Tuesday, November 08, 2005

'Winning On Wall Street'

I recently stumbled across this book by Martin Zweig, a mutual fund manager who was quite well-known and respected in the '80s and '90s. It is simply amazing, especially for people like me who focus on fundamentals and have little or no idea on technical investing.

The most interesting aspect of 'Winning on Wall Street' is that, based on research into the long history of the Dow, Zweig outlines a set of parameters as well as a complete forecasting model that he used to forecast the onset of bull and bear markets on a consistent basis!

Imagine that - wouldn't you like to be able to tell when an upsurge is an aberration and when it is actually the start of something big and so get into the market early? Or when a small dip might be leading to a major market decline?

The only issue is that the model is based on the Dow and hence the triggers might not work for the Sensex / Nifty, though the parameters (like interest rates etc.) are universal. It needs someone to work out the values at which the Indian markets make their moves, which might not be possible as the Sensex data goes back only 20 years.

Would be worth a try, though. Even better would be marrying such an India-specific 'Zweig' forecasting model with a working stock-picking model based on fundamental analysis in order to get truly spectacular results.

The key takeaways for me are the list of parameters to consider when evaluating market moves and the relationships between them as proposed in the model.

The book is a little academic in nature, but simply written and definitely very high up in the list of investing books to read.

Note: For a list of other good books, please check out my previous post on the subject

4 comments:

Anonymous said...

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Great news :
Bennett, Coleman and Co. bought 9% stake in SQL Star ... guys 25 days target is 60... good to buy
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best buy ... SGN Telecoms and SQL Star ... 20% returns in 15 days
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Shankar said...

Do go thru the article by Warren Buffet on "The Superinvestors of Graham and Doddsville". The link is http://www1.gsb.columbia.edu/valueinvesting/research/public_archives/DOC032.PDF

Amit said...

Thanks, Shankar. Will do

Anonymous said...

SQL Star -- target price in 10 days Rs. 52

SQL Star -- target price in 10 days Rs. 52

SQL Star -- target price in 10 days Rs. 52

SQL Star -- target price in 10 days Rs. 52