A Bit More Bull

Bear Mountain Bull Annex/Archives

Adventure Capitalist September 30, 2010

Filed under: Recommended Reading — BMB @ 11:26 am

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Adventure Capitalist by Jim Rogers

When you need to take a break from the stock trading and chart watching books listed elsewhere in this section, pick up Adventure Capitalist. Ride with Jim Rogers as he takes you on a journey around the world that you will never have the opportunity, resources, nor (most likely) the guts to take yourself.

Rogers circles the globe, driving (yes, driving) a custom Mercedes and trailer through 116 countries over three years. His book provides a truly fascinating account of his travels though those countries—of the food, the people, the cultures, the history, the politics and the economics. And this isn’t some guided tour, with fancy hotels along the way. The trip is filled with difficulties, ranging from stubborn border guards and uncooperative boat operators to civil wars.

Rogers invests his money all over the world, but is not content to manage his investments from his office. He prefers to get a firsthand look at what’s really going on in the various areas of the world where he either has invested money, or is thinking of investing. You will learn quite a bit about simple economics through his examination of a country’s financial condition, why some countries are doing well and why others are not. His diary of the trip (amazingly, not his first!) provides an extremely unique perspective on the rest of the world, including many countries that you and I would probably never even think about visiting.

BMB found Adventure Capitalist to be not only enjoyable, but very educational as well. Give it a read—then see if you can put it down without wondering what adventures await you in the next chapter!

 

Bollinger on Bollinger Bands September 26, 2010

Filed under: Recommended Reading — BMB @ 2:22 pm

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Bollinger on Bollinger Bands by John Bollinger

You may have seen Bollinger Bands displayed on charts before, or seen them in the list of available indicators on your favorite charting web site. If you have seen them, it is somewhat obvious that they are drawn to enclose most of the price movement on a chart. But if you are like BMB, you probably wondered just what these bands were supposed to tell you, and how you were supposed to use them!

Well, no better way to learn than from the guy who designed the bands, John Bollinger. Bollinger Bands are quite simple in construction, but are very flexible in their use, offering a number of different ways to look at them and trade off them. Bollinger’s book describes those methods, along with the his reasons for designing the bands, and his opinions on other indicators that can be used in conjunction with the Bollinger Bands.

One refreshing theme that Bollinger offers throughout the book is that every investor find what methods or systems he/she may be comfortable with. Everyone has different needs, and all situations are not equal – it is important that an investor develop their own style that he/she can work within. You will find his book interesting and easy to read, and hopefully it will encourage you to experiment and find an investment style that works for you!

 

Dave Landry September 25, 2010

Filed under: Recommended Reading — BMB @ 9:10 am

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Dave Landry On Swing Trading by Dave Landry


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Dave Landry’s 10 Best Swing Trading Patterns and Strategies by Dave Landry


BMB has been a fan of Dave Landry for quite some time now, but has been remiss in getting his books up here in the recommended reading section.

We promise we’ll get more info up on these books soon. In the meantime, Dave’s third book, “The Layman’s Guide To Trading Stocks” is now available! See our review here.

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The Layman’s Guide To Trading Stocks by Dave Landry

 

Hot Commodities August 11, 2010

Filed under: Recommended Reading — BMB @ 2:33 pm

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Hot Commodities : How Anyone Can Invest Profitably in the World’s Best Market by Jim Rogers

Jim Rogers, author of Adventure Capitalist and one of the smartest investment minds around, offers up his opinion that the next secular bull market is already underway. But this bull market isn’t in stocks — it is in commodities.

There have been bull and bear markets in commodities through the years just as there have been in stocks – and interestingly enough, the cycles in the two asset classes tend to occur opposite one another. The last bull market in commodities ended in the early 80s, when no one wanted to have anything to do with stocks. Now, a couple of decades later, we find ourselves in a transitional period following one of the biggest bull markets that stocks have ever seen – and very little attention is being paid to commodities.

What are commodities? Commodities are things – food, fuels and raw materials that are either cultivated and grown, or extracted from the earth. Unlike stocks, commodities are things you can actually touch and feel, and they’re becoming more and more valuable every day. Why? As Rogers explains, the reason is simple: the age-old economic principle of supply and demand.

During the stock bull market of the 80s and 90s, commodities were in their own bear market. As prices of commodities were dropping, many people and companies that were in the business of supplying those commodities were getting out of the business – the lower prices just didn’t make it worthwhile.

In Hot Commodities, Rogers says those days of low prices are over, at least for the next 15-20 years (he presents evidence that the bull/bear cycles last approximately 18 years). He says, particularly with the growth in certain areas of the world like China, that demand for commodities is increasing — but supply remains low, due to the lack of investment in exploration and production during the 80s and 90s. Increased demand and reduced supply means higher prices, and price increases in commodities like precious metals (gold, silver), base metals (copper, aluminum), and crude oil over the past year or two give ample proof that the author is right.

Rogers describes the futures markets where commodities are traded worldwide, and lays out the supply and demand case for a few specific commodities, things like oil, gold, lead, sugar and coffee. He gives the investor some ideas on how best to play the commodities markets, be it through one of a very few commodities mutual funds (including Rogers’ own commodity index fund), investment in the futures markets or a managed futures account, or by buying stocks of commodities related companies. He also points out that the lack of investment vehicles available to the public, like commodity mutual funds, is evidence that this asset class has been completely ignored, and likely has a long way to run!

If I were you, I’d listen to what Jim Rogers has to say. Highly respected among those in the investment community, he was able to retire while still in his 30s. Seems to me, he probably knows what he’s talking about!

There’s more to investing than just stocks and bonds. As an investor, you owe it to yourself to read the book, learn about commodities, and decide which method of investment in this asset class might be best for you. Don’t ignore the bull market that no one is talking about…

 

How to Make Money in Stocks August 7, 2010

Filed under: Recommended Reading — BMB @ 2:19 pm

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How to Make Money in Stocks by William J. O’Neil

While at times you might think this book is simply an advertisement for Investor’s Business Daily (ok, it is – it just so happens that O’Neil is the founder of IBD), that doesn’t really diminish the message the book intends to get across: buying stocks that are both fundamentally and technically strong is a good way to make money!

O’Neil presents the CANSLIM system: CANSLIM is an acronym – each letter stands for a particular rule that a stock must satisfy to qualify as a good buy under the system. I agree, the whole thing sounds a little funny, but it’s hard to argue with. The CANSLIM method looks for stocks that have strong earnings histories, are acting well technically, are leaders in their industries and are in strong markets. Seems obvious to you? I’ll bet you don’t do that much research on every stock you buy!

And there’s more: O’Neil lays out the nineteen common mistakes most investors make (at the very least, every investor should read that!), helps you to understand when to sell your stocks to either cut losses short or preserve profits, and teaches you how to read charts to help you improve your trade timing.

Even if you don’t follow the method exactly, the investing principles presented in this book are extremely sound. You would do yourself a great deal of good by reading this book – it will give you some important questions to ask yourself the next time you’re comtemplating a stock purchase.

For more on the CANSLIM system, check out Canslim.net.

 

Intermarket Analysis August 5, 2010

Filed under: Recommended Reading — BMB @ 12:30 pm

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Intermarket Analysis – Profiting From Global Market Relationships by John J. Murphy

If you invest in stocks, understanding the forces than influence stock movement can be of great help to you in making investment decisions. Some of those forces are movements that take place in other markets – namely bonds, commodities and currencies. John Murphy, highly regarded in the technical analysis field, is one of the pioneers of intermarket analysis, i.e., how the various markets are interrelated and how they influence each other.

Murphy’s book is a follow-up to his first book on the subject of intermarket analysis (Intermarket Technical Analysis : Trading Strategies for the Global Stock, Bond, Commodity, and Currency Markets, 1991). He describes intermarket relationships during the period from the 1980s through the fall of 2003, during which some of the market correlations presented in his first book actually changed (read as: he kinda had to do a follow-up!). Murphy attributes the change, with stock markets becoming decoupled from bond markets, to the deflationary environment that began in the late 1990s with the severe downturn in Asian markets and currencies.

Murphy does a very good job of presenting the material in an easy-to-read, easy-to-follow style, with many accompanying charts and graphs. The book is nicely organized, with each chapter examining intermarket relationships during a different significant time in the markets, times during which either the market movements themselves were notable or other world events had an influence on them (e.g., the 1991 Persian Gulf War). He also explores other important relationships, such as the one between gold and the U.S. Dollar, and discusses the economic cycle model as well as the sector rotation that takes place within the stock market itself.

If you would like to understand market movements from a larger economic perspective (or if you’ve never even given a thought to investing in markets other than stocks!), BMB believes you will find this book quite enlightening. Murphy’s one of the best, and he’s given us another great book to learn from. On the downside: this book isn’t exactly cheap. You might try to get a good price on a new or used copy somewhere like Amazon, or check to see if your library has it. If they don’t, ask if they might be willing order it or if they have a program by which they can borrow books from other libraries.

You can sample this book by reading an excerpt from the first chapter of this book here (PDF format).

 

Layman’s Guide To Trading Stocks July 17, 2010

Filed under: Recommended Reading — BMB @ 3:15 pm

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The Layman’s Guide To Trading Stocks by Dave Landry


This book is now shipping — you can get it direct from the publisher as well as from Amazon.

8/6/2010 — This book is due out soon, and is currently available for pre-order — get the e-book today, and hardcover when shipped.

When Dave Landry began writing his third book, he set out to write what he thought was going to be a beginner’s guide to trading, one for ‘the layman’. But that plan changed over time. Landry explains in the preface of the book: “As I watched more and more people lose money in one of the greatest bear markets in history, I felt compelled to add more and more information. The basic book that I had envisioned soon ballooned into much more.” Indeed, Landry’s finished product is a complete guide to not only his trading methodology, but to his attitude and philosophy on trading as well, suitable for the beginner and experienced trader alike.

The book is divided into two sections, labeled ‘First Steps’ and ‘Taking The Next Step’. The first section is, as the name implies, geared toward the beginning or novice trader. But right from the start, the book goes beyond the initial steps of helping one to recognize good trading opportunities in Landry’s trend-following/pullback style, and helps the reader to ‘think’ like a trader, first by trying to dispel some of the well-entrenched Wall Street myths, and then later by delving into trading psychology. That psychology is, in my opinion, one of Landry’s strong suits, and one that many technical traders tend to either gloss over or ignore completely.

Often, traders of all types emphasize the methods, but overlook the importance of psychology in trading. If you follow Dave Landry’s work at all, you know that psychology is always part of the discussion, and that a big part of becoming a successful trader is learning how to keep your head on straight and your emotions in check — and dealing with the fact that the market is going to smack you around now and then. You can count on Landry to help you out a great deal in that area.

In the chapters where he uses charts to demonstrate his trading methods, he keeps the number of examples to a minimum, rather than filling the pages of the book with chart after chart showing the same setup over and over again. He also wastes little time in getting to important topics like money management and position sizing, and stresses the use of protective stops, all of which should be a fundamental part of any trading method. When it comes to placing stops (“as much art as science”, according to Landry), many trading books are more than willing to talk about which stocks to buy and what chart patterns to look for, but the idea of setting stops and planning an eventual exit from the position is often saved for a quick mention near the end of the book, or is neglected entirely. Landry makes it an integral part of the trading process.

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