Stock Market Wizards: Interviews with America's Top Stock Traders (2009) | Trading Book summary

The third in the best-selling Market Wizards series, this time focusing on the barometer of the economy—the stock market.



Elite traders featured in the book:




• Stuart Walton - An options trader who nearly wiped out twice. He recovered from these setbacks to achieve great success using a flexible trading approach that adapts to changing market conditions.


• Michael Lauer - A former analyst who was a member of the Institutional Investor All-Star analyst team for seven consecutive years. Lauer uses a catalyst-driven methodology to identify stocks with extremely favorable return/risk characteristics.


• Steve Watson - Inspired by Peter Lynch, Watson developed a methodology that involves extensive communication with companies, as well as their competitors, distributors, and consumers. He seeks to identify overlooked stocks that are poised to advance sharply well before those opportunities become well-recognized on Wall Street.


• Dana Galante - A 100% short seller, Galante developed her methodology from years of experience on both the long and short sides of the market.


• Mark D. Cook - A former broker who gave up his business to pursue a full-time trading career, Cook developed his methodology from over a decade of detailed notes on his market observations. He primarily trades S&P futures using a diverse array of strategies that have a high probability of winning.


• Alphonse "Buddy" Fletcher Jr. - Fletcher started out by buying restricted stock at a discounted price. He eventually built an investment firm based on innovative strategies that combine carefully structured financing deals with hedging techniques.


• Ahmet Okumus - Okumus has only one overriding goal: to select individual trades that will have a very high probability of gain and a very low level of risk. To achieve this goal, he restricts his selection to the universe of stocks that meet his stringent criteria for both value and fundamentals.


• Mark Minervini - A former floor trader who wiped out in the markets early in his career, Minervini ultimately developed a stock selection methodology that allowed him to realize triple-digit annual returns for five consecutive years. He focuses on identifying high-growth companies with sound fundamentals.


• Steve Lescarbeau - Lescarbeau invests in mutual funds. His goal is to hold them while they are going up and to be in a money market fund while they are going down. He developed unique trading systems that allow him to time these asset transfers with such precision that he more than triples the average annual returns of the funds he invests in.


• Michael Masters - A former competitive swimmer who trained for the Olympics, Masters has a catalyst-driven, quantitative trading model that allows him to identify high-probability trades.


• John Bender - An options trader who questioned the very core premises underlying the option pricing models used throughout the industry, Bender developed a methodology that seeks to profit by betting against conventional option models.


• Claudio Guazzoni - Guazzoni developed a unique, hedged strategy that involves purchasing restricted stock. His fund has never had a losing month.


• David Shaw - Shaw founded D. E. Shaw, a trading firm that uses a complex mathematical trading model based on fundamental and quantitative analysis. The firm utilizes a significant investment in research and very low transactions costs to profit from small market inefficiencies.


• Steve Cohen - Described as "the best" by multiple industry contacts, Cohen has used his trading success to lure traders specializing in a whole range of market sectors. He orchestrates the trading of his firm by combining the information flow provided by this team of select traders with his innate timing skills.


• Ari Kiev, M.D. - A psychiatrist who works with traders at S.A.C, Doctor Kiev helps traders to enhance their performance by becoming aware of personal flaws that may impede their trading success.