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Trading Book Reviews

Book Review: Buy Don’t Hold

[easyazon-link asin=”0137045328″][/easyazon-link] [easyazon-link asin=”0137045328″]Buy – Don’t Hold[/easyazon-link] by Leslie Masonson is called a investing book, but I’m tempted to put it in the trading category. It depends on how you prefer to define the difference between the two. The book’s subtitle is “Investing with ETFs using relative strength to increase returns with less risk”.  Using relative strength makes me think trading, but there are definitely elements of the approach outlined in the book which speaks toward what I would probably think of as investing. In any case, as I noted in [easyazon-link asin=”047179063X”]The Essentials of Trading[/easyazon-link], I look at trading and investing as being functionally the same thing, with perhaps a philosophical difference in approach. I’ll leave it to the reader to make their own judgement.

This book is largely a practical text focused on application. The author outlines a very specific strategy for deciding whether the stock market is to be considered in an uptrend, downtrend, ranging, or turning. His “dashboard” comprises a collection of indicators which are very much technical analysis oriented. They include market breadth indicators, sentiment readings, and some basic price studies. The scoring of the indicators provides the user a market reading from which to develop a strategy. From there, Masonson moves on to picking the best trading/investment vehicle based on relative strength readings. In other words, it’s very much a top-down approach.

On the plus side, the author is very good about explaining the various methods he employs in his strategy. He suggests specific tools (most free, some paid, but not necessarily required) and walks the reader through applying things. On the negative side, much of the first third of the book is dedicated to proving how bad an idea buy-and-hold investing is - definitely overkill there – and I thought in general the writing could have been better. Also, while Masonson does demonstrate the value of the dashboard indicators he uses, he doesn’t actually show a good historical look at how the overall strategy would have done. Still, it’s a book which can certainly provide the fodder for research and development for those interested in longer-term stock market trading/investing and/or asset allocation between and among markets.

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Categories
Trading Book Reviews

Book Review: Reading Minds and Markets

[easyazon-link asin=”0132354977″][/easyazon-link]I’ve recently been reading a book titled [easyazon-link asin=”0132354977″]Reading Minds and Markets: Minimizing Risk and Maximizing Returns in a Volatile Global Marketplace[/easyazon-link] by Jack Ablin. Ablin is a long-time money manager with experience in both the fixed income and equity markets. While at first glance I think a lot of folks would probably say this book isn’t really something traders would be interested in, I think there are some nuggets to be had for those with a fundamental approach to the market and those who like to have a big picture view of things.

I don’t know how well the title actually sets up the book. Clearly it was crafted to hit the hot button concepts. The book is primarily about asset allocation – picking the best place(s) to put money to work.  Ablin provides what he considers the five ways one can look a the markets (speaking mainly of stocks and bonds here, but thinking on a global scale) to evaluate areas of potential opportunity. For each of those ways he provides some ideas for metrics which can be used to provide the necessary relative analysis.

The discussion of different potential metrics I found quite useful. It stimulated some ideas for me in the things that I do, and I’m sure it would do the same for other readers as well. These are, of course, more macro measures looking at broader themes, but that’s the basic point. Ablin pounds the table quite frequently about the value of looking at things top-down.

High level portfolio allocation type books can sometimes be very dry and boring. This one is actually quite approachable. The author includes quite a few personal anecdotes from his experience managing funds, showing both his triumphs and the short-falls which motivated him to improve is knowledge and methods. My one gripe was that the book was written to a bit too low a level of reader. Obviously, that makes it accessible to a wider audience, but I personally found some of the written annoyingly basic.

That drawback aside, for those who are interested in top level asset allocation type decisions, or who want a set a tools they can use for macro level analysis, I think this is a book which can offer up a lot of useful tips and ideas.