The New Laws of the Stock Market Jungle: An Insider’s Guide to Successful Investing in a Changing World

5 Comments

1. Fred B. says:

   June 15, 2010 at 5:59 am

   I enjoyed this book and got a lot out of it. The author’s insights on how short-selling and derivatives affect stock prices were particularly interesting, as was the chapter on global influences.

   It seems like those who gave negative reviews either didn’t read it or were trying to prove something.
   
   Rating: 5 / 5
2. Rolf Dobelli says:

   June 15, 2010 at 3:10 am

   Investment pro Michael J. Panzner offers an insider’s guide to Wall Street that will appeal to investors on several levels. He starts with easy-to-comprehend definitions of stock market terms such as “short-selling” and “equity-derivative products,” and advances to more sophisticated concepts. With his down-to-earth approach, he demystifies the jargon, hype and superfluous data. What’s more, he provides an excellent account of the historical factors and recent innovations that have altered global finance. His “10 laws of the new investment universe” are useful and comprehensive. Unfortunately, Panzner tends to glorify the past, glossing over well-documented foibles to focus on modern sins. Still, he provides a frank and insightful view of Wall Street’s seductive lure. We recommend this book to investors who want to understand today’s market.
   Rating: 4 / 5
3. Stock Trader says:

   June 15, 2010 at 12:49 am

   This book gives serious investors the sorts of gritty, first-hand insights we have been looking for (but can’t seem to find in too many other places).

   I am impressed with the way the author has taken a series of seemingly unrelated developments (e.g., falling commission costs, the growth of the Internet, electronic trading, the rise of hedge fund investing) and analyzed how they fit together in a broad sense, as well as the impact they are having on the day-to-day action.

   Best of all, the author offers terrific advice throughout the book that clearly reflects the wisdom of someone who has learned (the hard way?) what it takes to make money in the stock market.

   In my opinion, New Laws of the Stock Market Jungle is well worth the investment.
   Rating: 5 / 5
4. R. Tompkins says:

   June 14, 2010 at 10:30 pm

   I thought this book was very well written and extremely insightful. I have been working in the financial markets for nearly twenty years and agree with the book’s premise that the rules of the road have drastically changed over this time period. Mr. Panzner does a very credible of job explaining what is different about current financial markets and why some of the old indicators and maxims are no longer useful. More importantly, he provides some very useful advice on how to increase the chances for long term success in an increasingly short-term oriented world.

   I rated this book a 5 out of 5 and believe it to be a must read for anyone who serious about investing.
   Rating: 5 / 5
5. Mark Mills says:

   June 14, 2010 at 10:00 pm

   I didn’t warm to this book. The author seems to lament the ‘good old days’ when individuals were forced to relay their orders through brokers. This offered brokers a wonderful insight on the directions markets would take since they had first hand information about the next day’s trading session, from the best and worst traders. A broker can make a lot of money with that.

   Alas, these days are gone. People now use electrical order placement systems and brokers are just as clueless as the retail traders. Pity. Of course, few of us had this inside track and I’m not sure we need to lament its passing.

   The musings described above make up the bulk of the book. Here is a summary of the changes. Each of these topics is given chapter long treatment.:

   Intraday volatility:
   
   New rule: Intraday share price volatility is on the rise.
   
   Old rule: In the past, wide intraday share price swings were less common, and when they did occur they were often associated with unexpected geopolitical or economic developments.

   Trading like commodities:
   
   New rule: Stocks are increasingly being bought and sold like commodities.
   
   Old rule: In the past, institutions generally bought and sold stocks based on traditional methods of investment analysis, often with a longer-term perspective in mind.

   Approaches and attitudes:
   
   New rule: Investing and reason frequently give way to speculation and emotion.
   
   Old rule: In the past, institutional buying and selling was primarily driven by logic and measured analysis (although emotions have always influenced investor behavior).

   Information and communications.
   
   New rule: More information and faster communications often have unexpected consequences.
   
   Old rule: In the past, information tended to circulate around the marketplace in a slower and more orderly fashion, and the telephone was the primary means of communication.

   Derivatives:
   
   New rule: Derivatives are exerting a growing influence on share prices.
   
   Old rule: In the past, the action in the derivatives market was generally secondary to what took place in the underlying cash markets (except on certain occasions, such as Triple Witching Fridays).

   Seasonality and cycles.
   
   New rule: Many seasonal and cyclical patterns are becoming less predictable.
   
   Old rule: In the past, many seasonal and cyclical patterns were less widely known and were not affected by today’s rapidly changing market forces.

   Form and fantasy.
   
   New rule: Substance and reality increasingly give way to form and fantasy.
   
   Old rule: In the past, data produced and distributed by companies, analysts, government agencies, and others was less subject to error, distortion, and manipulation.

   Market Indicators:
   
   New rule: Many traditional market indicators are becoming less reliable.
   
   Old rule: In the past, many market indicators were less widely known and were not affected by today’s rapidly changing market forces.

   Global factors:
   
   New rule: Global factors and foreign investors are exerting a growing influence on share prices.
   
   Old rule: In the past, American investors and domestic concerns were much more relevant to the direction of U.S. share prices than overseas influences.

   The book is also sprinkled with ‘action plans’. Here are few:
   
   “…when a stock abruptly breaks out of a clearly defined trading range on relatively heavy volume, creating visual “gaps” on a daily bar chart, this is often a sign that a dramatic change in the outlook has taken place.”

   “When volatility begins to intensify after share prices have fallen for an extended period of time, it often indicates that a downtrend is nearing an end, at least in the short run.”

   None of this interests me a great deal. Upon reflection, the title suggests a much better book, something along the lines of ‘Post 2003 changes in securities trading rules, and how to use them for competitive advantage’. This book would investigate the surreal world of Sarbanes-Oxley, how securities are added/subtracted from the Russell 2000, etc.
   Rating: 2 / 5