CHAPTER 1

The Enigma of Stock Markets

As you gain experience, you can better plan your trades. Then trade this plan until you refine your strategy.

Start by Building a Foundation of Knowledge

Many years ago, when just starting out as an equity analyst, I discovered that many clients in general had a completely incorrect understanding of how stock markets work. Often I was asked if I was a stockbroker or a trader, and if I can buy XYZ shares for them? Tell me about this particular share, bond, or economic scenario for the next year?

The essence of a stockbroking firm is that it is just like any other firm. There are clerks, administrators, bosses, secretaries, divisions of traders, sales teams, and researchers. There are executive-director meetings, ...

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