Customer Reviews

The Perfect Stock: How A 7000% Move Was Set-up, Started And Finished In An Astonishing 52 Weeks

5 star:		(10)
4 star:		(2)
3 star:		(2)
2 star:		(1)
1 star:		(2)

 

 

The Perfect Stock is a fine complement for any of the good introductory books about becoming a stock investor, such as How to Buy Stocks and Common Sense about Mutual Funds.

Mr. Koteshwar has built an entertaining story around the rise and fall of Taser's stock through early 2004. In the story, his protagonist is a freelance stock analyst who is hired to check our Taser just before the stock tops out. In real life, Mr. Koteshwar's investment newsletter called the top to the day so we can assume that some aspects of the book are semi-autobiographical.

Through the course of the novel, you will learn how a bubble is built and burst on a given small stock. He provides perspectives on the founders, the investment bankers, the pool players who run the stock, hedge funds who play the run, and the little guys and gals who get taken to the cleaners. From this perspective, you will learn many important lessons about how speculators profit from momentum (stocks that are rising rapidly on increasing volume) plays and what to watch out for. I especially liked the way that the book described the trading strategies and profits of those who played Taser from different perspectives.

Although this is not an investment guide per se, unless you ignore the lessons in the book you cannot help but become better informed about how to evaluate a momentum play . . . and to protect you from making major mistakes.

The methods involved are ones that I have known many successful investors to use . . . and the failed efforts are ones that I have heard many stock brokers describe as the failings of some of their clients.

Where are the clients' yachts?

There are plenty of technical books for the stock investor on the market today. This one takes a totally different approach for teaching the basics of stock investing and how the market moves by following the characters in a fictional novel. By reading the various actions they take, the reasoning behind those actions, and the how they adapt to changes the reader comes to understand the basics of the stock market. If you are not a technically inclined person and don't want to get bogged down in trend analysis, price/earnings ratios, or other more complex methods of explaining the market then this book is a great way to get a handle on what goes on. If you want insight into how Wall Street works for both the insiders who understand it and the outsiders who don't then The Perfect Stock is an easy and illuminating read.

In recent years, there have been several books published which focus on what is generally referred to as "the business narrative." They include Annette Simmons' The Story Factor and three written by Stephen Denning: The Springboard, Squirrel, Inc., and The Leader's Guide to Storytelling. I mention this because Koteshwar uses narrative to examine a number of real-world situations with devices normally employed by fiction writers. In this volume, we have no mice searching for relocated cheese or squirrels quarreling over strategy and positioning. Rather, Koteshwar shares with his reader various lessons which can be learned from successful and (especially) from unsuccessful investments in the stock market. Others are better qualified than I to comment on Koteshwar's expertise. I shall limit my attention to what I found of greatest value.

First, Koteshwar makes a convincing case for having patience, either when trading stocks or when tracking those another has purchased for you. Also, he leaves little doubt that trading requires far more attention (e.g. research) than many investors are willing and/or able to commit. For that reason, the selection of a broker seems at least as important as the selection of a given stock in which to invest. However, Kateshwar helps investors such as I to understand the rules of what really is an immensely complicated "game." Scores are kept. There are winners and losers. Timing and luck are often key factors. That said, it is highly desirable to understand the "rules" of stock trading, either when selecting investments or collaborating which an intermediary. Also, Kateshwar disabused me of my tendency to think of "Wall Street" as a location where financial "wizards" resemble medieval alchemists who convert "base metals into gold." Finally, Kateshwar helped me to understand that there is no "perfect" stock. However, if selected with meticulous care, there is for almost any investor a stock (or stocks) most appropriate to that investor's specific circumstances, resources, timetable, and ultimate objective(s).

Invoking athletic metaphors, I presume to suggest that some investors are sprinters, others are milers, and still others are marathoners. The shorter the course, the greater the rewards...and yes, the risks. To me, the compelling value of Kateshwar's book is derived from his behind-the-scenes insights into the investment process. His business narrative is by no means riveting but consistently informative. No mean feat.

Amid the sounds of the surf California sun-tanned young men and women dream of the perfect wave as they surf in the Pacific Ocean. There is something closely akin to this in financial markets. It is the quest for the perfect stock. Investors envision that ideal experience, and with one distinct difference between the financial dream and the quest for the perfect wave. Investing in the perfect stock under the right circumstances can bring with it all those trappings of wealth, those champagne wishes and caviar dreams that Robin Leach spoke about in his hit television series of a few years ago, "Lifestyles of the Rich and Famous."

Veteran financial analyst Brad Koteshwar in "The Perfect Stock" writes about the search for that dream among investors, the modern day equivalent of gold prospectors deluging California in the nineteenth century. The book is based on how a 7000% move was set up, started and finished in an astounding 52 weeks, and what it took to bring about such a fantastic result.

Koteshwar's book would be worth reading for just a few of the homilies he passes along after a long background experience, but there is much more. He examines the entire psychology behind the stock market and how shrewd analysts from the biggest companies, using superb marketing technology and incorporating investment ploys they hope those from outside their small orbit will never learn, benefit from this intelligently applied teamwork while the vast body of investors swept up in a continuing frenzy meet with economic failure.

The word Koteshwar stresses throughout and the one used by seasoned market professionals willing to share their knowledge with others is "patience." In the personal examples the author uses of individuals swept away in their pursuit of the perfect stock, Taser in this instance, the fictional one that the author tracks in his analysis of broad market impulses, this is the word that is either unspoken or, in the rare instances that it is, is considered anathema.

It is understandable why these excited investors, swept along by an emotional tide, do not want to hear the word patience. As Koteshwar points out, those marketing the stocks are aware of human nature and play their hand consistently in that direction. The whole psychology behind American progress and innovation was predicated on taking a chance. Rather than waiting patiently, working diligently to achieve quick and comprehensive results, many believe that a jackpot stock market payoff lies just around the corner as long as an investor acts quickly.

Knowing human psychology, marketing is shrewdly crafted to convince investors that opportunities are limited and that only the swiftest participants win the race. It is therefore imperative to jump aboard at the earliest point. Rather than encourage investors to study the book value of a company listed on the stock exchange to determine if there is commensurate real value behind the current price of the company under consideration, fast talking salesmen seek to convince potential investors that they will rue the day that they failed to act on opportunity if they do not move swiftly.

This psychology is exploited in two different directions. If the stock is relatively new, the promotion campaign is getting off the ground and activity is just commencing, then the argument is that one needs to get in on the ground floor as the stock is preparing to take off like a rocket. If it has already been elevated in price and has been available for awhile the argument shifts to a more urgent, "You see how others have benefited. Well, unless you jump aboard now you will lose your chance to get make big money on this stock and you will kick yourselves afterwards!"

What about situations where the stock is beginning a downhill slide? A different argument is frequently posed. We have no more than a correction in effect, and how lucky you are. When the potential investor asks what is lucky about this scenario, the glib response is straight to the point. Just look at how this stock performed earlier and how many people made money on it. This ought to tell you its value. Now that we have a little adjustment period and it is going down temporarily then the opportunity is ripe to climb on board at a lower price than during peak period. You then need to wait for this previous moneymaker to return to its former winning ways. This is the one scenario where patience is stressed, but in a self serving and less than candid way.

Koteshwar provides examples of individuals who made money during the productively performing period of Taser, but then lost tremendously in the long run. Rather than accept a modest profit they believed they could anticipate peak level. Their incorrect guesses over how high the stock would go resulted in huge losses.

The author has his own online newsletter, which he began in 2001 during the height of a bear market, at breakout123.com. He recommends a strategy of prudence coupled with arming oneself with knowledge of the market, which will hopefully serve as a protection against the dangers of emotional enthusiasm in the pursuit of quick riches.

I am trading since 1979 and have read many books since I began trading. This is a great book. It is very simple and gives the gist of successful trading. I do not agree with the anonymous trader from Hawaii. All I need is just basic price and volume action to see the primary trend. The fundamentals are a lagging indicator and usually come up after the primary trend has already begun. In fact, many stocks top out at the peak of their fundamental strengths. Moreover, most of the true lessons are hidden and may escape the so-called technical trader because the book is written as a novel. Being immersed in the story, it is easy to miss the lessons.

OK, not quite perfect, yet this book pieced together a lot of concepts I had previously been missing. It's a fictionalization of how insiders/ outsider did/may have acted during the TASR phenomenon.

This book is a perfect complement to some of the other classics such as O'niel's and Darvis's. It will fill in some of the missing bigger picture of how insiders and outsiders may be acting and reacting to these phenomenon's.

This is not a 'get rich quick book' nor 'yet another how to invest book'. This is an indepth look at one perfect stock and provides many complements to other literature out there. If you get some program and look at the chart and the buy points, the amount you could learn from him is specatacular. Also, I really liked the section on the outsiders, as it shows many of the mistakes people make. He also has another book called 'The Perfect Speculator' which tells a little more about how to look for stocks like TASR.

I really enjoyed the book. It is written in simple language for anyone to understand. Some of the lessons are obvious but many others are hidden. I have been involved with the market for over 25 years and I found the book enlightening. It was fun to read without the usual jargon that comes with books on investing.

This is a fictionalized account of the rise and fall of the stock of a real company. In one year, the stock of Taser International, the makers of Tasers, rose by over 7000 percent. Despite this, few average investors made any money on the stock.

The narrator, an experienced investor, is asked, by another experienced investor, to talk to the people behind the stock, to get the "inside story." He talks to the CEO, a major stock speculator, and to the brokerage firm handling the Initial Public Offering, or IPO. He finds that Wall Street shows a very different side to insiders than it does to average investors.

By the time Taser was available to the general public, the big investors had already made their money. Still, it became a "must have" stock. The price jumped from $50 to nearly $400 per share, and analysts speculated that the price could reach $1000 per share, so people were ready to hold it for a long time. Hindsight is always crystal clear, so what investors should have done, but few investors did, was to buy at, for instance, $100 per share. When the price reached a specific level, say, $130 per share, sell and don't look back. Even a small profit on Wall Street is better than nothing. The worst off were the late buyers, those people who bought Taser near or at its high, when the stock had only one direction in which to go.

Some investors engage in short selling, which is betting that a stock's price will drop. For those people, while on its way down, Taser had an unfortunate tendency to bounce. It would go down for a while, then suddenly rise by 10 or 20 points. The price would go down some more, then suddenly rise by another 10 or 20 points, driving those short sellers nuts. Unless an investor is patient, and really understands the market, which few investors do, even with such an opportunity as Taser International, few investors made any money.

Obviously, this is a really specialized book. For those who are, or want to be, involved in the stock market, this book is well worth reading.

What a treat this one is. I am still amazed of how much wisdom, market knowledge and technique has been crammed into this little book - and in what way.
It has all the information about the inner workings of Wall Street you may look for. It has all the information you may ever need to become a great speculator. Whether you are truly willing and ready to implement the lessons is a whole different matter.
One of the great things aboout it is that the lessons are taught by introducing "real life" characters which makes it so much easier to learn and remember.
Darvas had two books he was re-reading on regular basis just to stay disciplined. I do the same with three books and this is one of them. I am deeply grateful to Brad for writing this one.
If you are into growth stocks, trust me - this is the one you were looking for.

Thanks again Brad and good trading to all.

If you are a student of the market you must add this book to your stock trading library. The author documents the entire run of TASR in 2004. From the timing of the IPO release, how the sponsoring brokerage house set up buyers to support the price, and all the players involved from modern day money pools to professional traders. He gives excellent lessons on how the great traders played it for huge wins, and how amateurs lost a lot of money buying in at the wrong time. He shows how people who initially made money got back in and gave back all their profits then lost money. He shows how great traders sold into the huge volume spike near the peak then reversed their position and went short to double their profits. Students of Nicholas Darvas, William O'Neal, and Jesse Livermore will really enjoy this book, it feels in the behind the scenes action that really moves the markets. While the writing style may not be the best and the book may have some uncorrected typos, the content is outstanding. 5 strong stars. One of the top ten books I have ever read on stock trading.