Confessions of a Wall Street Insider (ISBN 0872165019)

No new thing under the sun:
C.C. Hazard wrote under a pseudonym so he could lay out a truth that might have cost him his Wall Street career: the market exists in large measure to transfer money from small investors to large ones. The mantras of the current market are no different than the mantras of the late 60s bull; they are simply peddled via the internet rather than the phone. The IPO game, the manipulation of charts, and the churning of accounts still exist, and are still used to keep the small investor buying shares that are likely to be worth less and less as the years pass. No one, especially resource investors, should confuse a bull market with genius, and all should realize that the market consistently rewards those investors who, if they are not true insiders, act like they are. Spending an evening with Hazard is a jading experience; he finds no public morality where the vultures gather to pick clean the bones and retirement funds of the small investor. But it is an education that no investor should deprive himself of, especially with the sharks of the dotcom boom swimming unseen into the growing pool of resource stocks.

If everyone knew this, no one would ever lose money in the stock market:
It's a shame this book has disappeared from the public eye. It was enormously entertaining, with loads of colorful characters, like "Off-a-point Badly", and "Fundamental Fred". C.C. Hazard was a pseudonym for a well known stock broker of the time. He didn't really want to go totally public with his story for fear it would alienate too many people, and make trouble for many more, but he was determined to get his story down in print. His main theme was that he knew from a lifetime in the business that the game of stock investing was not really what the public thinks it is. There is also an underlying reality in the book that portrays those working in the brokerage businesses as the crooks and scoundrels that they were then, and still are now. Also, he tears apart all of the methods used at the time, including fundamental analysis, technical analysis, the charting, and a few others. As he learned over the years, the only reliable information was "insider" information. And not the corporate kind, but the exchange kind. His main point was that you simply cannot reliably discern which direction a stock will go over time unless you actually know what the insiders know. The public is not part of that knowledge and therefore must protect themselves from being fleeced. There is one chapter that was hilarious. He was asked to be a guest speaker at an investment club. For a week prior to the talk, he told all of his fellow brokers to write down the reason why anyone traded a particular stock that he wanted to use as his example (I forgot which stock it was). Then when he went to his talk, he read them all out to the attendees. Needless to say, they were baffled and a bit upset at the insanity of it all, but he made his point to the reader. In the final analysis he tells us to use whatever method we want to pick stocks (since no one method is any good anyway) and to pick stocks that have moved up 10% from a local bottom, and buy it. Then if it continues to go up, fine, but if it goes down instead (some percent) sell it. He uses the example of the "ratchet" which turns in one direction but not in the other. If you can get your hands on this book, by all means read it.