Stock Market Wizards: Interviews with America's Top Stock Traders

by Jack D. Schwager

Book Overview

The third in the bestselling Market Wizards series, this time focusing on the barometer of the economy - the stock market. It has been nearly a decade since the publication of the highly successful... This description may be from another edition of this product.

• Format: Paperback
• Language: English
• ISBN: 0066620597
• Release Date: April 2003
• Publisher: Harper Business
• Length: 352 Pages
• Weight: 0.64 lbs.
• Dimensions: 8.0" x 0.8" x 5.3"

Customer Reviews

Its all a Head game

Great interviews that covers from the retail trader all the way up to hedge funds managing billions in funds. Common trait between traders is the ability to stick to your strategy and being disciplined.

Real market insights of real market pros

Kokop put it perfectly. You have to be able to read between the lines and read the interviews as they were said and extract the insights in principles and guidelines that are successful. Granted that each professional trader mentioned can't expel EVERY trading secret or methodology, you can take alot of the experience and wisdom gleened from these top traders by not only saving yourself all of the time and money necessary to acquire such wisdom and knowledge, but also by analyzing the particular styles of each trader and see how it either compliments or contrasts against your own style. Trading is both a science and an art. Investing same thing. The difference between the top traders and those of us who have bowed out lies in the interpretations they have made based on historical facts and patterns over time. Once you understand these interpretations and apply them to today's market, you will definietly be better versed in riding the tides and avoiding major mistakes that you might have made had you otherwise not been exposed to this professional wisdom. Take it for what it's worth, evaluate it on your own merits, use your own criteria, and I can almost guarrantee (99%) that you will improve your trades and limit your drawdowns as they are called. (there is jargon in any discipline)

Great Book

Some of the traders stories I found boring and a few of them were interesting and useful to me. The most valuable part of the book, however, is not any of the individual traders stories but the "Wizard Lessons" (pgs 293 - 318). This part is actually all the best concepts that Schwager has found from his interviews. These are the concepts that make the most exceptional traders. Just reading this part of the book alone is well worth the cost. I read this part 2 X and will probably read it again in the future.

Terrific page-turner of a book

I loved this book, and think that Schwager has successfully honed his interviewing skills over time, so that this one ended up superior to the earlier books in the series. The first chapter is one of the most colorful, as Mr. Schwager talks shop with Stuart Walton, who manages $150 million as the principal of Reindeer Capital, in San Francisco. To call him the "principal" is something of an understatement. Except for a part-time secretary, he IS Reindeer.Even Mr. Schwager's first question, about the name of that fund, elicits a fascinating anecdote. It seems that Mr. Walton's great-grandfather, William Gladstone Walton, received the nickname "Reindeer" from his neighbors in northern Quebec.One year (apparently 1920, although this is left indefinite), forest fires destroyed most of the vegetation and game of the region, and threatened the Indian and Eskimo population with starvation. William G. Walton convinced the Canadian government to finance a scheme of his to lead a herd of reindeer (plentiful in Alaska) across the north of the country into the deforested part of Quebec. The project took him five years, 1921-25, because reindeer are not cattle-moving only when they want to move-but he did succeed, introducing a substantial herd into Quebec, one that has flourished there ever since, and he became a local hero. "I tell people that my great-grandfather added more value to society than I ever will," said Mr.Walton, in concluding his explanation of his fund's name. I think he was being too modest there. Of course, an effective trader adds value to society without having to herd Donner and Blitzen through the arctic to do it-by getting investment capital into the hands where it will prove most productive, by helping a variety of enterprises manage their inevitable risks, and by contributing to the financial independence of his clients.

Best All-Around Book on Trading

This is the best book on equities trading that I've seen. It is appropriate for people at all levels, from beginners to seasoned professionals. In my opinion, not only is it better written than Jack Shwager's other books, but it is also far more helpful, especially for those primarily interested in the equities markets, although his other books may be better suited for futures traders.Even to a greater extent than Shwager's other market wizard books, this book provides a great deal of insight into the thought processes of successful traders, and an understanding of what gives them an edge. The interviews with Michael Lauer and Ahmet Okumus provide tremendous insights into certain factors critical to successful value investing, while those with Stuart Walton and Mark Minervini provide incredible glimpses of how to prosper in growth investing. Complementing these approaches is that of Dana Galante, who, incredibly, had stellar results during a bull market operating exclusively on the short side!All of the interviews in this book penetrate to the very depths of some extremely important topics, including stock market strategy, portfolio management, risk management, and how to determine the future prices of stocks. To provide an important example regarding this last topic, specifics are provided as to how to anticipate a catalyst that would be likely to cause a stock to turn around. In fact, what this book has to say about market catalysts is one of its srongest features. This is particularly true of the interviews with Stuart Walton, Michael Lauer, Dana Galante, Mark D. Cook, Micahel Masters, and John Bender. I did not see this crucial emphasis in the earlier market wizard books, nor have I seen it emphasized in most other books on trading.In the interview with Dana Galante, for example, it is mentioned that in order to find appropriate candidates for shorting, one must do more than simply find growth companies that are overvalued or that have high receivables, or that have a change in accountants or a high turnover in CFOs. These things in themselves are not enough. There must also be a catalyst that will reverse the direction of the stock's price. In the interview, specific pointers are provided as to how to anticipate such a catalyst. For example, Galante looks for companies with slowing revenue growth which have kept their earnings looking good by cutting expenses, since, in such a situation, "usually, it's only a matter of time before their earnings growth slows as well." Another thing that Galante looks for is a company that is doing well, "but has a competitor creeping up that no one is paying attention to."The other interviews also provide many specifics as to how to spot reversals in a trend. For example, Stuart Walton pointed out in his interview that one key to spotting an impending reversal would be a situation in which the market is not responding to data correctly. At one point he says of this, "If there is additional bearish news and

Rare Access to Valuable Information

First of all, as I write this, the cost of the book is $22.40 plus S & H. Many of the other reviews suggest that it fails to provide sufficient value. Apparently I don't understand something. How much is it worth to gain direct access to the intelligence and experience of some of the most successful stock traders?In any event, this is one of three books by Schwager which have been highly praised by others. (I plan to review the other two, Market Wizards and The New Market Wizards, in the near future.) In it, he provides introductory comments on and then interviews of 15 stock market "wizards." For each, he offers clever as well as relevant phrases which differentiate them. For example, for Stuart Walton ("Back from the Abyss"), Mark D. Cook ("Harvesting S & P Profits"), Mark Minervini ("Stock Around the Clock"), and Claudio Guazzoni ("Eliminating the Downside"). Revealingly, although the 15 stock traders have significantly different perspectives on investment and (sometimes reluctantly) divulge different strategies, they seem to share certain common beliefs which Schwager characterizes as "Wizard Lessons." They include:1. There is no single "truth."2. Her or his trading style must be appropriate to each trader's personality. 3. Perseverance usually separates "winners" from "losers."4. Great traders are flexible and resilient.5. It takes time (probably many years) for a trader to succeed.6. It is imperative to formulate a trading philosophy which integrates market concepts and trading methods.7. Every great trader has a specific "edge." (What are your answers to the questions listed on page 301?)8. Great traders develop and then sustain a high level of self-confidence.9. Successful trading requires a FULL-TIME commitment.10. Market "wizards" are bold and innovative but not reckless and impulsive. 11. They are willing to accept a loss while rigorously controlling risk.12. They may view undervaluation as a necessary condition for purchasing a stock but never as a sufficient condition.13. Their transactions are guided and informed by a trading model based on catalysts.14. Market "wizards" pay at least as much attention to "when to get out" as they do to "when to get in"15. Market "wizards" know themselves (warts and all), work very hard, trust their own judgment, constantly review/evaluate decisions, and are patient.For about the cost of a breakfast at a restaurant in the Wall Street area, Schwager introduces his reader to 15 immensely successful stock traders and then allows the reader to "eavesdrop" on in-depth interviews of them. Schwager also helps his reader to compare and contrast their mindsets, strategies, and convictions. A value-added benefit is the provision an Appendix in which Schwager discusses "Options: Understanding the Basics." For novice investors, this book is an invaluable source of wisdom on HOW NOT TO THINK and WHAT NOT TO DO. I presume to suggest that there is another audience for this book wh