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A detailed look at the entire array of trading strategies and techniques used by Warren Buffett. Trade Like Warren Buffett challenges the current coverage of this great investor by including details of all of Buffetts investing and trading methods, including demographics, mean reversion, arbitrage, market timing, as well as Graham and Dodd. In addition to the value investing approach, this book discusses other, lesser-known trading strategies and techniques that have helped to make Buffett the greatest investor in history. To augment the discussion of each strategy, Trade Like Warren Buffett includes interviews with leading professionals who reveal in detail how they successfully use the same techniques as Buffett.

The Warren Buffett Portfolio: Mastering the Power of the Focus Investment Strategy

It's no secret that most mutual funds fail to beat the performance of the S&P 500. And if the pros can't beat the averages, it's not unreasonable to assume that most individual investors can't, either. Why? According to Robert Hagstrom, author of The Warren Buffett Portfolio, a big reason is the industry's emphasis on diversification. In the interest of minimizing risk, many investors have "become intellectually numb to its inevitable consequence: mediocre results." As a result, they wind up owning too many stocks and churn their portfolios unnecessarily (for example, the average mutual fund holds 100 stocks and turns over 80 percent of its portfolio annually). In The Warren Buffett Portfolio, Hagstrom shows how Buffett and others use the idea of focus investing to organize winning portfolios. Unlike Hagstrom's first book, The Warren Buffett Way, which describes how the world's greatest investor selects individual companies, this book looks at the mathematics, the psychology, and the mental models necessary to build a successful portfolio. The basic ideas: Pick no more than 10 to 15 companies with good track records and high probabilities of future success; plan to hang onto them for at least five years; and ignore predictions and the sometimes terrifying swings in market behavior. It's hard to argue with Hagstrom's approach, especially when he practices what he preaches. His fund, the Legg Mason Focus Trust, has 15 stocks, an annual turnover rate of 9 percent, and percentage annual returns in the mid-30s. For thoughtful investors and devotees of Warren Buffett, who are looking for more than the next hot stock tip, The Warren Buffett Portfolio is well-written guide. Recommended. In a straightforward follow-up to his bestseller, The Warren Buffett Way, Hagstrom shows how to put Buffett's ideas into practice. Buffett, universally described as one of the world's greatest investors, has made a fortune with a number of extremely large bets on a relatively small number of companies. By doing so, Hagstrom, who runs a mutual fund for the Legg Mason investment house, correctly points out that Buffett flies in the face of orthodox notions of portfolio diversity. Buffett's approach, which Hagstrom calls "focus investing," limits his investments to an extremely small number of stocksA10 or 15Athat he thinks have the greatest long-term potential. In The Warren Buffett Way, Hagstrom identified how Buffett chooses those stocks. And here, in his straightforward followup, he shows the benefits of this approach: if you pick right, returns will be far greater than the market as a whole. The problem, of course, is that you have to pick winners. That, as Hagstrom notes, still takes hard work and discipline.

Warren Buffett Way, 2nd Edition, 2004-10 by Robert G. Hagstrom

Buffett is back . . . and better than before! A decade has passed since the book that introduced the world to Warren Buffett -- The Warren Buffett Way by Robert Hagstrom -- first appeared. That groundbreaking book spent 21 weeks on the New York Times Hardcover Nonfiction Bestseller list and sold over 1 million copies. Since then, Warren Buffett has solidified his reputation as the greatest investor of all time -- becoming even richer and more successful, despite the wild fluctuation of the markets. How does this value investing legend continue to do it? That's where Robert Hagstrom and the Second Edition of The Warren Buffet Way come in. This edition is a completely revised and updated look at the Oracle of Omaha -- comprising Buffett's numerous investments and accomplishments over the past ten years, as well as the timeless and highly successful investment strategies and techniques he has always used to come out a market winner. This edition is especially accessible as Buffett's basic tenets of investing are presented and illuminated with relevant and up to date examples. Order your copy today!

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Bollinger Bands come to us courtesy of John Bollinger. They are displayed as an upper and lower band plotted above and below the equity's price pattern, and are calculated at standard deviation levels. Are you scratching your head? Standard deviation equals a measure of volatility. High standard deviation levels occur when prices change dramatically (think: roller coaster). Low standard deviation values translate into quiet price movement (think: consolidation). The operative theory behind Bollinger Bands is that the price pattern tends to fluctuate within the upper and lower band. Further; when the price rises (or falls) to touch the boundary ofone band, it will then reverse andfall (or rise) to the opposite band.
What you need to know when using Bollinger Bands:
When the price moves to touch one band, it usually reverses and heads all the way to the other band (good for projecting price targets).
When the bands tighten because volatility lessens, look for a sharp price change to occur. Hey, same action as a breakout from a consolidation pattern-right? Right!
When the price pokes through and moves outside the band, that implies strength in that direction-or a trend continuation.

Traders sometimes refer to the Stochastic (pronounced sto kas tik) Oscillator, as "Stochastics," because it employs two lines to give a single signal. An overbought/oversold indicator developed by Dr.. George Lane, the Stochastic Oscillator compares where a stock's price closed at to its price range over a specific period of time. The driving principle: as a price rises in an uptrend, the closing price moves to the upper end of the recent price range. In a downtrend, closing prices usually sink to the b,ottom of the range. We won't study the actual calculation here. And believe me, if you ever see it, you'll be glad we didn't! Again, the Stochastic Oscillator is displayed in two lines. The major line is called the "%K." The second line is referred to as the "%D," and is a 3-day moving average of the %K. Many times you'll see the % K as a solid line and the % D as a dotted line. Stochastics come in two flavors-fast Stochastics,and slow Stochastics. The one described in the previous paragraph is fast Stochastics. In slow Stochastics, the slow %K equals the fast %D, with the slow %D equaling
a 3-day average of the fast %D.
Got that? If not, cheer up. Your charting software understands the equations needed to calculate the display. For the record, I prefer the fast Stochastics, although slow Stochastics has a smoother look. In tandem, the %K and %D lines rise and fall between zero and 100. Readings above 80 are considered overbought, and readings below 20 are oversold. The Stochastics buy/sell signal is as follows:
Buy-when the lines are below 20, and the faster %K line crosses above the slower %D line. (Watch out for short-term crossovers. Use indicators to confrrm the reversal.)
Sell-when the lines are above 80, and the %K crosses the %D to the downside.
Look for divergences, just as you do with the RSI. An example: Bossy Bank makes a new high. At the same time, the Stochastics moves sideways or hooks to the downside. That's called a "bearish divergence." Assume the price will soon follow the Stochastics south. Or, while Bossy Bank experiences a normal consolidation period in an uptrend, the Stochastic suddenly hooks up. Referred to as a "bullish divergence," it tells you to prepare for a continuation of Bossy Bank's uptrend within the next few time periods.

A simple moving average is the simplest type of moving average (DUH!). Basically, a simple moving average is calculated by adding up the last “X” period’s closing prices and then dividing that number by X. If you plotted a 5 period simple moving average on a 1 hour chart, you would add up the closing prices for the last 5 hours, and then divide that number by 5. If you were to plot a 5 period simple moving average on a 10 minute chart, you would add up the closing prices of the last 50 minutes and then divide that number by 5. If you were to plot a 5 period simple moving average on a 30 minute chart, you would add up the closing prices of the last 150 minutes and then divide that number by 5. If you were to plot the 5 period simple moving average on the a 4 hr. Most charting packages will do all the calculations for you. The reason we just bored you with how to calculate a simple moving average is because it is important that you understand how the moving averages are calculated. If you understand how each moving average is calculated, you can make your own decision as to which type is better for you.Just like any indicator out there, moving averages operate with a delay. Because you are taking the averages of the price, you are really only seeing a “forecast” of the future price and not a concrete view of the future.

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Book Description Profiting with Forex introduces investors to all the advantages of the global foreign exchange market and shows them how to capitalize on it. Readers will learn why forex is the perfect supplement to stock and bond investing; why it is unrivaled in terms of protection, profit potential, and ease of use; and how it can generate profits, whether the other markets are up of down. Written by two leading forex experts, this complete investing resource uses basic economic principles, solid technical analysis, and lots of common sense to develop an arsenal of tools and techniques that will lead to winning results in the lucrative foreign exchange marketplace. Profiting with Forex includes everything that investors need to know about: # The many advantages of the forex market: huge market size, ease of entry, profit potential, tax incentives, 24-hour trading, no commissions, increased leverage, and guaranteed stops # The basic terms of forex trading: definitions of important concepts, including "pip," "currency pair," "contract" or "lot," and more # Genesis and growth of the forex market: how the forex market emerged out of a changing global financial landscape and continues to changes and adapt with that same volatile landscape # Fundamental factors that shape the Forex market: the U.S. government, inflation, the U.S. stock market, China and other emerging markets, oil, and breaking news # Fundamental tools for tracking Forex market changes: interest rates, Treasury International Capital Data, Consumer Price Index, S&P 500, U.S. dollar vs. Chinese yuan, balance of trade, crude oil futures, and news media # Technical analysis tools and indicators for gauging market sentiment: moving averages, oscillating indicators such as, stochastics, Commodity Channel Index, Relative Strength Index, Fibonacci analysis, and others Filled with over 150 illustrations and figures, Profiting with Forex also shows investors how to combine their newly acquired knowledge of Forex fundamentals with proven trading techniques that can generate great rewards in the market.

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