Tuesday, March 03, 2009

The WallStrip Edge - Book review

If Investors Business Daily's William O'neal (famous Momentum Investor) & Warren Buffet ("Buy what you know") had a bastard child - It would be Howard Lindzon.

In this blog post, the simplest of summaries, this is Howard Lindzon's secret to successful investing in his recently published book - The Wallstrip edge - Using Trends to Make Money- Find Them, Ride Them, and Get Off.

The Wallstrip Edge is only the second investment book I have ever read. I found it comforting that the one book that Howard Lindzon highlights in his book is that one investment book that I had read (I read it immediately upon receiving my Series 7 right before the crash of 1987). Reminiscenses of a Stock Operator The Jesse Livermore story penned back in the 1920's and also a MUST READ.

The Wallstrip Edge explains the how and why to;

1) Identify a trend that you are PERSONALLY familiar with (examples include Google,Apple,etc).

2) Wait till the underlying stock price makes an all time high - only THEN get on board.

3) Ignore valuation - (Howard makes an excellent and compelling commentary of why valuation does not and SHOULD not matter) and instead "ride the trend".

This is the formula Howard uses that enables him to find those rare winners that are able to move THOUSANDS of percent. The book goes on to explain his method for exiting a stock (gradually selling into the strength over time so as not to be a *pig*).

The only points in Howard Lindzon's book I did not personally agree with were his opinion that investors should not "short" stocks (downtrends are trends after all). I also do not share his view of not using technical analysis. But it is refreshing to learn that Howard Lindzon is part of a *new* breed of investors - not because of his investment philosophy but because of his real time transparency via Stocktwits. If you have been able to utilize Howard Lindzon & Soren Macbeth's excellent Stocktwits - you will see that the REAL Howard Lindzon trades both long and short. He also shows that his natural instincts for entering and exiting stocks is superb. This is something that can ONLY be learned from experience- It is an "art", not a science and it is here that Howard Lindzon shows that he is a true artist.

I highly recommend this book to anyone who has any vested interest in successful investing. Everything that Howard Lindzon explains in his book just makes sense.

Let me know what you thought of the book - "@" me on Twitter

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