Reply to: stock market books

[SantaClaus]

Retail???
Last time i checked (towards the end of last year) you were giving it away

Dont know who you are and you dont know who I am, so I'm very puzzled by the above statement.

Go back and look at my predictions the other day on FTSE and Gold. They were both correct.

[Spacecadet]

I'm not threaded by the way. Just someone who gave up IT for retail trading from home

Retail???
Last time i checked (towards the end of last year) you were giving it away

[SantaClaus]

That is if you don't believe the stock market is just a series of Random Walks *
You are Threaded in disguise and I claim my 5 Corgi Lamborghinis.
There's always one numpty who doesn't understand epistemology

* am beginning to think this applies to the long run too. Whereas property isn't

Markets may be random walks, but its the turning points along the way I am interested in. Thats why I never trade breakouts, only retracements at good levels of support/resistance.

I'm not threaded by the way. Just someone who gave up IT for retail trading from home

[sasguru]

Yeah, that's right. By looking at charts during the credit crunch you will be quids in. YOU CAN'T FAIL!

In everything but Global Warming very wise you are

[sasguru]

Get a good book on technical analysis. Learn all about fibonnaci retracements, support/resistance, pivot points, price action, candelstick patterns.

But first decide if you are a position trader, swing trader or intraday trader.

Then ignore all advice given by the analysts and analyse the hell out of your stock charts.

That is if you don't believe the stock market is just a series of Random Walks *
You are Threaded in disguise and I claim my 5 Corgi Lamborghinis.
There's always one numpty who doesn't understand epistemology

* am beginning to think this applies to the long run too. Whereas property isn't

[shic]

i was kinda hoping for recommendations of books on trading that people have read and would recommend reading rather than walking into the nearest bookshop and picking up the first introduction to the stock market book i see..

It all depends what you want to know... I became interested in the markets, finance and hedging strategies in late November 2006, and started reading mid 2007. In no particular order, since then, I became better informed by reading these books:

J Hull - "Options Futures and other Derivatives" (Heavy going - theoretical)
N Taleb - "The Black Swan"/"Fooled by Randomness" (Insightful - readable)
J Galbraith - "The great crash 1929" (Interesting - anecdotal)
A Greenspan - "The Age of Turbulence" (Utterly Fascinating - biographical style)
E Lefevre - "Reminiscences of a stock operator" (Amusing - day trading related)
C Wood - "The bubble economy" (About the 1990 Japanese crash - poor literary style - fascinating material)
B Connolly - "The rotten heart of Europe" (About European currencies/economies - Eurosceptic but fair - I became mildly in favour of adopting the Euro having read it.)
D Smith - "From Boom to Bust" (About British Economic policy during the 80s and 90s - offers insights to 1997-2007 period too - IMHO.)

I'm still looking for credible texts on "technical analysis" (all mine are rubbish); monetarism; structured instruments (a definitive work should be published this autumn - I'm waiting) etc. etc. etc. I didn't feel I needed a basic introduction to the stock market - since, I felt, I'd already picked up most of the basics from broadsheets and web-searching any terms that bamboozled me.

This list of books is probably nothing like what you expected... but, as I mentioned above, it depends what you want to find out about. If you want to day-trade, you probably don't need to know much other than to "follow the crowd and stay mid-pack"... you're only gambling... if you want some deeper understanding, then you need to be familiar with currencies, politics, history, geography, economics, econometrics - and plenty more besides. A great little website I found on Forex was - www.babypips.com - which has a really informative "Forex School" section. I also can't recommend highly enough reading the educational series from the BoE and the national accounts from the NSO either... such documents gave me a good macro-scale perspective.

When it comes to understanding annual reports, you can't go far wrong by downloading them as PDFs - reading them (looking up what you don't understand) and questioning every detail until you do. BTW - show me someone who can assimilate all the relevant information from a FTSE100 annual report in 10 minutes, and I'll show you a charlatan. Annual reports are quite dense - and those who prepare it often have stock options - so it is in their interest to over-emphasise the up-sides and play down the risks... A balance sheet and P&L only shows a bare minimum of detail - far too little to base an opinion upon, IMHO.

One final note on "technical analysis" or "chartism" as it is sometimes known... it is all about market psychology... it possibly works OK in a bull market - some say it is a liability in a bear market - some say it was always astrological voodoo for simpletons anyhow. You pays your money and you takes your chances - if that's your bag.

If I had to pick favourite books, Taleb: Black Swan (best read after something explaining Black-Scholes and risk metrics - such as Hull... since Taleb sees himself as the nemesis for such beliefs... so it's best you grasp the mainstream view first.) Greenspan's wonderful explanation of a century of global economics is not to be missed, either... the world made much more sense after reading it.

Hope that helps.

Steve

[aceboy]

I admit i know very little but the extreme basics about stocks, shares etc.

I am curious about how it works though and would appreciate if the panel would recommend some books to begin to read up on the subject for a complete beginner..

What do you want to know about, the actual mechanics of the market, I.E. priceing, datat flowes, trade capture, settlement? or why markets move?

[DimPrawn]

Get a good book on technical analysis. Learn all about fibonnaci retracements, support/resistance, pivot points, price action, candelstick patterns.

But first decide if you are a position trader, swing trader or intraday trader.

Then ignore all advice given by the analysts and analyse the hell out of your stock charts.

Yeah, that's right. By looking at charts during the credit crunch you will be quids in. YOU CAN'T FAIL!

[SantaClaus]

Get a good book on technical analysis. Learn all about fibonnaci retracements, support/resistance, pivot points, price action, candelstick patterns.

But first decide if you are a position trader, swing trader or intraday trader.

Then ignore all advice given by the analysts and analyse the hell out of your stock charts.

[IR35 Avoider]

"A Random Walk Down Wall Street" is a classic, though any half-decent book will tell you the same things.

I read lots of recommendations for "The Four Pillars of Investing" in investing forums I hang out in, haven't read it myself yet though.

[Iron Condor]

Reminisicences of a Stock Operator.

Written in 1924 it is the greatest trading book ever written about the greatest stock trader who ever lived. Jesse Livermore. Shame he blew his own brains out, poor guy suffered from serious depression and they never had anything to cure it back in his day.

http://www.nowandfutures.com/large/R..._Livermore.pdf


"The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or the get-rich-quick adventurer. They will die poor."

[TimberWolf]

"Devil Take the Hindmost - A History of Financial Speculation"..

...

Beginning with the "tulipomania" that gripped Holland in the 1630s
http://www.amazon.com/Devil-Take-Hin.../dp/0452281806

[Alf W]

http://en.wikipedia.org/wiki/Liar's_Poker

[sasguru]

But overall aren't these 'experts' little better than monkeys throwing darts at a stock dartboard on average?

Correct

[sasguru]

All nonsense.
As several experiments have already proved, professional investment analysts do no better than a chimpanzee, or children who pick stocks randomly.

What you really need is an understanding of human psychology and past financial panics for which I heartly recommend

"Devil Take the Hindmost - A History of Financial Speculation".

I'm assuming you want to take advantage of volatility in the stock markets, predict the ending of future bubbles and so on.