The Naked Trader book - any good?

Cactus_Jack

Has anyone here read this book and would it be a good first book for learning how to invest? The Amazon reviews are very good.

I notice on his website he promotes his affiliate links a lot and this has put me off buying it slightly.

Would appreciate any feedback

Thanks

pumpndump

It is crammed full of useful information, and is relatively up-to-date. His investment methods are not appropriate for a bear market, and he seems to lend a lot of weight to spread betting, which is not investing but gambling. The book is also easy to read. Overall, I think this is a good book.

Blah99

The second revision came out Feb 2008, so it's bang up to date. It's an excellent book if you're just starting out with stock markets - it'll help you understand all the fundamentals (chuckle) of investing. I thoroughly recommend it.

I agree with pumpndump that the investment methods are not directly appropriate for a bear market. That said there are always good opportunities in a bear market, and the book clearly explains how to identify them from a fundamentals point of view.

I disagree with pumpndump about the spread betting comment. I would actually completely ignore the spread betting chapters in the book. Focus on going long ("normal" trading) first, then when you're ready to move forward with shorting and spread betting you should by "The Financial Spread Betting Handbook" by Malcolm Pryor. There is nowhere near enough info in the Naked Trader book to get you properly started on spread betting, and it's way too risky. I actually asked Robbie Burns about this once, he said that he needed to include spread betting info because people (and the publisher) were asking for it, but because the book is aimed at beginners he had to be careful about what he said and how much information he gave.

Also spread betting, when done properly, is NOT gambling. The problem is that too many people don't understand how to do it and then lose vast sums of money.

Don't be put off by his promotions on his website. You can safely ignore absolutely everything he puts on there ("ADVFN BRONZE NOW!!!" is a classic, and is absolutely worthless). He gets a vast amount of visitors to his site so it's worth his while trying to pump some affiliate signups. His book doesn't pump any commission-based signups, but it does refer to his favourite tools a lot such as ADVFN. That's not a bad thing at all because it directly shows you how to use the websites properly.

Finally it's worth knowing that he usually responds to pretty much every sensible email he gets about his book. So if you're lost or confused about something and want to ask him directly, just email him!

Summary - I thoroughly recommend this book for stock market beginners.

millsee

Personally, I couldn't stand the book. It's gimmicky, condescending and particularly crude. However, as with everything, the real answer is "it depends".

The reason it depends is that you need firstly to understand whether you lean towards "fundamental analysis" or "technical analysis".

Fundamental Analysis (FA) says that you look at the underlying business - it's growth potential, the dividends paid, the asset value, etc. TA says that you look at patterns on charts to see whether you should buy or sell and at what time in a particular day you should do that. The Naked Trader is all about TA.

Most stock traders deal with TA. If you want to beat the market, then you should do something other than TA. If you want to match the market, then you should just buy into a low-cost low-stress tracker.

I would recommend either The Motley Fool Guide to Investing, or Intelligent Investor, by Ben Graham.

cbobting

Blah99 wrote: »

Summary - I thoroughly recommend this book for stock market beginners.

me too; no nonsense, clear practable advice on trading. he does plug his affiliate links/ discounts etc throughout the book, but generally they dont get in the way of the good stuff. i too would pretty much ignore whats on his website.

millsee wrote: »

Fundamental Analysis (FA) says that you look at the underlying business - it's growth potential, the dividends paid, the asset value, etc. TA says that you look at patterns on charts to see whether you should buy or sell and at what time in a particular day you should do that. The Naked Trader is all about TA.

i think you have got that the wrong way round millsee. he quite cleary and often states that he thinks charting is a load of nonsense. his advice is to concentrate on the fundamentals ie market cap, profit and debt. the only time he actually favours charts is to analyse resistance and support.

Cactus_Jack

Thanks for the replies. I'm going to go for it, based on the good stuff on here and Amazon.