Name: The new market wizards
ISBN: 9780887306679

The new market wizards

In The New Market Wizards, successful traders relate the financial strategies that have rocketed them to success. Asking questions that readers with an interest or involvement in the financial markets would love to pose to the financial superstars, Jack D. Schwager encourages these financial wizards to share their insights. Entertaining, informative, and invaluable, The New Market Wizards is destined to become another Schwager classic.

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pellerOct 2018

Related, Trading and Exchanges: Market Microstructure for Practitioners by Larry Harris is also excellent.

https://www.amazon.com/Trading-Exchanges-Market-Microstructu...

These aren't really textbooks, but regardless, the Market Wizards series by Jack Schwagger is highly recommended:

https://www.amazon.com/Market-Wizards-Updated-Interviews-Tra...

https://www.amazon.com/New-Market-Wizards-Conversations-Amer...

https://www.amazon.com/Hedge-Fund-Market-Wizards-Winning/dp/...

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pellerMar 2018

I might suggest you pick up copies of the books in the Market Wizards series. A good library should have them (or could get them). It's a series of interviews with some of the best in the field, across all kinds of different types of finance. They're enjoyable reads, filled with insight, and give a good broad perspective from which you can dive deeper into areas that you think might be especially interesting to you.

[1] Market Wizards - https://www.amazon.com/Market-Wizards-Jack-D-Schwager/dp/088...

[2] The New Market Wizards - https://www.amazon.com/New-Market-Wizards-Conversations-Amer...

[3] Hedge Fund Market Wizards - https://www.amazon.com/Hedge-Fund-Market-Wizards-Winning/dp/...

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SirLJJun 2017

I wish as a kid I had access to the following:

"More Money Than God: Hedge Funds and the Making of a New Elite" https://www.amazon.com/More-Money-Than-God-Relations/dp/0143...

Market Wizards, Updated: Interviews With Top Traders https://www.amazon.com/Market-Wizards-Updated-Interviews-Tra...

The New Market Wizards: Conversations with America's Top Traders https://www.amazon.com/New-Market-Wizards-Conversations-Amer...

Hedge Fund Market Wizards: How Winning Traders Win https://www.amazon.com/Hedge-Fund-Market-Wizards-Winning/dp/...

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RockyMcNutsSep 2016

FWIW this would be my list of books every investor should read, which is different from what you should read to work in finance but anyway ...

Capital Ideas: The Improbable Origins of Modern Wall Street by Peter L. Bernstein. A lively introduction to the theoretical foundations of modern finance and their history, Markowitz, Sharpe, etc. https://www.amazon.com/Capital-Ideas-Improbable-Origins-Mode...

The Essays of Warren Buffett : Lessons for Corporate America by Warren E. Buffett. In his own words...you can also find many if not all online, on Berkshire website https://www.amazon.com/The-Essays-Warren-Buffett-Corporate/d...

Buffett: The Making of an American Capitalist by Roger Lowenstein. Insightful biography...The Snowball was written more recently with Buffett's approval, but would read this one first https://www.amazon.com/Buffett-American-Capitalist-Roger-Low...

Common Stocks and Uncommon Profits and Other Writings by Philip A. Fisher. It's not widely appreciated, but Warren Buffett's method is 50% Ben Graham and 50% Phil Fisher. If you can find value stocks that are also great franchises, and hold onto them for dear life, you will be rich... if you also bet big, operate companies well, don't screw up, live in a bull market era and survive long enough, maybe as rich as Buffett. https://www.amazon.com/Common-Stocks-Uncommon-Profits-Writin...

The Intelligent Investor: A Book of Practical Counsel by Benjamin Graham. Classic introduction to value investing https://www.amazon.com/The-Intelligent-Investor-Practical-Co...

Unconventional Success: A Fundamental Approach to Personal Investment by David F. Swensen. Asset allocation, and the perils of mutual funds...leading endowment investor of our time (Yale) gives his advice for individuals https://www.amazon.com/Unconventional-Success-Fundamental-Ap...

The Most Important Thing: Uncommon Sense for the Thoughtful Investor by Howard Marks. Lessons in investing... at any time, any one of them can be 'the most important thing' and so they all are jointly and severally 'the most important thing'. https://www.amazon.com/The-Most-Important-Thing-Thoughtful/d...

The Investor's Anthology: Original Ideas from the Industry's Greatest Minds (Vols 1 and 2) by Charles D. Ellis (Editor), James R. Vertin (Editor). Essays from a broad selection of writers https://www.amazon.com/The-Investors-Anthology-Industrys-Inv... https://www.amazon.com/Classics-II-Another-Investors-Antholo...

The Money Masters; The New Money Masters; Money Masters of Our Time, by John Train. Methodologies of all-time great money managers, in their own words https://www.amazon.com/The-Money-Masters-John-Train/dp/08873... https://www.amazon.com/Money-Masters-Time-John-Train/dp/0887... https://www.amazon.com/New-Money-Masters-John-Train/dp/08873...

Market Wizards; The New Market Wizards; Hedge Fund Market Wizards, by Jack D. Schwager. Interviews of successful traders https://www.amazon.com/Market-Wizards-Jack-D-Schwager/dp/088... https://www.amazon.com/The-New-Market-Wizards-Conversations/... https://www.amazon.com/Hedge-Fund-Market-Wizards-Winning/dp/...

Manias, Panics, and Crashes: A History of Financial Crises by Charles P. Kindleberger. Why good markets go bad https://www.amazon.com/Manias-Panics-Crashes-Financial-Inves...

Reminiscences of a Stock Operator by Edwin Lefevre. Fictionalized biography of a famed early-20th century trader https://www.amazon.com/Reminiscences-Stock-Operator-Edwin-Le...

A Random Walk Down Wall Street: The Best and Latest Investment Advice Money Can Buy by Burton G. Malkiel. Reality check from an efficient market theorist https://www.amazon.com/Random-Walk-Down-Wall-Street/dp/03933...

This is a rollicking good read on links between Shannon, Kelly, Thorpe, who wrote 'Beat the Dealer' and was maybe the first hedge fund legend https://www.amazon.com/Fortunes-Formula-Scientific-Betting-C...

And maybe something on technical analysis, but not really sure what to recommend...a lot of people view it kind as mumbo jumbo, but I kind of think fundamentals are like playing your poker hand, technicals are like playing the opponents' tells...the chart gives you an idea of who owns it at what price, what levels might make people rethink positions. Maybe this one as an easy intro, dumb title notwithstanding https://www.amazon.com/Stan-Weinsteins-Secrets-Profiting-Mar...

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nissimkJul 2015

In the primary market, when debt is first issued through a syndicate of banks, there is not really much of a problem. There is a really great chapter about this process I think in the "The new Market Wizards" book by Schwager, though it might be in the first book, "Market Wizards." The banks call all of their customers and get commitments for dollar amounts towards the deal. Then they put together the paperwork and issue securities. It's kind of like a bond, but it's technically a loan. Each of those investors receive some sort of documentation that they own some piece of that loan and the bank (or some administrator) distributes interest payments to the holders.

The problem arises in the secondary market where initial holders want to sell their piece prior to maturity. There is a long process by which they have to prove ownership and transfer ownership. It's kind of like the process of closing on a home where there is a title search and deed transfer. During this period the buyer and seller are both open to shenanigans from the other party trying to back out of the trade or change the terms. It's also very labor intensive and archaic. If title was stored and transfered through a public trusted distributed ledger system then it could be done instantaneously with minimal effort.

As I said above, there is much more potential here, which makes bitcoin way more promising than just a system for recording and transfering ownership of assets.

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rl3Dec 2013

The article narrowly assumes "trading" stocks to mean purchasing shares based primarily on company fundamentals, in the hope that the share price will rise, and with absolutely no mention of any exit strategy or position sizing/risk management.

Here's a better definition of trading stocks:

The purchase or short sale of shares with the intent of profiting on either upward or downward price movement, based off any of the following:

a) Technical information (market data such as price, volatility, volume, etc).

b) Fundamental information (company financial information)

c) News

d) Premonition

e) Completely random selection

f) Literally anything else, including a combination of the aforementioned.

The vast majority of people who trade completely neglect the concepts of position sizing, exit strategies, or other components of a solid trading methodology. In my opinion, this is due to an unhealthy industry obsession with entry signals.

Entry signals determine when you enter into a position, and that's it. They don't tell you how to stop losing money when the stock moves against you, and they don't tell you what quantity of stock to trade in the first place so that you don't expose yourself to undue risk.

It is possible to construct a profitable trading system that utilizes completely random entry signals. You won't make a lot of money, but most people are surprised by the very notion that something like this is even possible.

For example, say you randomly select 100 stocks to trade, and you allocate 1% of your equity to be risked per position. Your exit signals, assuming they're properly designed, will terminate a position once its losses have reached 1% of your total equity. Conversely, these exit signals will also allow for favorable price movement. In other words, they cut your losses and let your profits run.

If you replaced random stock selection with quality entry signals, the trading system I just described would be even better. Point being, even if you have the sexiest, most profitable stock selection method/entry signals in the world, but you fail to give thought to the other parts of your trading methodology/system, it's very possible, if not probable, that it will fail miserably.

Psychology is an absolutely huge component of trading. The best traders, whether they're automated systems traders or discretionary traders, overwhelmingly tend to be utterly emotionally detached from the design and execution of their chosen system or methodology, as well as the outcome. Elation from profits can be just as dangerous as sorrow from losses. Exercising this kind of discipline is incredibly hard in practice.

Top traders also tend to be fiercely independent in regards to the synthesis of the ideas and opinions they hold concerning the market; there's a reason very few people get rich trading on the advice of newsletters.

I tend to agree with the article's premise though, in that that most people are probably better off not trading. Ultimately, markets are wealth transfer mechanisms that tend to concentrate wealth into the hands of the advantaged and competent. If this were anything but, things like high-frequency trading and private firms with vast profits wouldn't exist, or at least not to the degree they do today.

As an aside, if anyone has an interest in trading and hasn't read them, I highly recommend Market Wizards: Interviews with Top Traders and The New Market Wizards: Conversations with America's Top Traders, by Jack D. Schwager. They were published in 1993 and 1994, respectively. Although written in a period where automated systems trading was in its infancy (HFT didn't even exist), their value in terms of trading psychology remains intact. Arguably they're even more interesting today, considering they're now period pieces.

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