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The Perfect Stock, Brad Koteshwar, 2004, ISBN
1418486884
This is a fictionalized account of the rise and fall of
the stock of a real company. In one year, the stock of Taser International, the
makers of Tasers, rose by over 7000 percent. Despite this, few average investors
made any money on the stock.
The narrator, an experienced investor, is
asked, by another experienced investor, to talk to the people behind the stock,
to get the "inside story." He talks to the CEO, a major stock speculator, and to
the brokerage firm handling the Initial Public Offering, or IPO. He finds that
Wall Street shows a very different side to insiders than it does to average
investors.
By the time Taser was available to the general public, the
big investors had already made their money. Still, it became a "must have"
stock. The price jumped from $50 to nearly $400 per share, and analysts
speculated that the price could reach $1000 per share, so people were ready to
hold it for a long time. Hindsight is always crystal clear, so what investors
should have done, but few investors did, was to buy at, for instance, $100 per
share. When the price reached a specific level, say, $130 per share, sell and
don't look back. Even a small profit on Wall Street is better than nothing. The
worst off were the late buyers, those people who bought Taser near or at its
high, when the stock had only one direction in which to go.
Some
investors engage in short selling, which is betting that a stock's price will
drop. For those people, while on its way down, Taser had an unfortunate tendency
to bounce. It would go down for a while, then suddenly rise by 10 or 20 points.
The price would go down some more, then suddenly rise by another 10 or 20
points, driving those short sellers nuts. Unless an investor is patient, and
really understands the market, which few investors do, even with such an
opportunity as Taser International, few investors made any money.
Obviously, this is a really specialized book. For those who are, or want
to be, involved in the stock market, this book is well worth reading.
Paul Lappen is a freelance book reviewer from Connecticut whose web site http://www.deadtreesreview.com contains nearly 700 book reviews on all subjects, concentrating on small press books.
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