Index

Access, 87 Bank accounts, 75 Accounting fi rms, 69 Bankruptcy, 27–28, 53 Active trader, 7 Bank trust departments, 20 Aduddell Industries, Inc. Baruch College, 103 (ADDL), 127–129, Bear raid, 13 132–133 Bidding up shares, 104 Advice, getting and giving, 3–6, BigCharts.com, 37 36, 70–71, 166 Biotech companies, 152, 153 Airline stocks, 157–159 Biotech stocks, 19 Alcatel, 23 Bluefi re Associates, 106 Amazon, 104 Boiler rooms, 165 American Airlines Corp. (AMR), Boredom, 81 157–158 Breaking the back of a American Express, 164 stock, 16 American Stock Exchange Brokerage fi rms, 19, 20, (AMEX), 7, 141, 142, 154 76–78, 130 Amgen, 153 Broker-dealer, 3, 12 Amsterdam Stock Exchange Bucket shops, 165 (Beurs), 86 Budweiser, 164 Analyst, 5, 7,COPYRIGHTED 15, 25, 71, 91 Buffett, MATERIAL Warren, 164 Aptimus, Inc. (APTM), Bulletin board, 34, 144 109–121 Business condition, 13 initial public offering, 114 Business media, 90–91, 140 tender offer, 114–115, Business news, 113 117–119 Buy-and-hold strategy, 4, 75 Assets, 53, 54, 151 Buybacks, 13, 112–119

169

JJWBK198_Index[169-174].inddWBK198_Index[169-174].indd 169169 66/5/08/5/08 33:45:58:45:58 PMPM 170 Index

Buying, 85, 137 Day-trading, 5 Buying power, reserving, 81 Dealers, 129, 130 Debt, 13, 53 Call options, 60, 61 Decimal pricing, vii Canada, 86 Delta Air Lines, 159 Capitalization, 13, 57, 101, Desirability of company, 111 111, 152 Diversifi ed portfolio, 18, 155 Carbontronics, 144 Downside exposure, 117 Cash holdings, 13, 151–153 Downside trading, 7 Certifi cates of deposit (CDs), 8, 75, 88 Electronic access, 4, 36, 137 Chapter 11 bankruptcy, 143 Electronic communications China, 33, 86 network (ECN), 77, 78, 105, Clean shell, 54, 55, 125 116, 128 Clinton Administration, 143 Electronic sorting and scanning CNBC, vii, 89 systems, 37 CNN, 91 Electronic trading, 3, 5 Coca-Cola, 7, 164 Employee stock ownership Cohen, Steven A., 93 plans, 152 Commodity exchange, vii England, 86 Common stock, 113 Equities markets, 4 Compensation, 113 Exchanges, vii, 7 Computerization, 167 eXegenics, Inc. (EXEG), Computerized order entry 149–151, 154 programs, 130 Experts, Wall Street, viii, 15, Continental Airlines, 159 97–98 Conventional investing, xiii Conventional wisdom, 1–8, Fear, 79 71, 75 Field of business, 13 Convertible bonds, 126 Financial media, 88–91 Corporate structure, 111, Financial statements, 113 126 Fisher, Mel, xi Corpses, 153 Forbes 400, 150 Covered call writing, 61, 62 Ford, 7 Creditors, 53, 54 Forgotten companies, xii Cytoclonal Pharmaceuticals, Forgotten stocks, 15, 125, 167 149 France, 86

JJWBK198_Index[169-174].inddWBK198_Index[169-174].indd 170170 66/5/08/5/08 33:45:59:45:59 PMPM Index 171

Fraud and abuse, 69, 73–74, Intel, 7 87–88 Internet companies, 101 FREESHOPS, 114 Internet meltdown, 13, 69, Frost, Dr. Philip, 150 100, 126 Fund manager, 24 Internet stocks, 19, 100–103, 117, 126 Gains, 21, 85 Intraday price fl uctuations, 5 Gencor Industries, Inc. Investing, 5 (GENC), 141–145 Investment-grade stocks, 21 Genentec, 153 Investors, 85 General Electric, 7 Ivax, 150 Germany, 34, 86 “Going private” attempts, 13 Japan, 86 Golf Warehouse, 108 Johnson & Johnson, 164 Greed factor, 32, 79, 126 Joint ventures, 152 Hedge fund, 6, 92 Key Pharmaceuticals, 150 and volatility, 93 Large-cap stocks, 14 High-speed information fl ow, 4 Levitt, Arthur Jr., 87 High-water mark, 94 London Stock Exchange (LSE), Holland, 86 34, 86 Hot tips, 4 Lone Wolf Energy, Inc., 128 Hurricane season of 2004 and Long-term equity anticipation 2005, 131–132 securities (LEAPS), 64 India, 86 Low-priced stocks, 13–14, Industry status, 13 15, 18 Infl ation rate, 75 Low-priced value investing, xii, Information, dissemination 11–12 of, 137 Low-priced value stocks (LPVS), Information sources, 36 xii, xvii Initial public offering (IPO), as alternative to mainstream 69, 114 investing, 71–72 Inside information, 6 criteria for, 12–13 Insider purchases, 13 discovering candidates, 31, Insiders, 137, 138, 154 35–49, 71, 111, 163 Institutional investors, 24–25 and institutional investor, Insurance companies, 20 24–25

JJWBK198_Index[169-174].inddWBK198_Index[169-174].indd 171171 66/5/08/5/08 33:45:59:45:59 PMPM 172 Index

understanding, 18–19 Money managers, 24–25, 92, 94, versus conventional investing, 165 20–24 Money market funds, 8, 75 Lucent Technologies, 23, 27 Morgan Keegan & Co., Inc., 145 Lynch, Peter, 156 Murdoch, Rupert, 91 Mutual fund(s), 6, 20 Management, 135–145 Management apathy, 13, 15 Naked call writing, 61–63 Management stock purchases, Nano-cap stocks, 14, 165 13, 113, 114–116 Narrow-range trades, 7, 21 Marcus, Joel, 153, 154 Nasdaq National Market, 7, 19, Margin, 82 20, 57 Marketable securities, 151 National Association of Market access, vii Securities Dealers (NASD), Market capitalization (market vii, 13, 35, 103, 130 cap), 14, 24, 140, 165 Negative events, 26 Market conditions, 15 Neutral stocks, 7–8, 21 Market cycle, 18 Neutral zone, 6 Market letters, 34 New management, 13 Market-maker interest, 13, 15 News, fi nancial, 89–91 Market makers, 16, 119–120, News releases, 113 129, 130 New York Stock Exchange Market-making, vii (NYSE), vii, 7, 28, 130 Market-making community, 102–103, 119 Olen, Gary, 99 Market manipulation, 13 Opko Health, Inc. (OPK), 149, Market-out clause, 118 154 Marketplace, overview of, 83–94 Option contracts, 60–63 history of, 86–87 Option premium, 60–62 Market reforms, 4 Options, 58–63, 86, 113 Media, fi nancial, 88–91 Options straddling, 61 Mega-cap stocks, 14 Options strategies Mergers, 54–55 spread, 63 Micro-cap funds, 24–25 straddles, 61, 63 Micro-cap stocks, 14, 165 strangles, 63 MicroStrategy Inc., 58 Over-the-counter (OTC) trader, Mid-cap stocks, 14 129

JJWBK198_Index[169-174].inddWBK198_Index[169-174].indd 172172 66/5/08/5/08 33:45:59:45:59 PMPM Index 173

Panic, 79 Research and development Patience, exercising, 78–81 (R&D), 149, 153 Penny stock promoters, 32–35 Research departments, 20 Penny stocks, 11, 13–14, 16–18, Restricted shares, 126 25 Reverse splits, 56–58 Pension plans, 152 Rewards, 5 Pfi zer, 7 Rights, 126 Pink sheet, 34, 42, 144 Risk, 5, 75, 80 Pitt, Harvey, 87 Risk evaluation, 27 Playing fi eld, viii, ix, xiii, 49 Playing the market, 8 SAC Capital Partners, 93 Portfolio managers, 16 Salesmen, 33 Portfolio performance, 24–25 Sarbanes-Oxley Act, 55, 140 Position, establishing, 104–107 Savings accounts, 88 Preferred stock, 126 “Sealed mouth” strategy, 72–73, Price, of stock, 12, 80, 111 79 Price appreciation, 6–7 Securities and Exchange Price-earnings (P/E) ratio, 13, Commission (SEC), 13, 34, 130 35, 77, 87, 112, 130, 142, 144 Priceline.com, 58 Selling, 85, 127 Proctor & Gamble, 164 Selling short, 16, 86, 120 Profi ts, 80, 85, 117 Share price collapse, 13 Promoters, 126 Shell rebirth, 13 Public fl oat, 117–119 Short position, 16 Publicly traded corporation, Short squeezes, 6, 16, 120 111, 125, 126 Simmons, Jim Harris, 93 Public shells, 54–58, 125–127 Sinking funds, 113 Puts, 60, 61 Small-cap Nasdaq stocks, 34 Small-cap stocks, 14, 165 Rate of return, 117 Specialists, 129, 130, 165 Regulation, 166 Speculative stocks, 19 Regulators, 19, 70, 87, 130, Speculators, 85 139–140 Sportsman’s Guide (SGDE), a Regulatory announcements, 6 classic LPVS, 95–108 Regulatory compliance, 13 Spreads, 61, 63 Renaissance Technologies Stock analysts, 5, 7, 15, 25, Corporation, 93 71, 91

JJWBK198_Index[169-174].inddWBK198_Index[169-174].indd 173173 66/5/08/5/08 33:45:59:45:59 PMPM 174 Index

Stock exchanges, vii, 7 Wall Street “experts,” viii, 15, Stockholders, 55 97–98 Straddles, 61 Wall Street Journal, 91 Strangles, 63 Wal-Mart Stores, 22 Warrants, 59–60, 63–65, 126 Tacit collusion, 93–94 Western Electric, 23 Take on the Street (Levitt), 87 Worldquest Communications, Tender document, 113, 116 155 Thinly traded stocks, 76–78 WQN Inc. (WQNI), 154–157 Tout sheets, 34 chart, 156 Traders, 85, 129, 165 Trading, 5 Yahoo! Finance, 38–49 Trading volume, 12 Analyst Opinion, 41–42, Transparency, vii, 86 43 Treasure hunters, xi–xii Charts, 47, 49 Trump Hotel & Casino Resorts, Headlines, 39–40 Inc., 28 Historical Prices, 45–46, Trusting brokers, 4 47 Insider Transactions, 44, 45 Uncertainty, 79 Key Statistics, 41, 42 Uncovered call writing, 62–63 Major Holdings, 46–47, 48 Underwriters, 13, 15, 100, 121 Message Board, 44–45, 46 United Airlines, 159 Profi le, 40–41 United States, 86 SEC Filings, 42–43, 44 Upside gain, 117 Summary, 38–39 Upside potential, 7, 20, 21, 27 Zenex International, Inc., Valuation of shares, 139 128 VectorVest.com, 37 ZENX shares, 130–133 VOIP, Inc. (VOIP), 156–157 Zenex Telecom, Inc., 128 Volatility, 91–92 “Zero tolerance for loss” hedge funds and, 93 technique, 12

JJWBK198_Index[169-174].inddWBK198_Index[169-174].indd 174174 66/5/08/5/08 33:46:00:46:00 PMPM JJWBK198_Index[169-174].inddWBK198_Index[169-174].indd 175175 66/5/08/5/08 33:46:00:46:00 PMPM JJWBK198_Index[169-174].inddWBK198_Index[169-174].indd 176176 66/5/08/5/08 33:46:00:46:00 PMPM JJWBK198_Index[169-174].inddWBK198_Index[169-174].indd 177177 66/5/08/5/08 33:46:00:46:00 PMPM JJWBK198_Index[169-174].inddWBK198_Index[169-174].indd 178178 66/5/08/5/08 33:46:01:46:01 PMPM