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John Clark
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I am an individual investor/trader who is always looking to refine any edge that is available to a person with my talents, experience, knowledge, and resources. Seeking to: - keep my attention on the market, especially when things get slow or confusing I am finding myself distracted - elicit... More
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  • Book Review: The Way of the Turtle by Curtis M. Faith

    The Way of the Turtle was written by Curtis M. Faith about his experiences and lessons as one of the people chosen by Richard Dennis to be part of his experiment into whether or not people can be trained to be great traders.  Those chosen came to be known as "the Turtles" and Curtis Faith has been described as the most successful of the famously successful group.

    In the preface Faith promises that the book ". . . lays bare the entire experiment, explaining exactly what we were taught and how we traded.  The book details some of our biggest trades and the rules behind their timing, delivering insights into what it takes to makes millions in the markets." 

    How could any trader or potential trader ask for more than that from one book? 
    So, did the author do what he promised?  In my opinion he did exactly what he promised and then some.

    In addition to describing his experiences the author gives his perspectives on what it was in the Turtle approach that led to the extraordinary gains over the four year period, why some of them made more money than others, how the basic strategy applies to other markets, and finally, how to apply it to each reader's own situation.

    Dr. Van Tharp has said in the book's Forward that he considers it to be one of the five top books on a "must read" list on the topic.  Tharp advises the reader to note carefully what Faith has to say about

    • what makes a trading system "work"
    • how behavioral finance principles apply to trading
    • how traders should use game theory in structuring their thinking
    • the importance of understanding basic statistical principles
    • how to spot a good trading system
    • what the "real" secrets of the Turtles were.
    (It's always helpful when the professor gives some hints on what to look for and these hints worked well for me.)  

    In terms of who this book is written for, I would invite your attention to the Epilogue where the author asserts that it is really for everyone, even if they don't know it.   

    He tells us that in a way he wrote the first part of the book to get our attention so that he could deliver the message in the last chapter which that in life, as in trading, each of us has to overcome our fear to follow our own path and not do what everyone else is doing.  

    Of course if one has no interest in trading and doesn't care if Turtle are reptiles or candy, they are unlikely to ever make it to the Epilogue chapter.

    In any event, I found this book to be valuable, enjoyable, and challenging on both levels and highly recommend it.    


    Dec 11 8:06 PM | Link | Comment!
  • ITT Says It Will Be Better As Three

    ITT Corporation
    has announced that it intends to use a stock spin-off process to separate the company into three parts:  water technology, defense technology, and the rest of ITT that will be left with those two off on their own. 

    The is no lack of coverage or awareness of this or most other stock spin-offs now.  Perhaps there was a time when spin-off stocks traveled under most investors' radars, but that advantage for savvy value seekers has been diluted by websites, blogs, and even highly touted, heavily sold "all-you-to-do-to-beat-the-market" e-books and courses.

    The ITT spinoff even has its own website to explain exactly what is going to happen, .  "Three Strong Businesses Positioned to Create Significant Value for Shareholders as Standalone Companies" is apparently their motto.  The pro forma revenues are reported at $3.6 billion from water, $5.8 billion from defense, and $2.1 billion from ITT which they describe as "a diversified global manufacturer of highly engineered industrial products."

    As far as I can tell at this point, this spin-off does show signs of being a situation in which the sum of the parts could turn out to be worth more than the whole. 

    You may find helpful information for the current configuration in free content on the internet. For example, the Morningstar website  shows ITT's price/book ratio to be 2.6,  price/sales 1.0, forward Price/Earnings 12.7, and Price/Cash Flow 12.8 and the Guru Analysis & Stock Screener App at SeekingAlpha will tell you what the numbers mean according to various schools of thought.  And often, others will even do some calculations for each component of the spin-off for you, especially for the high visibility spin-offs like this one.  Take advantage of those.

    As with most stock spin-offs, there is plenty of time to watch the process unfold and decide if, when, and where to enter.  Make the trade come to you. 

    For more on this and other spin-offs you can go to the Stock Spinoff Blog too.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Feb 04 1:35 PM | Link | Comment!
  • Book Review: The Daily Trading Coach


    In writing The Daily Trading Coach101 Lessons for Becoming Your Own Trading Psychologist it was the authors stated intention to “. . . give you the tools to become your own coach, so that you can guide your own professional and personal growth.”  And, I would have to say that I think he did a quite good job of thatThe tools for just about any situation are in there.

    Will they all fit psychological trading challenge of yours or mineProbably not all, because that simply is not possible, but he does provide enough general principles and specific recommendations for personal exploration and action that it will at least be a good starting point.

    If nothing else, it would be worth reading the book just to understand Dr. Steenbargers observation that if you were going to set up a learning situation in a laboratory specifically to make an animal anxious and ineffective, it would look much like the stimulus-reward relationships that occur in the financial marketsOf course, his suggestedwork-aroundsfor the markets’ “crazy-makingrewards, punishments, apparent patterns, unpredictability, changeability, and chaos are invaluable for those who travel these watersBut, still, sometimes it is helpful just to get some validation that, yes, this is a strange place indeed.

    Who is the book for?

    The book is appropriate for anyone who is involved with the financial markets, whether personally or professionally.

    It was written by a psychologist who has consulted to trading firms and coached active traders for many years as well as trading himselfHis examples and language reflect this experience, as they should.

    Given that, if you view yourself as an investor, rather than a trader, you may conclude that this book is not for youFrom my perspectivethis would be a mistake since whether we buy something with the idea of holding it for a minute, a day, or a decade, our intention is to eventually sell it for more than we paid for itWe are all tradersIt is just our time frames that differ.

    Whats in it?

    The book consists of 10 chapters, each with 10 lessons, with lesson #101 being in the conclusionThey are

    1.   Change: The Process and the Practice

    2.   Stress and Distress: Creative Coping for Traders

    3.   Psychological Well-Being: Enhancing Trading Experience

    4.   Steps Toward Self-Improvement: The Coaching Process

    5.   Breaking Old PatternsPsychodynamic Frameworks for Self-Coaching

    6.   Remapping the MindCognitive Approaches to Self-Coaching

    7.   Learning New Action Patterns: Behavioral Approaches to Self-Coaching

    8.   Coaching Your Trading Business

    9.   Lessons from Trading ProfessionalsResources and Perspectives on Self-Coaching

    10Looking for the Edge: Finding Historical Pattern in Markets

    What might be a challenge in getting the most out of it?

    Probably, first on the list would be that there is so much information in this book that it can feel overwhelmingTrue, the author says up front that it is not necessary, nor is it intended, to sit down and read it straight throughRather, it can be used as a reference book, working on whatever chapter and lesson seems to apply to you at the moment.  ( Obviously, you cant do this if you are going to write a book review, so perhaps my view is a bit skewed in this regard. )

    The book often seems to have been written for mental health professionals or at least someone who is familiar with the lingo of psychology, therapy, and coachingThis is not a huge limitation, but sometimes if the reader is not at all familiar with a concept or term, a quick trip to Wikipedia or some other source could be a good idea.

    And, finally, when it comes to approaches to dealing with problems that come up, the ones that he describes are not the only ways or necessarily the best ways to go for each individualThis is one of those places where I do think Dr. Steenbarger has done an excellent job at getting the reader started, even where it may not provide a complete solution.

    Overall Opinion?

    This is an excellent book that accomplishes most of what it set out to doThe most basic challenge to the self-coach, even armed with a resource like The Daily Trading Coach, is to set the goals and stick with the programWhat else is new?


    Disclosure: The publisher of this book provided me with a copy to read for doing this review, but I have received no other compensation.  I did read the whole book, but did not do the exercises.


    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Jan 07 4:20 PM | Link | Comment!
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