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Warp speed universe. Warp speed financial markets. The 8th Edition of this
classic book appeared when it seemed that the millennium and paradise had
been achieved and that, like McKay’s tulipomania, the price of stocks would
rise forever and men would rush from the world over and pay whatever
price was asked for what-was-its-name.com, Internet.groceries, or ihype.com
or icon.com or gotcha.com. And, feature this,
Dow 36000.
The bubble was
just in the process of bursting, of course. Before it burst fabulous fortunes
were made by roller blader and scooter tycoons and by young geeks with
nothing but chutzpah and a laptop. One of my favorite stories is of the young
entrepreneur who said “Why don’t I deserve it (the $100MM he made in the
IPO)? I’ve devoted three years of my life to this project.” (Now dead.)
Now many of those people are in prison and the hangover lingers on.
Lying, cheating, and stealing on all sides. From Enron to Arthur Anderson.
Billions, if not trillions into a black hole. As all this developed I warned of
the impending collapse in the John Magee Investment Letters on the web.
There was nothing magic or brilliant about seeing what was going on.
Perspective and perception came from applying the lessons taught in this
book by Edwards and Magee. Like Benedict XVI (in a different area) I am a
humble worker in their vineyard.
I press on attempting to modernize (where necessary) and extend their
work, fit it to the modern situation and make it even more useful to current
day traders and investors.
In this ongoing labor of love I have been immeasurably assisted by my
graduate students and colleagues at Golden Gate University in San Francisco.
In constant interaction with them, I have been stimulated to see important
aspects of Edwards and Magee’s work and develop and emphasize these
elements in my teaching and in this new edition.
Specifically, both long-term and short-term traders will find important
new material in this edition. In my graduate seminars I have seen the power
of what Magee called the “Basing Points” procedure and so have extended
the treatment of this material. My interest in and respect for Dow Theory
have recently increased as the result of a paper done with Brian Brooker for
the Market Technicians Association (“Dissecting Dow Theory”). Material
from that paper will be found in this edition. Short-term traders and futures
speculators will appreciate extensive new material on commodity trading.
These traders have been entirely too influenced by mechanical numberdriven
systems of recent years and need to restore perspective by mastering
the material in this book. |
