The Wallstrip Edge by Howard Lindzon

6*

• Hardcover: 224 pages
• Publisher: Business Plus (February 18, 2009)
• Language: English
• ISBN-10: 0446508640
• ISBN-13: 978-0446508643
• Product Dimensions: 9.2 x 6 x 1.1 inches 

Lindzon is a great advocate of momentum investing/trading as seen by this book. It gives a different perspective/method of investing as compared to Fundamental Analysis or Technical Analysis as it leans more towards behavioral science.

My personal opinion is that this technique might not apply well in other markets.

Here’s the summary of the content delivered and the content reorganized for reference. Under each point, I have emphasized his key message. 

1. Trends
1. Charts have little value as they add noise only
2. Valuation matters only at extremes of the market. Valuation is difficult as well and hard to time.
3. Trending stocks are hard to value
4. Filter out noise
1. Daily volatility is normal due to the massive amount of information or data exchanged everyday. Most of it is noise and does not impact prices in the long run
2. Keep an eye out for trends instead
3. Either trade or invest, not both. Doing both causes you to lose focus.
4. You don’t have to trade too often. Doing so frequently shows that you are influenced by noise which is unpredictable.
5. Everlasting Trends
1. Information – companies that help to shrink the world like Fedex, Google
2. Vices – gambiling, smoking
3. War and Defense
4. Health Wellness and Vanity
6. Hot trends
1. IT especially Human Computer Interface for connectivity
2. Medicine and its alternative (Spirituality and Wellness)
3. Oil and alternative energies
4. Consumer electronics focusing on fashion

2. Tips to find trends
1. Select from all-time-highs as this is where the money is flowing
2. Select an all-time-high stock which has traded for sideways for a long time. Longer the better.
3. Look at stocks that have real visible presence and earnings.
4. Be wary of stocks which has already risen more than a few times from its first all-time-high
5. Research sufficiently
1. Don’t overdo it
2. Focus only on all-time-highs
3. Look at bloggers

3. Other Tips
1. Manage your Money well
1. Sell the losers and ride the winners
2. Never average down
3. Buy when the market is healthy (more all time highs to choose from)
4. Determine your risk tolerance
5. Have a strategy
6. Aim to survive for another day
7. Sell on the way up as trends do end
8. Practice effective exits and stop loss
9. Never ever leverage
2. Bear Markets
1. Look out for great brands/leaders on sale
2. Avoid the following industries
1. Airlines
2. Electronics
3. Components
3. Avoid stock tips
4. Use/leverage social networking