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Global Investor Bulletin - Alexander Elder's new book

This week...

1. Rigged
2. Sell and Sell Short, a new book by Alexander Elder, Pre-order Now
3. Guru Focus - Erich Florek
4. The Little Book That Makes You Rich

1. Rigged
Rigged : The True Story of a Wall Street Novice who Changed the World of Oil Forever
by Ben Mezrich

From the author who brought you the bestselling 'Bringing Down the House', this is the startling, rags-to-riches story of an Italian-American kid from the streets of Brooklyn who claws his way into the wild, frenetic world of the oil exchange.

After conquering the hallowed halls of Harvard Business School, he enters the testosterone-laced warrens of the Merc Exchange, the asylum-like oil exchange located in Lower Manhattan. A place where billions of dollars trade hands every week, the Merc is like a casino on crack, where former garbage men become millionaires overnight, where fist fights break out on the trading floor and men have been known to bring prostitutes as dates to company dinners.

This ordinary kid has traded Brooklyn for the gold-lined hotel palaces of Dubai. He keeps company on the decks of private yachts in Monte Carlo- teeming with half-naked girls flown in by Saudi Sheiks and makes deals in the dangerous back alleys of Beijing.

Rigged is the explicit, exclusive, true story behind the headlines that dominate the world stage...
RRP : £10.99
Special Offer : £7.69
Read more or buy Rigged


2. Sell and Sell Short, a new book by Alexander Elder, Pre-order Now
Sell and Sell Short by Alexander Elder

Due to be published next week, this brand new book by Alexander Elder asserts that all traders should learn to short. He shows what to look for at market tops and how to jump onto a downtrend. He explains how to use important indicators of short selling activity, such as the short-interest ratio. A special chapter is dedicated to shorting non-equity instruments, such as futures, options, and forex.

Many beginners approach selling in a vague and indecisive manner. Sell and Sell Short offers traders the essential lessons, rules, and instructions all traders need. This book will help you make the right choices in the markets and put you on the road to trading success.
RRP : £45.00
Special Offer : £34.65
Read more or buy Sell & Sell Short


3. Guru Focus - Erich Florek
Over the next few weeks, we're going to have look at some of the books that the gurus who are listed on http://www.global-investor.com/gurus/ recommend. This week our fetaured Guru is Erich Florek, who started trading stocks, warrants, and futures when he was 17 years old and is today one of Europe's leading experts on technical day trading.

Erich Florek recommends:
Hit and Run Trading 1
by Jeff Cooper
Read more...

Hit and Run Trading 2
by Jeff Cooper
Read more...

Long-Term Secrets to Short-Term Trading
by Larry Williams
Read more...

Street Smarts
by Lawrence Connors, Linda Raschke
Read more...

Technical Analysis of the Financial Markets
by John Murphy
Read more...

The New Science of Technical Analysis
by Thomas DeMark
Read more...

For more books recommended by Erich Florek, please have a look at:
http://www.global-investor.com/gurus/Florek/


4. The Little Book That Makes You Rich
The Little Book That Makes You Rich by Louis Navellier

Written by Louis Navellier - one of the most well-respected and successful growth investors of our day - this book offers readers a fundamental understanding of how to get rich using the best in growth investing strategies.

Filled with in-depth insights and practical advice, The Little Book That Makes You Rich gives individual investors specific tools for selecting stocks based on the factors that years of research have proven to lead to growth stock profits. These factors include analysts' moves, profit margins expansion, and rapid sales growth.

RRP : £10.99
Special Offer : £9.34
Read More...

Women traders

On this day, 26 March, in 1973 women were were allowed on to the floor of the London Stock Exchange for the first time.

Hedge fund performance

Pommygranate blogs on hedge funds-

In order to keep the client money rolling in, hedge funds have to show to the world that they really do make outsized returns. Hence these ever ingenious folk have come up with a unique concept - 'survivor bias'. This means that the HF Indices showing overall returns exclude those HFs that have gone bust (about 1 in 5 each year) so blostering the average returns. Neat, huh?

His other Ten Things You Should Know About Hedge Funds.

The danger of Black Scholes

An article by Michael Lewis in Portfolio magazine points out the flaws in the Black Scholes model. One of which is the higher occurence of extreme market moves than previously assumed (on the same topic see also Nassim Taleb in The Black Swan). Another problem is the difficulty of taking a short position - and dynamically managing that position - when a market is crashing.

This is not just of academic interest, as according to Lewis-

At the end of 2006, according to the Bank for International Settlements, there were $415 trillion in derivatives—that is, $415 trillion in securities for which there is no completely satisfactory pricing model. Added to this are trillions more in exchange-traded options, employee stock options, mortgage bonds, and God knows what else—most of which, presumably, are still priced using some version of Black-Scholes.

Lewis concludes-

Financial panics have become almost commonplace; events that are meant to occur once in a millennium now seem to occur every few years. Could this be because the financial system was built on an idea that badly underestimates the risk of catastrophes—and so conspires with human nature to create them?

S&P 500 volatility at 70-year high

According to a Reuters report, volatility of the S&P500 Index (as measured by the VIX Index) is at a 70 year high. The report says-

Measured by daily changes of at least 1 percent in the index, volatility has soared since credit concerns became a critical issue in the summer of 2007

The stock market today and in the 1970s

From an article in today's Telegraph, written by George Blakey, author of A History of the London Stock Market-

While it is tempting to to blame today's chaotic market conditions on the complications resulting from the introduction of countless new exchange-traded derivatives over the past decade, there's nothing new about booms and busts.

They originate in periods of credit expansion and end in periods of credit contraction, a sequence that gives banks a pivotal role to play. This was very much the case in 1972-1975.

The abolition of credit controls and the opening up of competition in 1971 paved the way for the secondary banks and the hire-purchase companies to make inroads into what had once been the exclusive preserve of the big commercial banks, and all went on a lending spree, principally funding property investment.

When it all came tumbling down, thanks to a soaring oil price and a domestic background of strict price controls coupled with a wages free-for-all, the banks ran for cover and called in their loans. The fact that many borrowers were unable to repay them meant that the banks were in big trouble.

One by one the secondary banks collapsed, and rumours swirled around the clearing banks, prompting the Bank of England to issue a denial that that National Westminster Bank had ever requested or been offered large scale support as its shares slipped below par.

The article ends-

This one is going to run and run, and when triple A mortgage-backed securities are getting tarred with the subprime brush,one lesson we can heed from 1974 is the advice Jim Slater gave to his shareholders in May of that year when the stock market was poised to halve again, "Cash is the best investment now".