YTE provides a roundup of the latest book titles to hit the shelves.

Bulls, Bears and a Croupier
Matthew Kidman (376 pages, J. Wiley and Sons, ISBN: 9780730377559)

Kidman, a former journalist and fund manager, has written ‘Bulls, Bears and a Croupier’ with the next bull market in mind; a bull market he believes is not too far off, with the All Ordinaries Index poised to rise to 15,000. If the alarm bells aren’t ringing already, then statements such as “the sharemarket is one of the easiest games on earth” should get us worried.

The book starts with a short chapter about a former croupier who lost lots of money on shares on more than one occasion before he finally made his millions after buying into a company whose share price was just one cent. The author believes we can learn a lot from this investor, but I do not follow his logic. Apparently, by buying a stock for one cent an investor can lose only one cent. But surely a 100 per cent loss is a 100 per cent loss whether we bought the share for one cent or $100? To me, this is a classic example of a losing investor who goes ‘all in’ by taking a punt. In this instance, he wins. Thousands of others do the same, and lose. However, survivorship bias means the author has not met the others.

There is some interesting information in this book and some back-to-basics tuition concerning reading balance sheets
and understanding profit-earning ratios. However, this is often contradicted by examples such as the one-cent stock...

Excerpted from an article originally published in the Jan/Feb 2012 issue of YourTradingEdge magazine UK. All rights reserved. © Copyright 2012, Your Media Edge Pty Ltd.
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