The Perfect Stock

The Perfect Stock, Brad Koteshwar, AuthorHouse, 2004

This is a fictionalized account of the rise and fall of the stock of a real company. In one year, the stock of Taser International, the makers of Tasers, rose by over 7000 percent. Despite this, few average investors made any money on the stock.

The narrator, an experienced investor, is asked, by another experienced investor, to talk to the people
behind the stock, to get the "inside story." He talks to the CEO, a major stock speculator, and to the brokerage firm handling the Initial Public Offering, or IPO. He finds that Wall Street shows a very different side to insiders than it does to average investors.

By the time Taser was available to the general public, the big investors had already made their money. Still, it became a "must have" stock. The price jumped from $50 to nearly $400 per share, and analysts speculated that the price could reach $1000 per share, so people were ready to hold it for a long time. Hindsight is always crystal clear, so what investors should have done, but few investors did, was to buy at, for instance, $100 per share. When the price reached a specific level, say, $130 per share, sell and don't look back. Even a small profit on Wall Street is better than nothing. The worst off were the late buyers, those people who bought Taser near or at its high, when the stock had only one direction in which to go.

Some investors engage in short selling, which is betting that a stock's price will drop. For those people,
while on its way down, Taser had an unfortunate tendency to bounce. It would go down for a while, then
suddenly rise by 10 or 20 points. The price would go down some more, then suddenly rise by another 10 or 20 points, driving those short sellers nuts. Unless an investor is patient, and really understands the market,
which few investors do, even with such an opportunity as Taser International, few investors made any money.

Obviously, this is a really specialized book. For those who are, or want to be, involved in the stock
market, this book is well worth reading.