The Nature of Risk (Fraser Publishing Library) (Contrary Opinion Library) [Paperback]

Justin Mamis (Author)

Book Description

Series: Contrary Opinion Library | Publication Date: November 19, 1999

Sometimes the biggest risk of all is taking one, and the need to be sure you are making the right choice actually increases the risk. The market is not efficient and hedging doesn't work. To rely on charts to understand the market is Mamis' way. The author is an excellent market technician who offers sound financial guidance and insights into the prepared mind. He gets your thinking going with a comfortable investment philosphy that will often go against convention. There are enough anecdotes, war stories, and charts to make for sound advise. The path to market freedom is technique, and you don't have to be one of the best traders to succeed with experience. It seems to me that the entire 1990s have confirmed the ambiguities of market language and how to operate in such a world. You will know how to keep risk at bay which most of us find not to be an easy task. 241 pages.

Editorial Reviews

From Kirkus Reviews

A veteran Wall Streeter, Mamis argued for technical (as opposed to fundamental) analysis of stock prices in When to Sell (1977) and How to Buy (1982). In the charmingly existential text at hand, however, he goes well beyond his demandingly interpretive discipline to reflect on larger issues. To achieve success in either life or the market, Mamis points out, individuals must act before they know enough, meaning there are hazards involved. He observes, for instance, that investors who hesitate may catch only the last 20% of a bull move and thus assume a disproportionate share of risk. Among other problems, the author notes, those under pressure (i.e., at risk) often let emotion determine their responses. Since experience instills concern as well as confidence, he says, many people (having been coerced into socially acceptable behavior patterns since childhood) become paralyzed at critical junctures in their personal and financial lives. Taking as a given the premise that ``the market climbs a wall of worry,'' Mamis advises readers to trust their intuition (not instincts) whether trading equities, falling in love, or engaging in other more or less gainful pursuits. Incurring informed risks, he asserts, can prove a liberating proposition whose reward is not necessarily a payoff, but a balance. By this, Mamis means the satisfaction that accrues from playing a game (or role) to win, rather than not to lose, from start to finish. In addition to an abundance of Zen-like pronouncements (e.g., ``death is the extreme of risk''; ``like sex, money distorts our senses''), he offers a full measure of contrarian counsel on a wealth of subjects--from gold (a commodity Mamis cites as an impotent hedge during recent market breaks) through indexing (an investment approach that reduces responsibility without curbing risk) and diversification (a system ``designed to protect the dumb''). Thought-provoking perspectives on the market and life as tests that never end. -- Copyright ©1991, Kirkus Associates, LP. All rights reserved. --This text refers to an out of print or unavailable edition of this title.

About the Author

After serving as Assistant Director of the NYSE Floor Department, Justin Mamis founded and edited The Professional Tape Reader in 1972, selling it in 1977 to its current editor with thoughts of retirement. Instead he spent several years as an "upstairs" Member-Trader for Phelan, Silver, an NYSE specialist firm and subsequently settled into his roles as market advisory letter writer, forecaster, and philosopher on behalf of Wertheim & Co., and then Gordon Capital. He then became Senior Vice President and Chief Market Technician at Hancock, where he wrote his weekly Mamis Letter. Quotes from the Mamis Letter appear frequently in Barron's and The Wall Street Journal and his often heretical and usually grumpy comments can be heard from time to time on CNBC. Among his credentials he has been voted for several consecutive years to the Institutional Investor "All-Star Team" in the categories of Market Timing and Market Technician. Justin continues to write his market letter and do forecasting and philosophizing.

Product Details

• Paperback: 241 pages
• Publisher: Fraser Publishing Co.; 2nd edition (November 19, 1999)
• Language: English
• ISBN-10: 0870341324
• ISBN-13: 978-0870341328
• Product Dimensions: 8.2 x 5.3 x 0.6 inches
• Shipping Weight: 11.2 ounces (View shipping rates and policies)
• Average Customer Review: 4.3 out of 5 stars  See all reviews (15 customer reviews)
• Amazon Best Sellers Rank: #627,893 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

51 of 51 people found the following review helpful:

5.0 out of 5 stars Epiphany, anyone?, January 14, 2000

By 

dbphoenix (Phoenix, AZ United States) - See all my reviews

This review is from: The Nature of Risk (Fraser Publishing Library) (Contrary Opinion Library) (Paperback)

The Nature of Risk is a seminal work for anyone who understands that self-knowledge is key for success in the financial markets, particularly at market extremes. Rather than babble about risk in general, Mamis takes this engine apart and examines its parts, among which are information risk and price risk. He explains that as one's tolerance for information risk increases (the need to know why the stock is doing whatever it's doing), one's price risk diminishes (one is better able to jump in and take advantage of whatever opportunities for picking up cheaper shares present themselves). On the other hand, if one has no tolerance for information risk and must know everything about a stock's movement, his price risk will be that much greater because the price will likely, by then, have risen to an over-extended level. Therefore, having identified these components of risk (time risk is another), one must then balance them out in order to approach the markets rationally and unemotionally.

An extremely important work, particularly for the investor who is plagued by doubt, confusion, and anxiety.

25 of 25 people found the following review helpful:

5.0 out of 5 stars Still near the top of the list, January 10, 2004

By 

dbphoenix (Phoenix, AZ United States) - See all my reviews

This review is from: The Nature of Risk (Fraser Publishing Library) (Contrary Opinion Library) (Paperback)

It's been four years since I first reviewed this book (see the next to the last, below), and I still consider it to be absolutely essential for anyone considering any sort of involvement in the financial markets. In fact, it's probably essential for anyone who is considering anything at all that entails more than minimum risk.

The amateurs miss the point. This is not about the best stochastic settings or how to massage the bid and the ask. This is about facing up to the very real risks inherent in the financial markets, including the very real risk of financial ruin. Amateurs don't see the risk; therefore, they don't bother to grapple with it. Instead, they would rather blow up and disappear. If one wants to last, he must come to terms with the nature of risk, his own tolerance for risk, an understanding of how to manage risk. Without that, he's doomed.

20 of 20 people found the following review helpful:

5.0 out of 5 stars Insightful, a pleasure to read, December 3, 1999

By A Customer

This review is from: The Nature of Risk (Fraser Publishing Library) (Contrary Opinion Library) (Paperback)

I read the first edition of Nature Of Risk many years ago while in college developing a thesis about markets, the media, and mass behavior. This book helped me to sharpen my thinking on those topics, but it also was a sheer delight to read and reflect upon. It gently guides readers to consider their own risk-acceptance (and denial) behaviors in the face of everyday events and circumstances (one of which just happens to be the financial markets). Nature Of Risk is *not* a book that will help you to "win in the markets." But it is a pleasure to read. There are very few writers - especially financial writers - of Mamis' caliber, precision, and throughfulness.