Although Pyramid Investing Book is still a long way from being published, I am making a steady progress writing it. At this time I do have its layout composed and I would like to share with you the contents of the book. I hope that will give you a flavor of topics that I plan on addressing on this blog in near future. The contents can be seen as an example of what I have in mind as far as the foundation of blog posts, or as I termed them: permanent articles.
I consider this article as a “snapshot in time” or present state of the book contents. I have no intentions of coming back to this article and updating what I posted. However, at the same time of posting this article, I also added book contents to the Pyramid Investing Book page, which can be accessed through the page menu bar located on top of every blog webpage. The Book page will always be up-to-date. The reason I mention this is because not all the pieces of my book puzzle are in place yet (i.e. written) and I expect many changes and modifications to the book contents before it gets finalized. As those changes occur, I will update the Book page accordingly.
Another page I recently introduced on this blog is Navigation page. You can use that page to help you get a quicker access to different articles on this blog. Navigation page is somewhat related to the Book page since comparing the two, you can get an idea of what has been posted already versus what is yet to be posted.
So here is the Pyramid Investing Book contents at the time of posting this article (October 17, 2009):
1. FOREWORD
- Birth of an Idea
- My Investing History
- Perfect Solution
- What is Pyramid Investing?
2. GENERAL PYRAMID INVESTING
- Diversification Dimensions
- Limitless Market Field and Web of Success
- Greed and Fear – Don’t Be One of the Losers
- Do We Really Need News?
- The Role of Analysts and Commentators
- Permanent Contest to Call the Top and Bottom
- Driving Investors (Into Wrong Direction)
- Limited Use of Fundamental and Technical Analysis
- Profiting from Conflict of Interests
- Swayed by Looking Back and What If Thoughts
- Comparison with Dividend Yielding Stocks
- Ordinary Techniques that Usually Fail
- Pyramid Investing as Concept for the Future
- Prerequisites for Pyramid Investing
- Basic Formula for Profits – Can’t Get Any Simpler
- Volatility is Your Friend!
3. DEFINING PYRAMID
- Pyramid Name Origin
- Geometry and Shapes
- Coordinate System
- Price-Related Terms
- Discrete Domain and Depth
- Amount-Related Terms
- Cumulative Measures
- Full and Range Pyramid
- Special Case – Skyscraper
- Operations with Pyramids
4. PYRAMIDS AND CHARTS
- Basic Oscillation
- Amount vs Time
- Price to Sell – Offset
- The Most Practical Rule
- Trading and Trending
- Combining and Superimposing
- Stacking Pyramids
- Excel Examples
- Alternative Approaches
- A View from Shorting Perspective
5. FEATURES AND CHARACTERISTICS
- Shares Invested (Incremental and Maximum)
- Dollars Invested (Incremental and Maximum)
- Calculation of Profit
- If You Cannot Avoid Margin
- Volatility vs Trend
- Efficiency of Pyramids
- Pyramid Optimization
- Account Value Volatility
- Unrealized and Realized Profits
- Account Breakeven Point
- In Green Most of the Times
- Action (Amount of Trades)
- Backtesting
6. APPLICATION OF PYRAMID INVESTING
- Major Markets
- Gold and Other Precious Metals
- Possible Trading Limitations
- Choosing Investment Vehicles
- Diversification in Pyramid Investing
- Volatility and Bankruptcy
- Aggressive or Conservative?
- Choosing a Broker
- Entering the Position
- Holding your Positions
- Selling out Pyramids
- Chasing or Not Chasing?
- Dynamics
- Nesting
- Modifying Existing Pyramids
- Tweaking the Orders
- Resisting Urges and Emotions
- Taking Profits
- Ordinary Surprises: Price Gaps
- Tracking Profits
- Tracking Action
- Performance Measures
- Excel Examples and Graphs
- Pyramid Investing Calculator
- 401(k) Application
7. MONEY MANAGEMENT
- Never Run Out of Cash
- How Many Pyramids?
- How Much Money?
- What to Do With Unemployed Cash?
- Your Core Holdings
- The Role of Physical Gold
- Portfolio Management
- Portfolio Sensitivity and Ratios
- Tweaking Portfolio
- Focus on Profits, Not the Account Value
- Other Personal Finance Aspects
- Personal Finance Ideas
- Increasing Portfolio Efficiency
- What to Do With Profits?
8. CONCLUSION
- Stay Relaxed and Stress Free
- Enjoy the Day
- Enjoy the Life
- Consider Yourself Successful Investor
9. GLOSSARY
10. INDEX
![[Most Recent Charts from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/t24_au_en_usoz_4.gif)
Whow! It looks like this is going to be massive book with maybe 1000 pages or so. .right?
Anyway, from what I read here Pyramid Investing is a contrarian method and from the chart you have drawn on the top of this page it looks very much. . not to say identical. . . to my Vortex TurboVest Method (A leveraged AIM variant).
I am not sure if I should congratulate you already for having created this method that looks like my TurboVest, OR if I should congratulate myself for having invented TurboVest many years ago that looks very much the same as the Pyramid method.
I am very curious as to the details of your Pyramid method. I will read up on the chronological development that you have presented.
Regards/Conrad
Conrad,
The book is not done yet – not sure how many pages. I strive for quality of content, not number of pages. Chapters are quite short and easy to digest. The book is supposed to help ordinary folks to achieve lifetime of consistent profitability. They mostly have no clue where to start and how to go about investing in a professional way. Not to mention all the deceptions that media is constantly pumping to all of us.
Pyramid Investing book is not going to be another cliché investing book. It is not going to be “all you need to know to make consistent profits”, since, really, one doesn’t need to know much. It will better be described as “all you need to DO to make consistent profits”, since hard work on one’s portfolio is what counts.
There is no need to congratulate me since it wasn’t me who created or invented this method. Pyramid Investing is just one possible implementation of “Buy Weakness, Sell Strength” concept. Bankers are the ones who have been applying this concept in one way or the other for decades (even centuries) with tremendous multi-generational success. There are infinite number of ways to play this simple concept. The problem is, very few do it and most do the exact opposite. But that is a long story…
My idea is to help lift the curtains of investing darkness and make this concept understandable, accessible and applicable for the ordinary amateur investor. Life is already too hard and investing should not be making it even more difficult.
Well, I hope you will get the message across better than I could and get many people to understand it!
The funny thing is that this method of buying low/selling high is very obviously the backbone of making profits but it still systematically receives criticism from the Investment Community: the reason quoted is that it’s weakness is the danger of losing the entire investment with deep divers that do not return. . . the Enron Syndrome (all eggs in a bad basket).
We know this type of investing works well if proper precautions are taken to guard against losses.
Regards.
I may or may not succeed in “getting the message across”. I am not burdened by that as I am a winner either way. I do my personal investing very successfully according to principles that I expose on this blog. I am willing to share what I do and others are free to adopt whatever they deem credible and/or profitable. I have no illusion that every single one of my readers is going to follow my steps. However, those who do will be grateful to say the least. Those who don’t may very well find themselves on the other side of my trades. And remember: I never trade to lose!
I have to admit that I have small financial reward from this blog. Few bucks are generated from time to time when readers click on ads in the sidebar or footer of pages they read. That is enough to pay for domain registration and blog hosting. Besides that, I have no other expenses except my effort and time I invest in this blog which I do on a voluntary basis anyway.
I do not pay much attention to criticism that is not constructive. Thanks God we are all different. Otherwise, there would be no market or price fluctuations. In a sense, we do need others who think differently and are willing to trade with us (I call them suckers).
I do believe that some of our critics are hypocrites. They do agree with us and they do Pyramid Investing for their own accounts. However, they never admit it publicly since they are afraid of losing the other side of their trade or they think they will make more profits if they keep their trading technique secret while bashing the very technique they apply.
I always said: there are more than enough suckers to make plenty of profits for us – pyramid investors. I don’t believe me or anybody else will ever convert the critical mass of suckers into pyramid investors for our investing profits to dry up. Thus, I am and I always was open to share Pyramid Investing secrets with whoever wanted to listen.
The reason our critics quote to dispute our method has no merit for prudent pyramid investors. Our foundation of investing is Gold. Chances are extremely low Gold will go off the board anytime soon. With security of Gold and its associated volatility, we make handsome profits on a consistent basis by applying Pyramid Investing. The risks are negligible.
On the other hand, Pyramid Investing is so profitable that it trades average cost of position (or pyramid) to zero in a relatively short time. After that, we are dealing with Market’s Money. Then the risk goes to zero as well and we couldn’t care less if underlying stock goes off the board.
Therefore, one needs to apply prudent portfolio management and build the golden foundation first. Only then, one can work on building “castles” on top of that foundation while using more volatile instruments that also happen to have significantly higher chance of going off the board.
Well said!
Thanks for your comments. . .we travel the same journey.
Conrad