Review
Larry Williams’s The Right Stock at the Right Time: Prospering in the Coming Goods Years is a marriage of investment advice with attempts at formalizing what is, essentially, market speculation. The first three chapters trace cyclical behavior over the history of the U.S. stock market, behavior that Williams summarizes as the “10-year pattern,” the “sure thing seven years,” “the four-year phenomenon,” the “straight eight factor,” and “the October effect.” Pulling these a…
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Larry Williams is a prolific author, trader, educator, and money manager. With over a quarter century of experience, Williams has provided investors with practical and easy-to-implement market timing and stock selection strategies in this just published book.
Williams initially focuses on the recurrent seasonal patterns in the market. Williams reveals one interesting strategy where he notes that excellent times to go long the market are years ending in twos (e.g., 1952, 1962 …… 1992) and threes. Just look at charts in those years or view them in this book to see those excellent buying points.
Williams also covers the best years of each decade to invest – fifth, eighth and ninth years. The consistency of these three years performance is 80%(positive returns in 8 out of 10 of those decade years). Next he covers the four-year cycle from 1858 to the present time (last 4-yr cycle years were 1994, 1998, 2002) showing that they were good times to buy at their yearly lows, many times occurring in the September/October timeframe.
Another strategy Williams covers in buying in October and selling in April. This strategy was offered by Stock Trader’s Almanac in 1986 developed by Yale Hirsch, and it still works today. This strategy has produced significant returns while reducing risk as investors are out of the market for half the year.
Williams provides a look at indicators to determine that a market bottom is in place. He covers such items as the Fed’s Stock Evaluation Model, margin credit, odd-lot short sales, Investors Intelligence Bull/Bear Index, US Bonds, and gold prices.
Williams covers in detail the fallacy of long-term investing and the devastation that it can wreak on investors portfolios. Investors who are die-hard “buy-and-holders” should read this chapter to learn that to use that strategy is dangerous.
To do well in the market, Williams urges investors to find stocks that have the capability to outperform the market, and then find the best time to buy them. He totally disagrees with the Wall Street cognoscenti that market-timing is useless.
He spends a chapter on buying stocks at a discount, and one on measuring investor sentiment on individual stocks. He lists seven traditional measures of value (e.g., P/E ratio, Price/Book) and elucidates on which ones work best.
All-in-all this well-written, easy to understand book provides investors with a systematic, time-tested approach to investing. Williams has again provided investors with another classic.
This book is an outstanding value for any investor or stock trader! I could not put it down once I started reading it. Quite simply this book could make you immensely wealthy if you studied and applied the mountains of street smarts, common sense research and wisdom contained in its pages. It breaks new ground by its unique approach to combining broad-based, macroeconomic price patterns and some traditional fundamental statistics for timing the stock market. Investors and stock traders are starting to become more keenly aware that the concept of timing indicators from the discipline of Technical Analysis coupled with key statistics from Fundamental Analysis can provide the basis for rational stock investing……..in Bull or Bear markets. This may be the first book to accomplish this critically important objective for the individual investor that wants to control his or her own financial destiny.
This book contains sound advice and stock investment timing techniques from one of the most successful, highly respected and well-known investors, stock/stock index traders and educators in the business. Larry’s techniques for stock selection and market timing are based on sound historical analyses and practical methods for buying and selling. I believe this material proves, once and for all, the fallacy of the “buy and hold” approach and willy-nilly diversification schemes pushed onto an unsuspecting public by the ill-informed, and sometimes unscrupulous, community of brokers and investment advisors. This book blows their cover! Markets can be timed using patterns and fundamental indicators………………..and the individual investor can do it for themselves.
Larry Williams proves that market timing can significantly improve your investment results. As an example, using just one of the techniques in this book, I did an independent, blind, unbiased five year simulation of a strategy adapted from the High Yield Investment Strategy (p. 185) using the five lowest-priced, highest-yield stocks in the Dow Industrials and Dow Utilities (this is not the Dogs of the Dow strategy). This strategy returned $6,560 for each $1000 invested from October 1998 to June 2003 (an average 46%+ return per annum). While that kind of return may not be possible in all time periods, it certainly provides a high degree of credibility for the results that this book claims can be achieved. Contrast this with the severe losses many people have suffered in the last three years using other investing approaches. Remember 1998/1999 were two highly volatile, bubble years and 2000 to the present is a secular Bear. The strategy worked extremely well in both types of markets. What impressed me most was that gains were pretty evenly spread throughout the five year period (only the year 2002 had a loss and that was only -7.4%). Actually, the gains from the three Bear market years were nearly the same as those from the two Bull years. This is a great testament to how robust Larry’s techniques are. The bottom line is this is how I will invest my money and retirement funds, and I would strongly suggest it would be the right thing for many other individual investors to do, as well.
If you are looking for a sound and safe way to invest, grow and protect your money in the stock market, this book is for you!