Tuesday, November 22, 2011

"The Luck Factor" by Max Gunther.....

I have been reading this famous book 3-4 months back and I completed it.
It is a wonderful book to read wherein the Author interviews and met many lucky people and learned about their habits and how they deal and what they do and why they become lucky.
In that he writes about a stock market , a retired stockbroker named C C Hazard.He says he is comfortably rich and people ask him how they too can beat the market.
He refers them his book " Confession of a Wall Street Insider".
One of his major theme is that ordinary small-time plungers-you-and I , that is-cannot gain much by subscribing to advisory services, studying market statistics,drawing charts, listening to economics forecast from Washington,or applying logic in any other fashion.
Hazard holds that the market is an engine of emotion rather then reason, and therefore its movement cannot be predicted by rational means.
How can they be predicted?Sometimes, says Hazard , by hunching."It took me a long time to learn to trust my hunches," he once told me." When I first hit the street in the 1950's I did all that ratioanl stuff - studies the GNP and all that- but I was no righther than if I'd guided myself tosing a coin.Time and again I'd myself going against hunch and ending sorry.All the big pundits would be saying the market going up, and they'd have all kinds of neat logical reasons for saying it, and I'd bet with them even though I had a hunch they were wrong.They would trun out wrong- not always, but enough times to make me start wondering.I finally told myself, "What the hell, if these rational technique are no better than tossing a colin, hunches couuldn't be any worse."
On hunches also Max Ginther writes excellently.
There are rules when to believe in the hunches.He says," Never Confuse a Hunch with a Hope"...If hunch tells you something is true , and if you badly want it to be true, regard the hunch with suspicion.( This is true in all aspect of life)
" A lot of bad hunches are just strong wishes in disguise" says Dr Natalie Shainess.
When you want something a great deal, it is very easy to talk yourself into believing it will happen.
A gambler will tell me , I've got a hunch I'll clean up at the track next week", I ask why he thinks so.He says " Well, I've been losing so long that my luck's got to turn.I can feel it coming." There's no reason arguing with that man.The WISH is the mother of the HUNCH.He goes out to the track, bets the long shots and loses everything he has.

Make Room for Hunches to Grow:
Hunches are made of facts, but they come as feelings.According to Dr. Eugene Gendline, Many people or most are not really in touch with their own feelings.This undoubtedly is a reason why many men and women, perhaps the majority , lack well-developed hunching talent.
Well, it is here where in I read that sell any stocks at 15% loss which Mr Hazard said to Max Gunther in his interview .When stocks goes down by 15% he says it is in downtrend and after observing market for years I also came to the conclusion that in most cases , what he is saying is true and hence I wrote it couple of times here that sell stocks you bought if it goes down by 15% to 20% and you will be most probably right.
I will be reading his book which he use to recomend to people, "Confession of a Wall Street Insider" from C C Hazard.I have just orderd at Amazon and soon be with me.When I read the review , they were just great.

One review says:

 "C .C. Hazard was a pseudonym for a well known stock broker of the time. He didn't really want to go totally public with his story for fear it would alienate too many people, and make trouble for many more, but he was determined to get his story down in print.

His main theme was that he knew from a lifetime in the business that the game of stock investing was not really what the public thinks it is. There is also an underlying reality in the book that portrays those working in the brokerage businesses as the crooks and scoundrels that they were then, and still are now.
Also, he tears apart all of the methods used at the time, including fundamental analysis, technical analysis, the charting, and a few others. As he learned over the years, the only reliable information was "insider" information. And not the corporate kind, but the exchange kind.
His main point was that you simply cannot reliably discern which direction a stock will go over time unless you actually know what the insiders know. The public is not part of that knowledge and therefore must protect themselves from being fleeced.

In the final analysis he tells us to use whatever method we want to pick stocks (since no one method is any good anyway) and to pick stocks that have moved up 10% from a local bottom, and buy it. Then if it continues to go up, fine, but if it goes down instead (some percent) sell it. He uses the example of the "ratchet" which turns in one direction but not in the other.

If you can get your hands on this book, by all means read it. "

This review was written on 2008, means 3 yrs back when world market went in tailspin .Just imagine  what the writer means when he writes like that.....


  1. Market is falling and might keep on falling. But long term is no doubt UPTREND. Which stocks do u suggest to track which we can purchase when fall is done and market starts moving in UP direction(maybe after things in Europe become clear). Whats stocks are in your watchlist to be acumalted over lower levels?

  2. Hi sameer,
    I will soon be coming out with a list which will consist of A gr and B gr stocks.....which looks good in presnt scenario and in future.....