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Exploding The Myths - Frank Watkins

This book is a must read for any new entrant to stock market investing. Frank explodes some of the myths that surround the stock market and points out the traps and pitfalls to which unwary newcomers fall prey. Frank has a very clear message when it comes to investing your hard earned capital. "By investing visually you can get your timing right - buy stocks that are rising and make constant profit regardless of market conditions"

Chapter 2 Investment myths

Each stock market boom brings about a new wave of entrepreneurs and marketing gurus who will take advantage of the upswing using slick advertising and catch phrases to lure you into the latest investment. Dividend imputation funds, ethical investing, asset allocation, derivative trading and dollar-cost-averaging give the industry an exotic flavour. Money flows readily from our pockets into the latest managed fund.

I have felt for some time that many of the advertising slogans are derived from old ideas that will not help you to be a profitable trader. These slogans along with other "old wives tales" are what I lump together as market myths. As each new share market boom arrives another generation of new investors is swept along on the crest of a wave that finally comes crashing down on them. Bewildered first timers are left holding worthless pieces of paper as companies enter bankruptcy and disappear off the face of the planet.

Short-term trades entered for instant profit become long-term investments relegated to the bottom drawer. Losing traders have no idea what went wrong. They are often too embarrassed to make an effort to analyse their mistakes, pass on their knowledge and ensure the next generation is more successful. Once bitten, twice shy! Don't expect to get an education from the broking industry. It does not exist for that purpose. It is there to take a commission or a management fee from you. Don't expect your broker to make above average returns for you. Again, he is there to earn a commission. Each boom-time brings a new wave of investors being advised by a new wave of young advisors who have limited experience and lack the knowledge required to outperform the Index. Given that industry statistics show that 80% of newcomer lose, how good is the industry?


Many myths have been perpetuated over the years. You will be aware of them but will not understand how they affect your attempts to beat the averages. It is these Investment Myths that have led me to write this book. They are myths because they will not help you outperform the market index. I expect you want more than that. This book is about exploding those myths and trying to set the newcomer on the road to financial independence through profitable trading.

Myth One

Time in the market is important, not timing! This is the biggest load of rubbish that I have ever heard. This saying is for those who are unable to get their timing right. For those who know better, it is a myth. Waiting years and years for an investment to produce a higher than average return rates as the greatest fallacy of all. Is there any point buying shares in say Melbourne IT at $12.00 or $14.00 in March or April 2000 and watching for a couple of years as they go down to less that $1.00? Timing is of paramount importance! To suggest otherwise is absurd. Everything we do requires good timing..........
 

I feel that Frank's book has helped me more than anything I have previously read. Don

Although you have taught us most of the books contents many times in your lectures, it seems ... the message needs to be reinforced on a regular basis. This can now be done by reading your book every few months. Dudley

I have a library of books on technical analysis and trading ... some left me confused, most left me frustrated and disillusioned. "Exploding the Myths" I not only finished reading ... I think I can see for the first time how simple and stress free trading can be... It's simple, it's special and a must read. Ben

My conclusion is that this is the most useful, logical and commonsensical book I have ever read. This is more than a book, it is a life changing experience. Andrew

Customer Caution Notice: Direct investing in the stock market can result in financial loss. Historical results are no guarantee of future returns.  No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. Stock tips  or ‘buy’ or sell recommendations are not provided. This educational information is not designed to replace your Licensed Financial  Consultant or your Stockbroker. It has been prepared without regard to any particular person's investment objectives, financial situation and particular needs. This information is of a general nature only so you should seek advice from your broker or other investment advisors as appropriate before taking any action. The decision to trade and the method of trading is for the reader alone to decide. Refer also to the full disclaimer in our Terms and Conditions 

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Jim Berg and John Atkinson are Authorised Representatives (AR Nos. 322724 and 1251439) and ShareTradingEducation™.com Pty Ltd (“STE”) is a Corporate Authorised Representative (CAR No. 322726) of Longhou Capital Markets Pty Ltd, Australian Financial Services Licence AFSL 292 464. Examples from the Australian and USA markets are provided to demonstrate that Jim Berg’s principles may be used globally. This educational material is from an Australian source and complies with Australian law and not necessarily any other (local) law. Direct investing in the stock market can result in financial loss. STE products have been prepared for the general information of investors and do not take into account the investment objectives, financial situation and particular needs of any particular person. Persons intending to act on information in STE's products should seek professional advice to confirm that the investments or strategies mentioned are appropriate in the light of their particular investment needs, objectives and financial circumstances prior to taking any action. Refer also to the full Customer Caution Notice in our Terms and Conditions.