Deconstructing Purpose

Wade B. Cook

Wall Street Money Machine: New and Incredible Strategies for Cash Flow and Wealth Enhancement
, is based on an idea the author Wade B. Cook adapted from his days of driving a Taxicab. He found he could make more money, by making lots of short runs, rather than a few longer runs, because of the baseline fee charged for hailing a cab.

Adapting this to the stock market means lots of short term trades, designed to produce cashflow, or money back into your account. The “strategies” discussed in this book are described as flawless, low risk, and guaranteed to make you a millionaire by lunch. So take his information with a grain of salt, however, the techniques are actually viable solutions for investing, and many people do make a habbit of doing so, minus the un-believable returns.

Quotes

“Boy run where they ain’t”
This is referring to something his football coach had yelled at him after getting crushed time and time again by the defense. However discussed in terms of investing, I think it quite simply describes an important rule. “Don’t follow the hype, look for openings in the market, that are under valued, and under hyped. If you run with the crowd you will get creamed.

“The First Rule of Winning: Don’t Lose.”
I think this is pretty clear and concise. However its till worth explaining, in terms of investing. Don’t get greedy, you don’t need to make a million dollars instantly. As long as you are not losing you are doing great. If you can consistently not lose, and slowly build your winnings, you are on your way to great-ness. However, if you are consistently losing, you are effectively moving your starting line back before the race has even started.

“Bet on the Jockey not the Horse.”
This is a great way of saying, Buy the company not the product. Or A great product does not make a great company. A great management team, makes a great company, don’t get them confused, and you’ll go far.

“Buy Wholesale Sell Retail.”
This is another great way of viewing the goal of traditional investing. Everyone has heard, “Buy low, sell High.” That is great and all, but this quote creates a nice visual that can easily be recognized as a tried and true business model. That can be adapted and used in your business of investing.

“Would I buy this stock right now? If not then its time to sell.”
This is a great question to ask yourself when evaluating your portfolio. Granted it is not all that scientific, however a well trained investor who has done his due diligence can quickly review a stock they are familiar with and have been following, to come up with a reasonably educated answer to this question. Do not however confuse this question with good old fashioned research.

Tagged: Stock Market, Stocks