Introduction

The author Mark Minervini is an extremely well-known trader/investor who frequently appears on US TV. First of all, this author also has his own website, minervini.com, where you can apply for a premium membership. This gives you real-time stock tips, training videos and access to the ideas and thoughts of a very successful trader. However, this is only for people who trade intensively and have the necessary funds. The subscription costs a whopping US$ 499 per month (paid annually). So it’s really only worth it if you want to invest at least US$ 100,000 in total.

Book content

But let’s move on to the book, which is fortunately much cheaper, and in my opinion it is absolutely worth the money. At around 300 pages, it’s not a bible, but still contains a lot of information even for advanced traders.

It starts with basic psychology and paths to success. As banal as it may sound, success requires you to take a chance and “start”. Minervini does an excellent job of opening your eyes with honest, simple and uplifting words, peppered with all kinds of quotes. You are also immediately prepared for the fact that you will also have tough days in trading when pretty much everything goes wrong. This is no different for successful traders.

At the beginning, you are also introduced to the trading system he developed called SEPA, which is a very disciplined procedure for entering and exiting shares based on various conditions.

The next chapter introduces you to indicators such as the P/E ratio and PEG ratio (price earnings and price earnings growth), as well as the pitfalls in interpreting them. Here you can already see that it is not just a theoretical treatise, but that practical experience is included that can save you money.

The next chapter contains a detailed explanation of trends and their pitfalls, peppered with many sample charts. This is followed by explanations of categories, sectors and catalysts for price jumps (both positive and negative). Here, too, the numerous, comprehensible examples stand out, making the text much easier to understand.

This is followed by chapters on fundamental analysis and how to distinguish real winners from fake winners or losers. The quality of quarterly reports is also analyzed. And this does not mean pretty PowerPoint slides, but the quality of a company’s content. Then comes a very central point of Minervini’s system, namely to follow not only quality, but above all market leaders (“Follow the leaders”). Minervini rightly notes that cheap share prices almost always have a good reason. What costs nothing is also worth nothing. To put it harshly, but there is a lot of truth in this, and a trader like Minervini would not have been able to hold on for so long without a successful system. A chart of “Chipotle Mexican Grill” (ticker: CMG) caught my eye. When this book was published, this company was not yet very well known. But if you look at the exploding share price of this company in recent years, and it is mentioned here in this book as a prime example, that says a lot about Minervini’s excellent analysis.

The next chapter uses charts to show you which stocks are winners. And you don’t necessarily need complex technical analyses of the indicators to do this; with practice, even a beginner can recognize relatively quickly which stocks are trending. As the old trader’s adage goes: the trend is your friend! It is about volume, resistance/support zones, pivot points, breakouts and similar common chart phenomena, and as always, explained very illustratively with charts. It is the most detailed chapter and goes beyond the basics, but without getting too much into theories.

This is followed by two chapters on risk management, and these chapters alone are worth the money. They explain very clearly and comprehensibly how such a system works, how to set it up and why it is so incredibly important. And risk management is not just a lot of numbers, but also a lot of psychology. After these two insightful chapters at the end, you’ll be smarter, believe me.

Conclusion

The book is written in a very relaxed, entertaining style. You can tell that the author means well for the reader and that he doesn’t have to prove himself. Anyone looking for a good introduction with lots of examples will find everything they need here. And even advanced readers will always find helpful tips here. Above all, the pragmatism with many explanatory charts should be emphasized. Highly recommended, and the scope is just right. Not too obsessed with detail, but still enough to significantly improve your trading skills.
Although the book has been published quite a while ago, the knowledge and wisdom are still worth the money!

ISBN: 978-0071807227 (Amazon)