hard to do.
   
   Something I've also noticed, after having done dozens of trades with his method, is that you absolutely have to use hard stops. A lot of these CANSLIM candidates have high beta's, and can easily fall with 30% to 50%. That's ok, beacause the upward potential is the same, but just wacht out while applying this method. If you're like me and you have the tension to ignore your stops, the losses can get pretty big.
   Also, buying stocks that rise in price with 15% or 20% and then holding them to sell them later with a loss is pretty devastating ..



5. If you plan to invest abroad the US, think twice before using this methodology. In some countries's markets, there is not such amount of information available. Also, IBD related newspaper is locally focus too.

5 comments about You Can Be a Stock Market Genius: Uncover the Secret Hiding Places of Stock Market Profits.

1. The author made learning of the dark corners of profit fun and easy. Can't wait to give some of the suggestions a try.



2. Don't let the dorky name fool you, this book is an very good introduction to Special Situation Investing. I could not put this book down. Greenblatt has a very entertaining voice that adds to the already interesting subject material. The book is written with the idea that anyone could pick it up and maybe learn something about value investing, but it also contains reams of information that would be useful to most any experienced investor with a value perspective. Greenblatt certainly gives you perspective as to where value is frequently found, and how an investor can take advantage of inefficiencies in the market.



3. 10:15 a.m. Tuesday 1 June 2010
   
   This book is obviously a STOLEN library book.... It has all the markings of a library....
   
   The book was a great read....
   
   Too bad for the other people who went to check it out only to find someone took it and sold it on the internet....
   
   Michael G. Mathis, [...]



4. I thought this was a really great book! I found it a very interesting read. I highly recommend!



5. Some of the other reviewers are right in saying this is an old and slightly out of date book. But it is such a good book, and it is very readable. I would love for the author to write a second edition. I dislike books that don't have a lot of references, and while this author has a few, the references I was hoping to get were ones that lead to further reading to understand how he arrives at his conclusion. Continually throughout the book he tells you that he is not covering the complex stuff for simplicity, and that is fine, but I would like to go over some of those fine details or at least reading material that teaches me how to go over those fine details,
   
   Every section would require vastly more knowledge than was given in order to apply in real life. A second edition is really needed. But in the end I was very happy to have read this book. A word to the average investor out there though, this book is meant only for full time investors...........people who spend less than an hour or two every week on their investments should not even bother with this book. This book was not meant for the career orientated, don't have time for much type of person.

5 comments about Reminiscences of a Stock Operator (Wiley Investment Classics).

1. This book was written in 1923 and to this date remains one of the best books on stock investing ever written. Its a fun read. I have listened to this book as an audio book as well, and I have to say that Rick Rohan has one of the best voices in audio books. You can listen to a preview at [...] and decide for yourself. (You can click on the audio icon below the symbol for book and listen to audio clip)
   
   The book is still relevant because the stock market is human nature on daily display and human nature will never change.
   
   Some of the priceless pieces of advice in this book are -
   
   Study general conditions affecting the market or economy
   Study the tape (stock prices) to decide when to begin to buy a stock
   Begin to accumulate your line at exactly the right time which Larry Livingston (pseudonym for Jesse Livermore) refers to as pivot points
   Let the market tell you when to take profits or cut your losses short
   Be continuously bullish in a bull market 'Its a bull market you know'
   
   I could go on and on but then I will never finish.



2. Although this book was written in 1923, much of what it contains is ageless advice for investors. As the protaganist Livermore himself says in the book, nothing has ever really changed in the stock market. As evidence, he cites anecdotes from as early as 1867! There is nothing specific in here for anyone, and little of fundamentals, but for those interested in the human or psychological side of the market, this book will prove invaluable. Livermore was one of the greatest traders of the early part of this century...mostly known as a short trader. He was a kind of momentum trader before that term even existed. The book consists of series of observations and stories by Livermore related to his friend LeFevre, the author. You will feel as if you are sitting across the table from Livermore drinking coffee or beer, enjoying many tales of how to trade in the market. Although short on specifics, the book is chock full of advice on how to govern oneself and anticipate movements in stocks. Some examples....Livermore never took tips from anyone else, and never trusted them. He states many times that each investor should develop their own system, and stick to it. The sticking to it is the most important part...as evidence he cites a colleague with a system radically different from his, who was also successful, who went away from his own system at a critical time and lost millions. He also gives the readers a great exposition of his own system, which started out strictly as what we might call day trading on technical indicators (what he calls "watching the tape") but was greatly strengthened when he also learned to factor in fundamentals (what he calls "the big picture"). This is a very good, well-written read with many amusing anecdotes as well, such as the time his wife tried to trade without his knowledge or the tale of caution regarding two traders who insisted on believing "inside tips" to their great harm. Livermore at the end of the day was more speculator than investor (as he freely admits), and he never could seem to quit. He made millions and lost them over and over again...although when he died he was worth $5 million, we learn from this book that this was only because he put a few million in trust funds that he was not allowed to touch under any circumstances! Although he suffered from a "gambling fever" approach that he never could quite escape, he did in fact "know himself" well enough to make millions, over and over again repeatedly. For those wanting well-written insight into the human side of the market sprinkled with interesting and often amusing anecdotes, this is a MUST READ.



3. In the awkward and werid markets we've had in the last year and half or so, I decided i would start investing in stock markets after doing it for awhile when I was in high school and stopping for three years in high school. I was no amateur, but I was no professional either. I started off with 2 thousand dollars and got killed in the market, buying long and selling it after a point or two, holding onto a stock as it took a nose dive, consolidating, all the stuff I'd trained myself not to do when I was working with a professional trader "a friend of my mother's," after school on my senior year. I picked up this book, it was always in my collection, but I wasn't paying attention to it, and hadn't read it.
   
   I read it straight through. All the happening advice, all the small anecdotes, eventually built up my ability to understand the market. One statement in particular came striking back at me, with the stock STEC which I got into at 23, watched it spring up to 43 (mind you, 8 other stocks had failed by this point, but I'd learned to cut my losses short) and sold it at 38. I knew there was something wrong about it, it's moves jerky, it's actions wrong. It was unhealthy, something was up, the owners had dumped their stocks a month before, and I remembered what Jesse Livermore said, "If I shouldn't be long in it, I should be short in it," or something to that extent, and I bought puts in the stock at twenty four, after it broke it's 28 low, and I watched it drop in a very short time to 14 dollars amidst scandal and then inch down to 11. It was a great day for me and it was all because i read this book and remembered those little ideas (though lucky for me the trade turned out better than his, when he was taking someone elses advice).
   
   I made enough money to pay for my last year of college. A few other books I read:
   
   Stan Weinstein's Secrets for Profiting in Bull and bear Markets
   Martin Zweig's Winning on wall Street.
   Van Tharp Trade Your Way to Financial Freedom
   Gerald Loeb The Battle For Investment Survival
   All of William O'Neil
   All of Nicolas Darvas
   Michael Covel Trend Following
   The Five Rules of Successful Stock Investing
   Benjamin Graham The Intelligent Investor and Security Analysis
   Philip A. Fisher Common Stock and Uncommon Profits
   
   These books helped me develop a winning strategy that I hope will make me a good deal of money.



4. Watch Video Here: http://www.amazon.com/review/R38R5P3IZM6IG9 This book is a timeless classic. Written nearly a century ago, traders are still learning the same lessons today and the only book of its kind handed down over the generations.Reminiscences of a Stock Operator (Wiley Investment Classics)



5. This is among the books, if not the only one, that got me started in trading. So many reviewers have said more than I can. My feeling is if after reading this book you do not like it, then the probably is close to certainty that trading is not for you. It's been many years since I read the book and I still have to find what the book missed in terms of markets and market participants.

5 comments about The Little Book That Beats the Market (Little Books. Big Profits).

1. This book is fun to read, but has very little actual information. The whole book is dedicated to a single simple trading strategy. Joel's Magic Formula.



2. I expected a lot before reading this book but almost everything was covered in the video introduction in the website which I had watched before. I find it not really worthy buying and reading ~150 pages page by page. ok for a quick screening.



3. This book was recommended to me by an acquaintance after I mentioned that I wanted to learn more about investing. I had high hopes from the first chapter, but came away disappointed. Greenblatt is overly simplistic at best and a snake oil salesman at worst.
   
   From a purely stylistic standpoint, I found the book annoyingly pedantic. Greenblatt uses frequent stories about his children and fictitious business examples to illustrate major ideas. I found it refreshing at first, but the metaphors wore thin after a few chapters. I couldn't help but wonder "Why not use a real business as an extended example instead of a fictitious gum company run by a child??"
   
   On more substantive points, the underlying financial theory of the book is incoherent. I'll grant that the "magic formula" could be a useful heuristic for identifying possible value stocks, but its usefulness ends there. There are lots of other simple measures for testing the financial health of a company that Greenblatt completely glosses over. Furthermore, there seem to be some major contradictions in his approach to the market. He counsels that patience is necessary for the magic formula to work, but also suggests selling stocks every 12 months!!! The end of the book turned into a sales pitch for his website, which I found smug. (On page 135, he even writes: "Step 8: Feel free to write and thank me").
   
   In sum, there are much better titles out there for beginning value investors. Christopher Browne's "The Little Book of Value Investing" (published as part of the same Wiley series) presents related ideas without annoying hyperbolic examples or the rhetorically dubious promise that one "magic formula" will beat the market.



4. In some ways, the average investor is like a man looking for the right combination to get at the riches in a vault. Unlocking the market's treasures - knowing which stocks to buy and sell - is a difficult mystery seemingly beyond his powers.
   
   Joel Greenblatt is the founder and managing partner of a private investment firm called Gotham Capital. Since its inception in 1985, Gotham, with Greenblatt at the helm, has compiled one of the most astounding track records in the history of investing. He's earned annualized returns of 40% since 1985.
   
   That's a truly ridiculous track record. Basically, a $10,000 investment in 1985 comes back as nearly $12 million by the end of 2004!
   
   Greenblatt is one of the all-time greats, even though, strangely, he is not all that well known among casual investors. Certainly, his fame is nowhere near Warren Buffett's or Peter Lynch's. Yet his record speaks for itself. Clearly, here is a man worth listening to.
   
   He's already written a good book on investing titled You Can Be a Stock Market Genius. Despite its clownish title, this was an important contribution to the investment literature, as it dealt with special situations - such as spinoffs - and showed how and why such investments often worked out. It fleshed out, and brought to a wider audience, a set of strategic options previously known only to Wall Street insiders and certain enthusiasts.
   
   Well, Greenblatt has done it again. In The Little Book That Beats the Market, Greenblatt divulges his own magic formula - a strategy that has, over the last 17 years, returned 30.8%, versus 12.4% for the S&P 500.
   
   The basic goal of Greenblatt's screen is to find good companies at bargain prices. To do that, Greenblatt relies on two basic ideas - both concepts used by value- minded investors for decades. Greenblatt puts his screen to the thousands of stocks on the market today and ranks them, highest to lowest.
   
   As Greenblatt writes, "If you stick to buying good companies (ones that have a high return on capital) and to buying those companies only at bargain prices (at prices that give you a high earnings yield), you can end up systematically buying many of the good companies that crazy Mr. Market has decided to literally give away." This is a remarkable result. Greenblatt has added yet another tool to the investor's tool kit.
   
   It requires patience to stick with Greenblatt's idea, something else the average investor doesn't have a lot of - and that's being charitable. As Greenblatt readily noted, the magic formula doesn't work every year. There are times when it will lag the market. But this is a good thing, in a way, because such underperformance will tax most investors' patience and they will abandon the formula before it really has a chance to work its magic.
   
   Review by a writer for Agora Financial, publisher of economic and financial analysis including Financial Reckoning Day Fallout: Surviving Today's Global Depression, The New Empire of Debt: The Rise and Fall of an Epic Financial Bubble, and I.O.U.S.A.: One Nation. Under Stress. In Debt.



5. 7/9/10 Update: So how has the 5/4/2010 MF stock screen ($50 million market cap) held up through the recent market turmoil. Based on 5/4/10 opening prices you would be down -16.3% versus -8.81% for the S&P500 (cap weighted). Only three stocks are posting postive returns + 4.3% combined. The combined return of the stocks I removed due to having PEs less than 5 is -18%. A better benchmark might be something like the Vanguard Small Cap Value index which is down 12.45% over the same period. Also currently the combined earnings yield for this portfolio is 10.53% (based on TTM earnings). That's 3.48 times the return on a 10 Yr Treasury note currently yielding 3.03%. And that's a 23.74% increase in yield since 5/4/10.
   
   Joel Greenblatt, a reputedly successful value investor, recommends that you run a screen off his website based on value criteria which he explains in his book. Based on this screen you buy the stocks without performing any further due diligence. Ok so I ran his screen yesterday May 4th, 2010 and these are a few of the stocks that came up. Would you buy these stocks?
   
   BDSI, PE 2.2, is a tiny biopharmaceutical which showed up in yesterday's screen. Just reviewing the news releases on it I learned it received a going concern qualification from its auditors which means there is substantial doubt on the part of its auditors (CPAs) that it will survive the next twelve to fifteen months. To his credit he says you "may" want to eliminate any stocks with PEs under 5 as that may be due to unusual results in the prior year.
   
   Another company TRMS with a of PE 4.35 is yet another tiny little biopharmaceutical company whose revenues have plummeted from $47 million in 07 to $15.18 million in 09. It looks like most of its 09 income came from a $12 million reverse termination fee paid to for a termination agreement with Arigene Co, Ltd. Otherwise it would have had earned close to $0 net income for 2009! Yes, this has a PE of less than 4 but Greenblatt made eliminating these optional.
   
   USMO is another company that came up in yesterday's screen. Its revenues have dropped from $618MM in 05 to $289MM in 09. It's still selling at nearly 2X book value. I calculated the ROC as Greenblatt describes and yes for the past five years its generated 30% plus return on capital but that's partly because it has very little equity and till 09 had no retained earnings. I was actually puzzled by this so I dug into its 10K. In 07 and 08 it declared a net loss but rather than reporting a retained deficit, they reclassified the net loss through the statement of stock holders' equity against APIC, which partly explains why APIC (the additional equity/capital paid in by investors)has been shrinking, although it's also explained by the share repurchase program, which is a positive. Still you have to wonder about a company that can't generate retained earnings. Finance rather than the Sales and Ops teams seems more responsible for generating the impressive ROCs. The stock has lost half its value since 2005, pretty much in line with its drop in revenue from $618 million to $289 million. It has perennially underperformed the NASDAQ despite the impressive ROCs throughout.
   
   SNTS another company that came up in yesterdays screen is running an accumulated deficit; meaning to date it has only consumed investor's capital, let alone provide any return on it. And what kind of company is this, a biopharmaceutical. The company never had positive operating cash flow till 2009 which was due to one $20 million down mileston payment from it's marketing partner Merk. Last month a court over turned five of it's patents for "obviousness."
   
   SNTA, PE 6.6 (forward PE 55!), came up in the magicformula screen. SNTA is a biopharmaceutical drug development company. It had a loss for Q1 10, and is projecting a loss for all of 2010. In fact it looks like it's only ever had one positive quarter ever and is voraciously chewing up capital through its R&D line. Where is the return on capital? How is this a magicformula stock? Why is this showing up in Greenblatt's screen?
   
   If you just ran this screen and decided to buy all 30 stocks, you would be overweight in biotech which is a very risky sector and which is well known for letting investors down. You are not diversified, even if you own 30 stocks, if a good portion of them are in one sector. Also do your due dilligence; take Greenblatt to his word and check stocks with PEs under 5. You can learn a surprising amount just by reviewing recent news releases. Also don't be intimidated by the 10K. These are easily accessible.
   
   One other problem is that Greenblatt advises buying the top ranked 5 to 7 stocks, except that his screen does not provide their rankings. In addition Greenblatt is pushing visitors to his site towards his forumlainvesting funds. I'm wondering if this was part of his grand design from the beginning. He's a billionaire for reason.
   
   The list of stocks in the May 4th screen (Market caps greater than or equal to $50 million) : OSK SNTS PPD SMED IMMU UIS CEU ONTY TTT UNTD DLX PRSC EME CNU UEPS WTW AMED SOLR LO CHKE VSNT APOL ABC JCOM SVA CBPO
   I removed those stocks with PEs less than equal to 5.

5 comments about Stock Investing For Dummies.

1. Keeps things fresh and avoids being dry. The author was great at making you feel like your reading something with personality rather than a stocks rule book. 5 stars.



2. The book is decent as a 30,000 foot overview of the mechanics of buying stocks.
   
   That said, I would not touch it with a 30 foot pole if you do not have a good basis in macroeconomics. Its important to have an idea of how the economy as a whole will do, because you'll pick different investments if the economy is expanding than if it is failing or going into deflation. Instead of educating you about the major macroeconomic theories and then telling you why his is best, he treats the majority theories unfairly to try to convert you to his (very minority) view by default.
   
   Of the two best-supported theories of macroeconomics, he doesn't mention one (the Chicago school) and spends his time distorting and engaging in fifth-grade name-calling about the other one (Keynesianism). For instance, he takes Keynes quotes out of context and attributes to Keynesians actions taken by Chicago economists. The author does not, however, critique his own theory, Austrian economics, at all - which is a problem since one thing the vast majority of the economics profession will agree on is that Austrianism is inconsistent with itself and makes empirically incorrect predictions.



3. I knew very little about the stock market before I read this book (only what I learned in High School). I read it from cover to cover and it is very informative covering what I believe is all the bases. Some topics were covered more in depth than others. An example is discussing what options are, but not going into incredible detail about them. However, the author cites several web sites and other books that one could read to understand more about any subject that he covered. The focus of the author's strategy is more fundamental analysis than technical analysis. Both are discussed, but fundamentals are stressed. After having read it, I would describe it as a reference. Each section is self explanatory and when needing answers, one could skip to that page/section and understand it without having to read previous chapters (although that does help). I am still not an expert, but I feel I know enough to begin a small portfolio and start my retirement now.



4. If you have no clue at all about stocks/investing, this might well be a good starting place. It is a very easy to read book, well written and informative, but it does start right at the basics and only takes you a little way up the ladder of knowledge.



5. Well written, does not bore. If you want to invest in stocks a must read for beginners and novice. You have no idea how little you know until you read this. Lots of helpful resources in there as well.

4 comments about Equity Asset Valuation (CFA Institute Investment Series).

1. I teach Investment Analysis & Portfolio Management to undergraduate Finance majors and have found this book to be very effective in teaching equity valuation models from a fundamental analysis standpoint. There are many specific valuation examples used throughout the book making it very useful for Finance students learning how to implement intrinsic stock valuation. Although the concepts are considered intermediate-level Finance topics, the language of the authors is easy to understand and not too difficult to grasp.



2. This book is the same book with a different name. The first edition was called "Analysis of Equity Investment Valuation." After reviewing the table of contents as well as several chapters, I have the following to report: The Table of Contents is the same; and the rest of the book is the same, too. The pages don't exactly match because in the new book the block paragraph style has been chosen.
   
   You do not need this book for the CFA. If you call the Institute, they will tell you not to purchase the source books because the program has been tailored specifically for the candidates. Instead, the Institute mandates that you buy the "program".
   
   If you really want the book, then buy the old version for a fraction of the cost. The content is the same.



3. This was one of the better finance books I've come across and a definite keeper for reference. Instead of mindless rambling or chocked full of jargon, the material was concise yet contained enough detail to cover all aspects of equity valuation that one might need to know suitable for the CFA Level II prep. But even for laypeople who have no intention of taking the CFA, this book will be very easily understandable with just a rudimentary background in basic finance theory.
   
   The layout is very logical, basically covering the four important aspects of equity valuation: DDM, Free cash flow models, price multiples, and residual income. Under each of these, the reading builds up to form a bigger picture of what needs to be understood. Examples are very clear and do not rely on specific methods of solving, such as being only relegated to math equations, spreadsheets, or financial calculators. You basically can approach any of the problems in whatever way you want. The emphasis is on understanding rather than route "do it my way" methods. The book appears to have been very well proofread, so you don't find numerical errors that can make you pull your hair out as with other books.
   
   There is also a workbook for this series but at my time of writing, it has yet to be released. When it is out, I would give this book series six stars in strength.



4. It is an extremely important reference book because I am preparing for CFA Level II exam. I've found the book an introductory one to illustrate basic concept in investment industry. Any one who wants to enter the investment banks,mutual funds,asset manangement corps. should have this book in hand.
   
   I strongly recommend it to all candidates on the road to getting CFA charter, and other partitioners in investment field may also find it helpful.

5 comments about Trading in the Zone: Master the Market with Confidence, Discipline and a Winning Attitude.

1. I thought I would take a moment to review one of my all time favorite t investment books, " Trading In The Zone", by Mark Douglas. This is actually the book that helped me start making money consistently in the markets. Before reading this book I was very inconsistent in making profitable trades. If you are like me, you may have some trading behaviors that you are not too proud of and have not served you well such as; getting in too early, getting out too late, being indecisive on if you should get in or stay out.
   
   Do you know what it feels like watching a profitable trade go down the drain because you did not exit when you should have?
   
   I have traded stocks, futures, forex, and options. The forex and futures markets can move so fast they can make your stomach turn. These markets are not for the faint of heart as they can beat a trader to near death and to the point where you will become afraid of your own shadow! I got my battle scars to prove it.
   
   This book definitely helped me get my trading act together to where I finally started making consistent profitable trades! It does not matter if you prefer fundamental or technical analysis, as this book focuses more on you the trader. It gives a great overview on why many traders consistently lose money while good traders consistently make profitable trades. More importantly, Trading In The Zone gives you the knowledge to replace fear with confidence in your trades and ability to make great trading decisions that will move you from the loosing group to the successful group of traders.
   
   I never make a trade without being in the zone! This book is worth every penny and makes for one of the best investments I have ever made. In fact, I have more than made my money back plus many thousands over from trading in the zone. Another easy and fun read that definitely took my trading game to the next level.



2. The author effectively articulates his approach to trading. He describes how to develop a mindset with which to trade in the market in a structured and unemotional way. You might experience the book as cognitive behavioral therapy.



3. If you ever want to make money in trading, than you must read this book first. I started trading thinking it was easy. After losing all my money I couldn't figure out what happened. Than I read "Trading in the Zone" and realized my emotions got the best of me. So now I am more in control and already started to make my money back. Every new trader should read this book before opening any live accounts. You have two options: 1) Trade-Make Money 2) Trade-Lose Money. Option 1 is what this book teaches you. Get your copy now. You will not regret it.



4. Very hard to understand , alot of jumbo mumbo but get very little information. Wasting alot of time



5. Pretty good book, with some good points. But honestly, it could have been written in an essay rather than a book.