Customer Reviews

The Vital Few vs. the Trivial Many : Invest with the Insiders, Not the Masses

5 star:		(15)
4 star:		(3)
3 star:		(2)
2 star:		(1)
1 star:		(1)

 

 

Why do so many people lose money in the stock market? It's really simple, they don't read and study books like this one that give such logical and simple advice. The average person simply doesn't spend the time to understand what they are doing and many of those that follow the markets more closely get overly optimistic and allow emotion to take control.

Mr. Muzea writes in a basic and easy to understand style and includes many short anecdotal stories to flavor and explain his reasoning. I found the book to be forthright and entertaining.

His basic premise is that large investing insiders can give huge clues to the over or under valuation of a stock and by following their lead, along with some basic technical analysis one can greatly increase his chances of selling near tops and buying near bottoms. He runs a service and newsletter that gives up to date information and advice, however I didn't feel like this book was at all a selling tool for his service (like I've found in some other investment type books). This book can stand on its own and one quick reading can easily make an investor money and/or save an investor from loss.

The author has developed a method he calls the "Magic T" it's not a hocus pocus for divining what stocks will win and which will lose, but rather a basic decision making device (much like a pro and con sheet that is a bit more advanced). How he applies this to investments is, by its self, well worth the price of the book.

All in all I give a strong recommendation for this book to any investor or trader that is looking to improve their profits as well as to any that are considering entering the market for the first time.

Most of the professionals and causal investors are still trying to find a proven mathematical formula or technical system to make money in the financial market. You will be disappointed if you are trying to do the same with any books.

When it comes to investing, I don't think such a formula or system exists. Just look at how Nobel Prize winner and "genius" failed at LTCM. Human nature plays a key role in the financial market, and we are far form coming close to develop a mathematical model in human thinking. Thinking participants keep the rule of the game changing. Therefore, the only certainty is change.

The key objective of this book is to present a systematic approach to improve our probability of success in identifying safe entry and exit points in the financial market. We have to bear in mind that the method only enhances our probability of success, but there is still no certainty.

With the help of Muzea's methodology, I identified an opportunity to short Euro in March 2005, I cashed out a large part of my energy position when oil hit $70 in Sept 2005, and I stayed away from the stock market during brutal correction in Oct 2005. The tax loss buying strategy in Appendix B also helped me to make a quick 7% profit between Oct and Nov of 2005. I think the result speaks for itself.

All I did was to find out if there were divergences between the actions of the Vital Few (insiders) and that of the Trivial Many (masses). Information is always in the divergences.

The Magic T method highlights in Chapter 8 also helped me to make career decisions. The essence of Magic T method is to remove emotional influence when it comes to decision making, be it financial, business or personal. I just wish my father had taught me this method 20 years ago.

I personally have a few emails exchange with George Muzea. He has a genuine interest in helping financial novice like me to become a better investor. I think he is a noble man.

The money I invested in this book has paid off a thousands time over in a matters of months. I have read over 100 books in investment, but this one comes at the top of my list. I actually re-read the whole book every few months to refresh my memory. I want Muzea's wisdom to be ingrained in my mind so that it becomes automatic. I just ordered a spare copy as my old one has worn out a bit. Unfortunately, it does not come with a hardcover edition.

Muzea's wisdom is timeless and an all-time classic book!

I rated it a 6 Star.

When I read a book about contrarian investing some twenty years ago, I was hooked by the concept. But to execute it as a fund manager, I found most books in this category failed to address the how-to part. The Vital Few does just that. It provides a tool call "The Magic T" which a lay investor can "systematically" make a decision without requiring any knowledge in investment. By the way, according to the author, having a basic background in technical analysis will help to confirm the result.

The book's idea is simple. It was written in an autobiography style with some "hard-core" substances at the very last chapters. For those who want to have a simple tool to beat the stock market, this is a book for you (whether the Magic T is time-tested or not is another issue). For sophisticated investors, the Magic T might be another item in their decision tool boxes.

One caveat for academic readers: you will not find anything theoretical inside. There is nothing in the book that you can use as a reference in your paper. In fact, if you are not an investor, you might find reading of this book a waste of your time.

This book makes a succinct but strong case for why insider activity is critical to capturing gains in the stock market.

Previously one who only casually glanced at 13DS durng the arduous, stock selection process, I know pay MUCH more attention to what the insiders of a company are doing before I either buy, short, or solicit a stock....

This book's a hidden gem among the piles of investment books currently crowding the market.

It's a quick, but informative, read.

You'll find yourself applying its lessons to the real world as soon as you finish it.

I first heard George Muzea describe his techniques as a guest Market Monitor on Nightly Business Report with Paul Kangas (on PBS). I was intrigued enough to write down the name of the book (1st version) and ordered it a little while later (Fall of 2003). The book was short, concise, but powerful in its assertions (I have since ordered and read the revised edition which includes additional information on combining technical analysis with this strategy).

I tracked many former high flying stocks into the depths of 2002-early 2003 and later was dismayed at a few really great buying opportunities missed as many stocks bottomed out. While other reviewers have noted that George Muzea used his Magic T technique to suggest a great buying opportunity there, what was more revealing about this strategy was looking back into the chart data and insider trading activity from 2002-2003 and finding the specific types of insider buying evidence to support signaling some exceptional gains in many issues.

Making profitable use of this strategy requires hard work, study and patience (like anything worthwhile). Don't confuse this for a simple insider trading recommendation service. If you have the time and ability to learn to do this yourself, understanding and using Mr. Muzea's techniques, as detailed here, can prove very rewarding.

I also got sucked in by all the other positive reviews. Here is the key takeaway from the book: buy when insiders are making meaningful open market purchases, and sell when they are making meaningful open market sales. Whether or not that is an insight for you, save your money. I expected much more. His favorite source for insider trxn info? Yahoo Finance. Gee, thanks. The rest of the book is complete fluff: anecdotes from the author's life, a primer on technical analysis (oh please), and his silly "Magic T" decision-making system. If you are curious about "Magic T", I can summarize that for you as well. Suppose you have to make a binary either/or decision: make a list of the five positive expected outcomes for each of the choices, and then rank each of these ten outcomes from 10 (most important) to 1 (least important). Sum the ranks, and the higher sum is your preferred choice. Insightful, huh? My promise to you, dear reader, is the following: If you buy this book, after reading it, you'll be thinking, why didn't I listen to that guy?

This book gives a few useful insights about interpreting insider trading for making better investing decisions. Almost every thing you need to know from this book is summarized in two pages (pages 106-107). The rest of the book is a lot of repetition and many useless stories that add no value what so ever.

The book's main idea: invest when insiders are buying, get rid of shares when they are selling. The source of insider transactions - Yahoo Finance. The author uses insider transactions as the sign of impending turnaround of shares that have been declining in price for a while. I guess the approach is valid, and insider transactions should be taken into consideration when buying shares.

In short, this is another approach to investing/trading and could be used in combination with other methods. The book, though short, could be even shorter and should rather be a chapter in more comprehensive text. Then again, it tells you how to profit, and fifteen bucks is not much to pay for an investing idea.

So many times traders are looking for that one indicator,one piece of software, or one "guru" who is going to give them the secret to the sphinx. I speak from experinece. As non profitable day trader, scalper,swing, and postion trader over the last 5 years, I am finally starting to "get it." As cliche as it may be trading is an art and not a science. That is why I like Mr. Muzea's book so much. It is straight forward,and makes "no claims". I believe that contrarian thinking has a place in my trading arsenal. Also, the book helped me to view the media as not an advesary (see the late 90's) but a friend. As painful as it seems I have started to watch CNBC again after 3 years haitus.
Mr. Muzea's book is a bargain, and a great tool to anyone who wants to learn about contrarian trading and thinking.

I bought George's first edition as well as this one, in my view his book is a must read for any one who want to manage his/her own money. If you follow his advice, you will have a much greater chance to pick a winner. I couldn't tell you how much more confident I have gained from this book. It is day and night. The title of the book said it all.