A book review - The Stock Market Almanac 2018

[rimmy2000]

Well given IG were so kind in buying me a couple of books for winning ‘Contributor of the month’ I thought I should write a quick piece on one of the books I selected.

 

I was hoping to review Reminiscences of a Stock Operator, but this is taking me a bit of time, that will come later, so apologies for that.

 

I will write up briefly about the Harriman’s Stock Market Almanac, 2018 edition (obviously) and I would recommend it to anyone who happens to win this month

[note to Editor, I think it is fair I self-elect out of the competition this month, by the way. There have been plenty of fantastic contributions this month, and I wish the all well]

 

 

 

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This is the first time I have owned this book, and it is a great trading aid to keep by your computer providing lots of quality statistical information and evidence that can help the investor stack up the odds further in their favour.

 

The first part is a month-by-month assessment of each calendar month, looking at the historical trends for up and down months, the gains recorded as well as important events occurring during the month: for example significant dates, main trends that are noted and even which sectors or shares perform well and not so well over that period. I am currently reading ahead for February to see what that brings – it is a really great way of feeling on ‘the front foot’ so to speak.

 

 

The second part of the book is probably what interests me the most: Strategies.

 

We wrote at length in December on this forum about the famed Santa Rally, and there is a piece on Santa Rally in the forum. Other than covering the Christmas period, this book looks at statistical trends that seem to have sufficient evidence in their favour to make it worth giving them a go. Have a look at the image below:

[image]

Things like Tuesday reverses Monday sound really intriguing, especially to an indices trader for example. Simply put: if Monday is negative, then how probable is it that Tuesday will be an up day?

Sell in May. Did you know, for example, that if you had invested £100 pounds into each of these accounts:

Summer Portfolio (May – October) FTSE All Share

Winter Portfolio (Nov – April)

 Then the summer portfolio would be now worth £70, whereas the winter portfolio would be worth £326! The book looks at how this strategy would work, and considers factors that may account for or influence those differences. In a word, it is really interesting.

 

 

Finally, the third part of the book – which makes up approximately half the book, btw- looks at a whole host of trends and analysis. EG

• how the last trading days of the month fare (eg today, 31 Jan)
• How does the market behave around major holiday periods.
• Is there such a phenomenon as the ‘January Effect’
• How have certain sectors performed over the last 10 years. Any trends..

 

There is a lot of information here, and depending on your tolerance for statistics, you may either loathe it or love it. I sit somewhere in the idle, finding it curious and at worst a good mechanism for making me think before I place a trade… “is there anything that statistically means this is now a good/(or bad!) time to place the trade. Quickly consult the manual.

 

We play a game of odds here and this book certainly will help you to stack up a bit more in your corner before making an investment decision. I would thoroughly recommend it and expect I will be using it through the year and buying it come 2019!

[rimmy2000]

I ordered that book too . Not read it yet. got a backlog!!

[phillo]

Lovely & well done "winning it"

[oilfxpro]

I would  throw a bit of caution .The current bull market in stocks is due to low bond yields and Trump tax  promises, sending money into stocks.Don't expect this to continue, because corporate are going to suffer with greater pension burdens and liabilities, sending future earnings lower.

 

The bull market may continue, just be cautious.

[JamesIG]

Great post and well deserved on this. Noted your request as well. Also just a small heads up for transparency, I made a minor edit to the post by spinning the pictures 90 degrees - hope that was ok.