Lessons From the Trader Wizard

Bill describes himself “not as an anti-capitalist, but as a free market flag-waver... I am also just a computer that works non-stop for the People, cranking out objective analysis and independent opinions on global financial markets.”

In this his first book, Bill discusses through his personal experience how the markets work, how he picks stocks and how to develop confidence and self-reliance to become your own trader.

Advance Praise for, Lessons From the Trader Wizard:

“Through the power of his written words, Bill Cara turns mere mortals into trading superstars. Bill Cara is that rare breed of individual: an insider who thinks like an outsider; an investor who acts like a trader; and, a practitioner who can teach others just what it takes to make money in the markets.”
Michael Panzner, author of Financial Armageddon and The New Laws of the Stock Market Jungle.

“If you don’t believe that the Internet has changed everything, and is now empowering individuals to beat big corporations, then you have not met Bill Cara or visited his blog! Bill’s quotidian thoughts and trader wisdom now reach more people every day than many of the top Wall Street analysts. Bill is a leader in a new entrepreneurial class empowered by the democratizing power of technology.”
W William Woods, co-author of B2B Exchanges and author of B2B Exchanges 2.0.

“Discovering Bill Cara is more important to investors than finding a great stock investment. In Bill, individual investors have found an independent, principled, intelligent and experienced teacher and advocate. If you want to learn about markets and trading, buy his book!”
Ermanno Pascutto — former senior securities market regulator in Canada (Executive Director, Ontario Securities Commission), and Hong Kong (Deputy Chairman, Securities and Futures Commission) and currently advisor to regulators, self-regulatory organizations and financial institutions in North America, Asia and the Middle East.

“Practical, provocative, inspiration, educational and meaningful information on wealth management which provides individuals with the knowledge to handle their investment decisions.”
Bob Coffey — BCom, CA CMC — Retired vice chair and head coach of KPMG Chartered Accountants (Canada)

“A unique, very practical guide through the financial jungle: Bill Cara explains how individual investors can be successful in, often times, obscured markets and, at the same time, get a better understanding of the behavior of the big players.”
Walter Niederberger, US Economic Correspondent, Tages-Anzeiger, Zurich.

Table of Contents:

Part 1 – What is the Market? What is Trading?

1. Getting your head around capital markets and your place in it

* What is the market?
* Stop listening and talking; start reading and thinking, then doing

2. Deciding to self-trade securities, get help, or do a little in between

* Do you really want to be a professional trader?

3. Choosing your advisor carefully

* Choosing advice and administration from the sell-side
* Licensed buy-side portfolio manager
* Choosing a fee-based financial planner
* Adopting a published portfolio: A case of the blind leading the blind
* Market advisory letters: A few things to know

4. The purchase of investment products called mutual funds

* The case for mutual funds
* The case against mutual funds
* Open-end load funds
* Open-end no-load funds

5. So, Mr. Trader, you decided to take control of your own affairs

* Building a trading plan
* Three basic aspects of markets you will have to learn
* Five mistakes even professional traders make
* A strategy for the conservative trader; how to deal with inflation
* A strategy for the enterprising trader; zero in on corporate management
* A strategy for the speculative trader; seeking hidden opportunity

Part 2 – Cara’s Approach to Trading Bonds, Bond Funds and Cash

1. What is a bond?

* How interest is calculated and paid
* How bonds are rated
* Differences in bonds
* How to read bond quotations and figure yields
* About prices and yields of bonds
* What you should consider before trading bonds
* The relative safety of fixed income securities
* Guidelines for trading the bond market
* The yield curve

2. Choosing between bonds and bond funds

* Open-end bond funds
* Closed-end bond funds
* Retractable bond funds
* High-yield bond funds
* Bond ETFs

3.Money market funds: Cash is an asset class too

* Putting money to work to preserve capital and beat inflation

Part 3 – Trading Stocks (Also Called Equities)

1. Macro-economics: where public and private sectors meet

* Trying to understand economics, the Fed and the market
* Economic analysis protocols I’ve used for over 20 years and still recommend

2. Fundamental (Corporate) Data

* How to read and analyze corporate financial data
* How to read a corporate balance sheet
* How to read the statement of income
* Quick review of corporate results
* A proposed set of financial statements

3. Combining Corporate and Market Data for Quantitative Analysis

* The quant “gurus”
* The automated decision system “gurus”

4. Technical (Market Data Analysis)

* Technical analysis studies
* When dealing in price series data, the subject is timing
* Understanding my approach to technical analysis

5. How equity markets are sliced and diced

6. Countries

* Trading considerations of foreign stocks
* Trading considerations for Dow 30 stock watchers
* Canadian stocks
* Latin American stocks
* British and European stocks
* Asia-Pacific stocks

7. Knowing the playing field

* A rising tide floats all boats (and vice versa)
* A study of market interrelationships
* Fastest moving industries and groups
* Buying big-cap stocks and ETFs
* Buying small-cap and mid-cap stocks and ETFs

8. Selecting equity mutual funds

* The importance of what to buy

9. About growth

* Search for “growth-oriented” common stocks
* Differentiating the valuation of growth from price
* How stupid can one get?
* How to relate future earnings and current market prices
* A growth stock price evaluator
* Finding growth stocks objectively
* Seeking growth from well-established companies
* Finding growth potential in unseasoned companies

10. About Value

11. Growth + Approximate Fair Value = Quality [the Cara 100 concept]

12. The Importance of What to Buy

13. About Timing: The Cara Market Phases Model and Oscillator

14. Preferred, Rights and Warrants

15. Special Situations

16. The “How To” guidelines on the Mechanics of Buying and Selling

Part Four - Specialties to Trade

1. About Trading Options

2. Trading the Commodities, Futures and Currencies Contract Markets