Bill Cara: "WALL STREET, How It Works, and for Whom", Tues., Feb. 21, 2006, 4:33 PM

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February 21, 2006

"WALL STREET, How It Works, and for Whom", Tues., Feb. 21, 2006, 4:33 PM

A reader who is involved professionally in trader education sent me a rather large (1.14 MB) file that contains a copy of Doug Henwood's 1997 book entitled, "WALL STREET, How It Works, and for Whom".

In the words of the individual who sent it to me: "Henwood's reason for writing the book is described in his own words on page 83. "...This survey excludes the lowlifes who take in $200-300 billion a year by preying on the poor and desperate.... the point of this book is to tar the folks with the good reputations, if only to pre-empt the "bad apple'" defense...." In so doing, he provides a comprehensive snapshot of the financial services sector up to 1997. At almost 400 pages, I haven't completed it yet, but it is an impressive effort and might be good background reading for segments of your audience."

If you have the patience, you will find a particular perspective throughout that might sound familiar. :-)

This book apparently took six years to write, and, after the publishing rights were returned to the author, Doug Henwood now makes it freely available under a Creative Commons license.

Download WALL STREET, How It Works, and for Whom

On page 144, Henwood engages us in a delightful discussion about Tobin's q, which by the way is calculated by ADVFN for many companies. When you click on the ADVFN.com site and then on the tab for Financials, and enter a ticker symbol (U.S. listing), you will find the Tobin's Q calculation in the Valuation Ratio's section.

Posted by Posted by Bill Cara on February 21, 2006 04:33:49 PM | Category: Learning Center

Discourse

Speaking of Tobin's Q, at Jesse's site (http://www.geocities.com/arthurcutten/jesse.html), here is a chart showing the high correlation between the Dow and Tobin's Q Log.

http://jessel.100megsfree3.com/dowgold.png

Posted by: g034 at February 21, 2006 5:09 PM [link]

I mentioned the Harold Simmons Indicator last week. So far so good. Metals are moving out and the stock split on Friday and broke to new highs today.

Wish I could find more natural resource plays where insiders were believers. The best you can say is they tend to sell less than others.

GLD- posted article earlier- continue to see the growth of the bullion etf as very bullish for the miners (importantly unique to the current cycle).

long metals

Posted by: stockman at February 21, 2006 6:58 PM [link]

Hehe, interesting book, flipping through it now, I'll probably decide to finish it. The Marx quote on the first few pages probably shows his standings to a certain extent ;). Brings to mind a Lenin quote:"Capitalizm will destroy itself by debasing its currency"
Sometimes I do think, am I creating value when I trade stocks? The answer IS a blunt no... I tell myself I'll create value later on after I make a few billions, but that's just self-suasion perhaps. I'll probably be addicted forever to the markets.

Posted by: FirstConsul at February 22, 2006 5:17 AM [link]

Many thanks for bringing this information to my (our) attention Bill. It makes me shudder when I think of all my hardworking friends and relatives and the shift from defined benefit plans to defined contribution plans.
IMO, this country (U.S) is in for a rude awakening when folks discover that instead of shuttling their children to soccer, etc., they need to accept the fact that they now have an additional fulltime job - learning how to invest. Then again, this shift should spawn price competition for fee-based investment management services.

Posted by: erpguy at February 22, 2006 9:46 AM [link]