[Chat, books and other matters ]
Hi Pat,
It's good to see you around the thread again. That little bit of snow we had last week was certainly fun. While I was out walking and playing in the snow (yes, serious analysts play in the snow too.lol) I saw that some people were making good use of their skiing equipment by skiing on the snow covered sidewalks. Others had held onto ropes attached to the back of some trucks to go skiing. Seattle sure gets fun in the winter.
About the reading list, I've been makind an awful lot of visits to the University Bookstore lately. I picked up the following books recently:
1.Beyond Technical Analysis: How to Develop and Implement a Winning Trading System, by Tushar S. Chande, PhD.
2.Trading with Oscillators: Pinpointing Market Extremes, by Mark Etzkorn.
3. C++ for Dummies. I figured that if I'm going to develop a more sophisticated trading system, I'm going to need to brush up on and learn some of the advanced computer languages out there so I can once again become familiarized with the logic involved in writing code. My Computer Science classes taught me Ada before they switched to C, but that was about three years ago. The computer language skills are quite rusty.
4.Buffettology, by Mary Buffett & David Clark. I realized that the only stocks I would be comfortable holding for longer term periods in my portfolio are stocks that meet strict fundamental criteria, subject of course to a general TA screening for intermediate term timing. This nice book, though I haven't read it yet, explains in good detail the criteria the Buffett searches for when making long term investment decisions.
5.Every Investor's Guide to High-Tech Stocks & Mutual Funds: Proven strategies for picking high-growth winners, by Michael Murphy, editor of the California Technology Stock Letter(did you know that he once tried to rob a bank? I read that from a recent USA Today). We are indeed in a high technology world. I picked up this book because it provided some new valuation measures that were technology stock-specific. It allows me to sidestep the Warren Buffett criteria, yet still be able to make sound investment decisions in stocks that fall out of his "circle of competence."
6.Analysis for Financial Management, by Robert. C. Higgins. I'm always interested in making myself into a better Analyst.
7.Contrarian Investing: Buy and Sell When Others Won't and Make Money Doing It, by Anthony M. Gallea & William Patalon III. There's a contrarian nature to value investing, but this book finally puts it down in print.
8.Common Stocks and Uncommon Profits, by Philip Fisher. I remember that Warren Buffett highly praised this book, for it taught one what to look for when investing in a company. Didn't Buffett say that he was 15% Phillip Fisher and 85% Benjamin Graham? Just another step closer to following in Buffett's footsteps.
9.Selling with Integrity: Reinventing sales through collaboration, respect, and serving, by Sharon Drew Morgen. It seems that somebody finally got it right, and remembered to include the word "Integrity" in the business one conducts in the client-broker relationship. As I am also interested in becoming a broker, this book can provide me with some guidelines on how to create the best relationship possible between myself and my future clients.
10.The Investor's Quotient: The psychology of successful investing in commodities and stocks, by Jake Bernstein. Anybody who doesn't recognize the role that psychology plays in the market is at a strict disadvantage. I intend to add this book to my knowledge pool to make me a better trader/investor. How did that Shakespeare line go again? "The fault lies not in the stars, but in ourselves."
11.Financial Accountingby Harrison & Horngren. This looks like thebook on accounting. Just another step to better understanding the balance sheets.
You might notice that the main focus of my reading has to do with trying to better establish an understanding of the fundamental aspects of a business. I'm realizing that with all the time I'm spending trying to understand all the lines and squiggles of market movements, I could be using that time to become a "better Buffett."
I believe I already have a grasp of the main precepts of Technical Analysis. The number of books I've been accumulating on the subject however, are ironically having its drawbacks, for more and more, I am experiencing what can be called "Analysis Paralysis." The wealth of technical indicators out there are always in some way conflicting with one another, depending on whether I look at a trend-following approach or an anti-trend system, or whatever it may be..short term/long term..and the list goes on.
I do, however, find that I'm able to cancel out some of the "technical buzz" out there by understanding and investing in stocks with strong fundamentals. With just a TA perspective, the outlook can crumble within a day's notice, but with an FA approach, the urge to sell is very easily cancelled out because the fundamentals aren't as easily shaken within a day's notice. It seems that with my psychological makeup, an FA approach combined with a trend-following TA approach will work best for me. As for others with different psychological profiles, the parameters can be completely different, yet success can still be achieved. I've learned from my limited experience in developing trading systems that adopting a trading style that complements one's psychology is important, and with that statement I guess we have today's lesson.
Regards,
Rainier |
