Monday, July 25, 2005

A book: The Perfect Stock

Since I'm not doing much trading right now except for getting the best prices I can short-selling QQQQ's and unloading the rest of my longs, I decided to try to find out who the largest fund was holding TASR at its 2004 top as a starting point for further research. I remembered reading an article in April 2004 that the reason TASR plunged on its third split was because the largest fund shareholder was disposing of almost all of its TASR holdings, much of which had been owned since TASR was pre-split $10. I couldn't find that article, but I found something better: a book I had never heard of, The Perfect Stock: How a 7000% move was set-up, started and finished in an astonishing 52 weeks.

From what I can tell by the excerpts on the website, the book is a modern version of Reminiscences of a Stock Operator, written in the same timeless style and teaching the same timeless lessons. But this time we get the benefit of a subject that many of us are intimately familiar: TASR. I've got TASR's chart seared on my brain so naturally I had to order a copy of the book. After I've read it I'll do a review for the blog. Until then, I'll leave you with a few passages from the excerpts page:

  • Boyd offered me black coffee and Hennessy X.O. We parked ourselves poolside. He began, "Why the sudden interest now in stocks? The market seems to be topping around here at least for the intermediate term. You should be looking to go fishing now. Not to buy stocks. And more importantly your interest in Taser is surprising since I am now looking to get out of Taser shortly."

    "I am doing some background work on Taser for a large client. It is now headline news. There is talk about stellar earnings report coming out next Tuesday. I thought I could pick your brains about the stock," I offered. "Obviously Boyd, everything about you will be kept out of the report. You know that." I confirmed to him what he knew about me. I never betrayed confidences. And Boyd, who was a stickler for anonymity, appreciated this more than most.

  • "The public has no idea of probabilities. They only believe in the possibilities. It is possible one could become an instant multimillionaire at a casino. It has been known to happen once in a while. It is possible that one can land a true winner in the stock market and make millions. It has been known to happen sometimes. It is possible that folks can win multimillion dollar lottery jackpots. It has happened a few times before. But just because something has happened before does not mean that it is probable. It certainly is possible. But how many of us sit down to think about the probabilities? The only consistent winner in the stock market is the one who places his commitments based on probabilities and not on possibilities."

  • "There is only one way to get the public excited in buying a stock. That is by showing rising prices. One only looks to buy a stock whose price is rising. Nobody wants to buy a stock whose price is falling. There is only one way to prove that a stock‘s price is rising. The stock does that by plotting a series of higher price highs and higher price lows. If a stock makes new higher price high than a prior price high and then at price reactions makes a higher price low than a prior low, it shows the tendency to rise. There is no better way to market a stock than setting it on a course of such an uptrend. Suddenly there is interest within the public to buy such a 'winner.'"

  • "There is only one way to beat the market. That is to learn the lessons of the market oneself and try to recognize the lessons offered by masters of yester years. The old masters who have long gone do, through their writings and experiences, confirm the lessons we ourselves will learn in the markets. Those who claim to be successful in today’s markets but will never caution us against the pitfalls are more likely than not doing injustice to their readers."


At 12:37 AM, Blogger uclatrader said...

I am looking forward to your review of the book. It seems pretty interesting from the link I saw.

At 9:47 AM, Anonymous TitusTrading said...

I have read the book (several times now) and I also am a subscriber to the authors website - I highly recommend both and would be happy to share my thoughts with anyone interested.

At 12:21 AM, Blogger jontait said...

Titus you didn't leave a contact email, but I'd love to talk with you about the book and author's website. Send me a mail if you read this.

At 9:02 AM, Anonymous TitusTrading said...

Hi Jon -

I sent you an e-mail - just checking to see if you got it.



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