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Overview
Linkage's Best Practices for Succession Planning provides the ultimate guide for planning, developing, implementing, and sustaining succession planning in any organization. This must-have book provides step-by-step instructions, practical advice, templates, and tools from some of the world's best companies and Linkage, a global organization development company that specializes in leadership development.
Linkage Inc.'s Best Practices for Succession Planning is the comprehensive resource that includes information needed to
- Ensure that succession management is owned by business leaders rather than just HR
- Assess potential for future roles, not just track record of performance
- Manage succession data on individuals and talent pools
- Balance talent development and acquisition in achieving future objectives
- Develop the processes, tools, and organizational capabilities necessary to effectively implement and sustain the system
- Integrate succession planning systems with other businesses and HR systems in the organization to achieve efficiency, consistency, and impact
Product Details
| ISBN-13: | 9781119212393 |
|---|---|
| Publisher: | Wiley |
| Publication date: | 12/15/2008 |
| Series: | Wiley Trading |
| Edition description: | 2nd ed. |
| Pages: | 208 |
| Product dimensions: | 6.00(w) x 9.00(h) x 0.44(d) |
About the Author
MARK R. SOBOL is the founding principal of Leadership Strategies International, Inc. and is part of A4SL Coaching and Consulting.
PHIL HARKINS is president, CEO, and chairman of the board of directors of Linkage, Inc., the company that he founded in 1988.
TERENCE CONLEY is executive vice president of human resources and corporate services for Cendant Corporation.
LINKAGE, INC. is a global organizational development company that specializes in leadership development. Linkage provides clients around the world with customized leadership development and strategic change solutions that include and integrate consulting, training, assessment, coaching, and benchmark research. Linkage also offers a full range of conferences, institutes, summits, public workshops, and distance learning programs on leading-edge topics in leadership, management, HR, and OD.
Table of Contents
Preface xiiiAcknowledgments xix
Introduction 1
Section I The World of the Day Trader 5
Chapter 1. Exploiting the Excesses of Capitalism 7
The House Edge 9
The Bid-Ask Spread 11
Section II Introduction to Day Trading 17
Chapter 2. Trading 101: Buying on Bad News and Selling on Good News 19
The Mind-set of an Online Day Trader 19
A Buyer When the Market Needs Buyers 20
Hit Singles, Not Home Runs 20
Brokerage Commissions Can Destroy Profits 21
Buy in on Fear, Sell in on Greed 22
The Slow Execution 23
Is the NYSE an Easier Market to Trade? 24
Section III How to Beat Wall Street at Its Own Game 25
Chapter 3. Exploiting Wall Street’s Conflict of Interest: Market Orders versus Limit Orders 27
Understanding Wall Street’s Conflict of Interest 27
Price Makers versus Price Takers 29
The Bargaining Process 30
Price Negotiation—Market versus Limit Orders 32
Wall Street’s Prey 34
Prelude to the Bid-Ask Spread 35
Chapter 4. The Day Trader’s Crystal Ball: Understanding the Bid-Ask Spread 37
A Snapshot of a Moving Picture 37
The Mechanics of Price Movement—Understanding What Makes a Stock Move Higher 39
Example 1: The Quote—Snapshot of a Moving Picture 41
Example 2: The Market Order to Sell—Hitting the Bid 46
Example 3: The Market Order to Buy—Lifting the Offer 48
Example 4: The Limit Order to Buy—Bidding for Stock 50
Day Orders versus Good-until-Canceled (GTC) Orders 52
Example 5: The Limit Order to Sell—Offering Stock 54
Haggling Over Nickels and Dimes 56
Example 6: Moving the Stock Higher 57
Chapter 5. The Role of the Specialist on the New York Stock Exchange 61
Using the Specialist System to Your Advantage 64
What If There Were No NYSE Specialist? 66
Buyer of Last Resort 67
Is the Profit the Specialist Makes Justified? 68
A License to Steal? 68
The Specialist’s Limit Order Book 69
Being on Both Sides of the Market 71
Narrowing the Bid-Ask Spread 72
Wide Spreads Protect the Specialist from Volatility 73
Handling a Large Sell Order 74
The Real Intentions of the Specialists 77
Beware When the Specialist Takes the Other Side of Your Trade 77
The Day Trader as a Shadow Specialist 78
The NYSE’s Fair Order Handling Rules 80
Never Reveal Your Hand 85
How Can You Determine Where the Specialist Lurks in the Stock? 85
Jockeying for Position 87
How Do You Know Where You Stand in Line? 89
When in Doubt, Ask the NYSE Floor 89
Tipping the Odds in Your Favor 92
Beware of the Specialist 93
Section IV Introduction to Scalping The NYSE: Taking Food Out of the Specialist’s Mouth 95
Chapter 6. The Day Trader’s Secret Weapon: Exploiting the Bid-Ask Spread 97
How Can You Make Money Trading Stocks that Don’t Move? 98
The Role of the Scalper 99
Hit Singles, Not Home Runs 100
Operating under the Radar 100
Avoiding the Glamour Stocks 102
Exploiting the Bid-Ask Spread 103
Finding the Trade’s Sweet Spot 103
Simplifying a Complex Process 104
Other Moving Parts to This Trade 105
A Bet with the House? 109
Too Much Work for Only $100 in Gross Profits? 110
A Few Words on Risk 110
Section V Trading The Market’s Momentum: How to Profit from Volatility 113
Chapter 7. Exploiting Market Volatility and Momentum: Strategies for Trading Volatile Stocks 115
The Specialist and the Upper Hand 116
Playing the Gap Open—A Strategy for Betting with the House 117
Buying on Bad News 118
Betting on the Specialist 119
Parameters of the Gap-Opening Trade 122
How to Tell If the Opening Trade Will “Clear” the Specialist’s Limit Order Book 124
Selling before the Second Wave 125
Trading Tick for Tick with the Market Indexes 127
Why Limit Orders Don’t Work in a Rally 127
Using the S&P Futures to Gauge the Sustainability of a Rally 129
Lightning-Fast Market Upsurge: How Offers Vanish in the Vapor Trail 129
Stock for Sale Becoming Scarce 130
Nasdaq and the Role of the Market Makers 131
A Few Words on Short Selling 135
Two Methods for Day Trading Nasdaq Stocks 136
The Apple Computer Trade 139
Buying Strong Stocks on Pullbacks 140
Opening the Stock Abnormally High 141
The Dangers of Buying a Strong Stock on the Opening Trade 141
Inflicting Heavy Damage on the Market Makers by Attacking Their Vulnerability 142
Chapter 8. The Day Trader’s Ticket to the Poorhouse: How I Managed to Lose $12,000 in Less than 24 Hours 145
The Pain of Missing a Trade 147
How Could the Stock Go Any Lower? 147
The Terrifying Feeling of Getting Caught in a Downdraft 148
A Feeling of Irresistible Greed 148
The Need to Break Even 150
Buying the Stock for the Third Time 151
Feeling of Devastation Leads to Useful Insights 152
Learning from the Mistake and Moving On 156
Can the Quoted Market Always Be Trusted? 156
A Fool and His Money Are Soon Parted 159
Appendix A.
The Day Trader’s Arsenal: Online Brokers, Trade Commissions, Real-Time Quote Systems, and the Home Office 161
Choosing an Online Broker 161
Negotiate the Best Possible Commission Rate 163
Make Sure that the Broker Can Route Directly to the NYSE 163
Per-Share versus Per-Trade Commission Rates 164
Setting up at Least Two Accounts 164
System Crashes and the Late Fill 165
Customer Service, Back-Office Problems, and Trade Discrepancies 167
The Remedy—Keep Good Trading Records 167
The Home Office and the Virtual Trading Floor 169
Appendix B.
Considerations for Trading for a Living: The Allocation of Trading Capital, the Pattern Day Trader Rule, Using Margin and Trading Part-Time vs. Full-Time 173
Allocation of Trading Capital 174
The Pattern Day Trader Rule 177
Trading on Margin 177
Margin Calls 178
Part-Time versus Full-Time Trading 179
Index 183
Preface
It's 9:00 Monday morning, and I awake to the sounds of my alarm clock. I couldn't be happier: It is the beginning of another trading week. I roll out of bed," commute" into the next room, and turn on my computer. The work week has begun.
But this is not your typical 9-to-5 job. There is no office to go to, no car pool, and no "good mornings" to co-workers. There is no boss in the next room. I don't produce a product, nor do I sell one. When people ask me what I do for a living, I pause. In fact, I don't really "do" anything. There are no clients, no projects, and no deadlines. There are no co-workers, no staff, and most of all, no friends. I am known by account number only. I am in total isolation. The entire day I may not see or speak to another soul. The work is extremely intense. The pace is fast. In many regards, this is warfare. It is a job unlike any other in the world.
Sometimes I do feel guilty. I am 25 years old and I answer to no one. My day is spent in the comfort of my own home. People may criticize what I do, but on a good day I can make more money in a single afternoon than most of them may make in three months, without ever leaving the house. Still, I am not providing a service to anyone. Is the world a better place because of what I do? Sometimes I don't think so. Very few people understand. They think it's gambling: I tell them it's not.
I am a day trader. My job is to buy and sell stocks for a living. I do not work on Wall Street. My seat is not on the floor on the New York Stock Exchange, it is in cyberspace. This is rarefied air. These are untested waters. I am among a new breed of entrepreneur and this is a new frontier. But do I have what it takes? Mentally, am I strong enough? I've been doing this for almost two years. In the past I have made very good money. But the past is for cowards. And there are no guarantees. Today I must make money.
It is now 9:30. The bell has rung and the stock market is open. I take my seat at the table with the world's biggest banks, brokerage firms, and mutual funds. The chess match has begun.
The explosive growth and low cost of online trading has created a new class of investors who can make a living buying and selling stocks over the Internet in a way once reserved for Wall Street's most powerful brokerage firms and investment banks. The goal of this book is to provide a one-stop, comprehensive overview of how to make a successful living, whether full-time or part-time, by day trading over the Internet. We will examine all aspects of this new and untested area, from what it takes to get started, to the dangers and pitfalls of using online brokers, to an in-depth analysis of which trading techniques work and which don't.
The information provided here will reveal closely held and profitable short-term trading secrets that can only be learned from having worked on one of Wall Street's trading floors, combined with the real-life experience of someone who makes a living trading over the Internet. Quite simply, this is information that most stockbrokers, financial planners, and everyday investors do not possess. With this in mind, the emphasis is on simplicity. The best and most successful traders are those who keep things simple. This is a book on trading, not investing. Therefore it is written in a practical, nontheoretical manner for the reader who might have little or no investment experience, but only the desire to learn more about one of the most exciting and profitable businesses of the next millennium.
For me, day trading is an obsession. I absolutely love what I do. In this book, I hope to share that excitement with you. I am 25 years old. Since graduating from Colgate University in 1995, I have never wanted to do anything with my life but trade. I felt then, and I feel now, that trading is and will always be the most lucrative job on the face of the earth, if and only if you know what you are doing.
I began my career out of college working for two large brokerage firms: first for Olde Discount in Detroit, then for Gruntal and Company on Wall Street. At the age of 22, I was trading literally millions of dollars of the firms' capital. It didn't take long to learn how Wall Street made its money. There was a system in place, and there were traders such as myself whose sole job it was to exploit that system for profit. That's when I came to the realization that the knowledge I had, if used the right way, could make me substantial amounts of money. I also decided I had wasted enough time making other people rich.
This was around the same time online trading was beginning to come into its own. The landscape of investing was changing, and thanks to the Internet, trades were becoming extremely cheap. It was slowly becoming clear that it was no longer necessary to work on Wall Street to participate in this game. The rules were changing, and the Internet was the key.
That was all I needed to know. For me, this was the opportunity of a lifetime, and I wasn't going to waste another minute. At the age of 23, I left Wall Street and began an exciting journey that has led me to write this book. I moved back home to upstate New York, bought a computer, renovated my old bedroom into a home office, and began trading full-time for myself. From that old bedroom, I have traded over 15 million shares of stock over the Internet (almost $400 million in transaction value) since I started. My hedge fund, the Farrell Preferred Stock Arbitrage Fund, LP, returned over 65 percent in its first year using these methods. There is really no other way to put it: The trading strategies mentioned in this book work, and they work well.
And the lessons I have learned along the way are invaluable. Over the last two years I have made money and I have lost money, but I have enjoyed every step of the way. In this game, if you can weather the storms, ride out the inevitable ups and downs, limit your risk, and have confidence in your own abilities, you will prosper. You always have to remember that what you are doing is truly special. The job of the Internet day trader didn't even exist 10 years ago. I have been fortunate enough to be able to make a very good living in a way that many people can only dream of. And I wouldn't change that for the world.