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Gene Marcial's 7 Commandments of Stock Investing

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Gene Marcial's 7 Commandments of Stock Investing

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"Few stock pickers can outperform the market but Gene Marcial has bested the indexes for the last ten years." --BusinessWeek

  • Marcial's BusinessWeek column is considered among the most influential today and is closely watched by investors and executives alike.
  • Introduces contrarian ideas that will change your way of thinking about stock investing.
  • Each chapter draws on Marcial's unique knowledge of the most successful market players and provides specific examples that illustrate the power of the strategy discussed.
  • Description

    • Copyright 2008
    • Edition: 1st
    • Premium Website
    • ISBN-10: 0-13-235461-6
    • ISBN-13: 978-0-13-235461-5
    • eBook (Watermarked)
    • ISBN-10: 0-13-714514-4
    • ISBN-13: 978-0-13-714514-0

    “Gene Marcial provides iconoclastic insights into the art of successful investing while exploding the mythology of the conventional wisdom. His 7 Commandments of Stock Investing is scintillating reading for both individual and institutional investors who seek an advantage in their moneymaking endeavors.”

    --Scott Black, President of Delphi Management Inc. and a member of the Barron’s Roundtable

    “It is well understood that trading in the stock market is full of risks. But if you are ready to take the plunge, I guarantee that there will be a time when being familiar with Gene Marcial’s 7 Commandments of Stock Investing will be extremely important. Over the years, I have followed many of the same commandments.”

    --Carl Icahn, Chairman, Icahn Associates

    “This book begins with one of the wisest investment observations I’ve ever encountered: ‘There are plenty of ways to make money in the stock market, but clinging to mainstream thinking or so-called conventional wisdom is not one of them.’ The author’s discussion on avoiding the diversification trap is alone worth many times the price of this book.”

    --Bernie Schaeffer, Chairman, Schaeffer’s Investment Research, Inc., www.SchaeffersResearch.com

    “Gene Marcial has been guiding literally millions of investors to better financial performance over his more than 30 years as a leading financial journalist. He consistently has demonstrated a rare instinct for knowing when to follow a trend and when to think like a contrarian. In today’s turbulent times, his new book, 7 Commandments of Stock Investing, is essential reading for all investors and could well add precious percentage points to the performance of any who take his words to heart.”

    --Stephen Leeb, President, Leeb Capital Management Inc.

    Every week, the investment world turns to Gene Marcial’s BusinessWeek column. Here’s why: Marcial knows how to pick winners. Apple at 15. US Steel at 19. But Marcial’s track record isn’t limited to just one or two picks. In fact, recent analysis reveals that he’s beaten the indexes for a full decade.

    You can’t get results like that following the “conventional wisdom”! You need to know what Gene Marcial has learned about stock investing--and this book will tell you. Marcial has distilled 35 years of experience into seven powerful, counterintuitive “commandments”: rules that are simple and practical enough for every investor to profit from.

    Marcial reveals why diversification is not an optimal investment strategy…why you need to focus on finding big winners, and how you can…how to profit from panic, and how to lock in your profits when everyone else is “fat and happy.” Along the way, he opens up the secret, mysterious world of corporate and market insiders--showing how to track them down, emulate their approaches, and profit from their lucrative strategies.

    • Be prepared to profit from panic
      Plot a clear strategy to seize opportunities during a macro-market panic
    • Learn how to “buy the losers”
      Finding tomorrow’s big winners in today’s bargain bin
    • Profit from the unknown
      Finding investments that are undervalued because investors don’t understand them
    • The “sweet seven”: specific stock picks for the next seven years
      What to buy right now--and hold for the long term

    Sample Content

    Online Sample Chapter

    Buy Panic: Gene Marcial on How Market Meltdowns Can Be Your Ally

    Sample Pages

    Download the sample pages

    Table of Contents

    Foreword ix

    To the Reader xv

    Introduction xvii

    Commandment 1: Buy Panic 1

    Commandment 2: Concentrate. Diversify Not 21

    Commandment 3: Buy the Losers 43

    Commandment 4: Forget Timing 85

    Commandment 5: Follow the Insider 103

    Commandment 6: Don’t Fear the Unknown 125

    Commandment 7: Always Invest for the Long Term: Seven Stocks for the Next Seven Years 157

    Epilogue 187

    Index 193

    Updates

    Errata

    PrintNumber ErrorLocation Error Correction DateAdded
    2 p 9 At $164 a share, the Goldman Sachs stock was a pure bargain, selling at just 6.8 times projected 2008 earnings of $23.90 a share, compared with a price-earnings ratio of 10 in June. A month later, on September 18, the market mounted an unexpected giant rally, driven by the Fed’s federal-funds rate cut. Goldman Sachs stock was among the market’s giant winners. The stock closed that day at $205.50. Just about a week later, the stock continued to fly, to $210—and rising. That was a 46-point jump in just over a month, had you practiced panic buying. On October 31, 2007, Goldman Sachs’ stock hit a 52-week high of $250.70.
    At $164 a share, the Goldman Sachs stock was a pure bargain, selling at just 7 times projected 2008 earnings of $23.90 a share, compared with a price-earnings ratio of 10 in June. A month later, on September 18, the market mounted an unexpected giant rally, driven by the Fed’s federal-funds rate cut. Goldman Sachs stock was among the market’s giant winners. The stock closed that day at $205.50. Just about a week later, the stock continued to fly, to $210—and rising. That was a 46-point jump in just over a month, had you practiced panic buying. On October 31, 2007, Goldman Sachs’ stock hit a 52-week high of $250.70.
    5/7/2008
    2 p 11 Maloney bought shares of AIG on March 23, 2005, at $56.32 a share—weeks after New York State Attorney General Eliot Spitzer (now New York’s Governor) and the Securities and Exchange Commission started investigations into the use of its nontraditional insurance products and certain assumed reinsurance transactions. AIG admitted to committing several accounting mistakes. Most of the problems at AIG stemmed from weak internal controls in accounting for derivatives and related assets.
    Maloney bought shares of AIG on March 23, 2005, at $56.32 a share—weeks after New York State Attorney General Eliot Spitzer and the Securities and Exchange Commission started investigations into the use of its nontraditional insurance products and certain assumed reinsurance transactions. AIG admitted to committing several accounting mistakes. Most of the problems at AIG stemmed from weak internal controls in accounting for derivatives and related assets.
    5/7/2008
    2 p 63 - 64 At that time, Icahn had come to terms for a rapprochement with Parsons, who had agreed to do a $20 billion buyback. One of Icahn’s big campaigns was to push management to split up Time Warner by selling its cable operations. Parsons rejected splitting up the company, although it filed registration papers to take public part of its cable business, primarily its assets in Adelphia, which it acquired jointly with Comcast in July 2006. Time Warner ended up with 84 percent of Adelphia.
    At that time, Icahn had come to terms for a rapprochement with then CEO Richard Parsons, who had agreed to do a $20 billion
    buyback. One of Icahn’s big campaigns was to push management to split up Time Warner by selling its cable operations. Parsons rejected splitting up the company, although it filed registration papers to take public part of its cable business, primarily its assets in Adelphia, which it acquired jointly with Comcast in July 2006. Time Warner ended up with 84 percent of Adelphia.
    5/7/2008
    2 p 82 Some analysts agreed with Lappin, who believes Motorola can’t move forward with Zander in control. Motorola is not beyond repair, she argues, but it soon will be—if Zander isn’t bounced from the CEO position. Will Zander get booted out, as a growing number of people are suggesting? So far, he seems secure, with the board squarely behind him. When he was appointed in January 2004,
    Zander became the first outsider to land the CEO seat in Motorola’s 79-year history. With Zander still in the hot seat and Motorola’s stock groping for a bottom, it seems the appropriate time for investors to buy Motorola’s stock at its low price level. Icahn is apparently on the right track, partly because of the $15 billion cash and cash equivalents that the company nourishes in its treasury.
    Icahn has urged the board to spend $11.2 billion to buy back its own shares, rather than the $8.5 billion the company intended to spend for repurchasing stock. Motorola has already repurchased $4.7 worth of stock since 2005.
    Some analysts agreed with Lappin, who believes Motorola can’t move forward with Zander in control. Motorola is not beyond repair, she argues, but it soon will be—if Zander isn’t bounced from the CEO position. When he was appointed in January 2004,
    Zander became the first outsider to land the CEO seat in Motorola’s 79-year history. With Zander still in the hot seat and Motorola’s stock groping for a bottom, it seemed the appropriate time for investors to buy Motorola’s stock at its low price level. Icahn was on the right track, partly because of the $15 billion cash and cash equivalents that the company nourished in its treasury.
    Icahn urged the board to spend $11.2 billion to buy back its own shares, rather than the $8.5 billion the company intended to spend for repurchasing stock. Motorola already repurchased $4.7 worth of stock since 2005.
    5/7/2008
    2 p 100 Given its beleaguered stock and its depressed valuation, Citigroup appears a real bargain for what it represents in assets, global presence, and increasing foothold in foreign markets. As to the problem of who will succeed Prince, it is a momentary problem that could produce very positive results. Some institutional money managers had bought shares partly in anticipation that Prince would be ousted and replaced by a more vibrant new CEO. They figure that his successor can only improve the worsening situation at the company.
    Given its beleaguered stock and its depressed valuation, Citigroup appears a real bargain for what it represents in assets, global presence, and increasing foothold in foreign markets. Some institutional money managers had bought shares partly in anticipation that Prince would be ousted and replaced by a more vibrant new CEO. They figure that his successor can only improve the worsening situation at the company.
    5/7/2008
    2 p 108 Fidelity after he took the helm of its Magellan Funds in 1977, Lynch holds an unbeatable record. Magellan had assets of $22 million when he took it over. By 1990, it had grown to $12 billion. As Lynch’s reputation as an ace investor spread, so did Fidelity’s public image. Thirteen years after he took over Magellan, Lynch quit as its manager, to devote more time to his family. Fidelity’s “whiz kid” now manages money on his own, but he remains an active consultant to Fidelity.
    Fidelity after he took the helm of its Magellan Funds in 1977, Lynch holds an unbeatable record. Magellan had assets of $22 million when he took it over. By 1990, it had grown to $12 billion. As Lynch’s reputation as an ace investor spread, so did Fidelity’s public image. Thirteen years after he took over Magellan, Lynch quit as its manager, to devote more time to his family. Fidelity’s whiz kid now holds the title of Vice Chairman of Fidelity Management and Resorces.
    5/7/2008
    2 p 115 On November 7, 2007, oil prices rocketed to $98.62 a barrel, a record high o

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