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Blink 3 of 8 - The 5 AM Club
by Robin Sharma
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Trade Like a Stock Market Wizard summary
Mark Minervini
How to Achieve Super Performance in Stocks in Any Market
15 mins
Brief summary
Trade Like a Stock Market Wizard by Mark Minervini is a comprehensive guide for traders who want to succeed in the stock market.
It outlines Mark's personal trading strategy using technical analysis and provides insight into his mindset and risk management techniques.
Table of Contents
Trade Like a Stock Market Wizard
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Key idea 1 of 5
Focus on earnings.
You’ve probably encountered the phrase, “buy low, sell high.” If so, you may have thought that 2009 was the chance of a lifetime to snap up shares in then-blue-chip companies like Citigroup, Lehman Brothers, General Motors, and American International Group (AIG) as their prices dipped to historic lows.
But then, it could have also been a sign that the value of those companies was dropping. The financial crisis saw AIG crash from $103 to 33 cents in the span of two years; it was struck from the Dow Jones Industrial Index in September 2008, as was Citigroup in 2009. The price of GM sank 95 percent in 2009, too – a loss that brought it back to its 1933 worth and also warranted its elimination from the Dow Jones Industrial Index.
There’s an important lesson to be learned here: the stock market doesn’t care about pedigree, only track record. The measurement in the marketplace is growth. Don’t let yourself be persuaded into investing in a sinking stock simply because of its name recognition or reputation. In many cases, such stocks belong to the past; the future may belong to companies with names you’ve never encountered.
Ever heard of the cockroach effect? If you live in New York City, you might know that once you see one, it’s game over – there are bound to be others, too. But this principle can be flipped to the positive. If a company’s quarterly earnings are unexpectedly greater than analysts had predicted, there is likely more good news. If a breakout company seems to be on the upswing, it might mean you should pay attention to that industry as a whole.
Such surges of attention and prospective success may lead to an influx of institutional investment in a stock before the actual numbers even come out. This can be a successful earnings-boosting strategy. And if the speculation is well-founded, that probably means the numbers will keep going up the next quarter, too.
Guess what? This contagion effect is just as applicable to less sunny surprises. Companies that fail to meet their estimated profits will often continue to disappoint in the next cycle. So when you’re starting to put together a roster of potential companies to invest in, focus on those that have exceeded their earnings expectations in the last few quarters. To put it simply, avoid those that have a negative mirror effect, and invest in those that have had positive signs of growth.
This might seem like obvious advice. But in the next section, we’ll see why it’s more counterintuitive than you’d think.
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What is Trade Like a Stock Market Wizard about?
Trade Like a Stock Market Wizard (2013) is a guide to the SEPA (Specific Entry Point Analysis) investment methodology. It navigates you through managing risk, maximizing profits, and, most importantly, having faith in your own ability. You don’t have to be a professional to get started in the stock market – in fact, your status as a lay investor might actually be your biggest strength.
Trade Like a Stock Market Wizard Review
Trade Like a Stock Market Wizard (2013) by Mark Minervini is a book that provides valuable insights for traders looking to achieve success in the stock market. Here's what makes this book worth reading:
- Packed with practical strategies and techniques, it equips readers with the tools they need to trade stocks like a market wizard.
- Through real-life examples and case studies, the book offers a glimpse into the mindset and approach of successful traders.
- With its engaging and informative content, this book is anything but boring, helping readers stay motivated and focused on their trading journey.
Who should read Trade Like a Stock Market Wizard?
- Anyone curious about how to get started in trading
- Stock market geeks
- Seasoned wealth managers
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Trade Like a Stock Market Wizard FAQs
What is the main message of Trade Like a Stock Market Wizard?
The main message of Trade Like a Stock Market Wizard is that anyone can achieve stock market success with the right strategies and mindset.
How long does it take to read Trade Like a Stock Market Wizard?
The reading time for Trade Like a Stock Market Wizard varies, but it typically takes several hours. The Blinkist summary can be read in just 15 minutes.
Is Trade Like a Stock Market Wizard a good book? Is it worth reading?
Trade Like a Stock Market Wizard is worth reading for its valuable insights and practical techniques for successful stock trading.
Who is the author of Trade Like a Stock Market Wizard?
The author of Trade Like a Stock Market Wizard is Mark Minervini.
What to read after Trade Like a Stock Market Wizard?
If you're wondering what to read next after Trade Like a Stock Market Wizard, here are some recommendations we suggest:
- How to Make Money in Stocks by William J. O'Neil
- Make Money Trading Options by Michael Sincere
- How to Day Trade for a Living by Andrew Aziz
- The Little Book of Common Sense Investing by John C. Bogle
- The Little Book of Market Wizards by Jack D. Schwager
- The 5 AM Club by Robin Sharma
- Reminiscences of a Stock Operator by Edwin Lefèvre
- Thinking, Fast and Slow by Daniel Kahneman
- The New Trading for a Living by Dr. Alexander Elder
- The 7 Habits of Highly Effective People by Stephen R. Covey