Review of The Small Stock Trader

[Cristina-Ioana Toader]

[Following is a volunteer review of "The Small Stock Trader" by Mika.]

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5 out of 5 stars

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In The Small Stock Trader, author Mika breaks down the world of stock trading for everyday investors. The book mixes practical stock market strategies with psychology tips, giving readers a straightforward guide to navigating small-cap trading.

The book has three main parts (excluding the introduction and conclusion). The first part, “Traits of a Small Stock Trader,” covers many easily grasped concepts, like the prerequisites you need when diving into the stock market. For example, in addition to passion and talent, there’s also a third prerequisite: practice. The author also touches on luck, efficiency, simplicity, flexibility, and a lot of focus and patience. The second part, “Fundamental Analysis,” is more technical. Although the author humorously suggests we should “know the difference between a hedge fund and a hedgehog,” don’t be fooled, and don’t underestimate this book. Prior knowledge is definitely required to get through this chapter, or you’ll get stuck on terms like bull and bear market, stock market cycles, inflation, EBITDA, P/E ratio, dividend, EPS (Earnings Per Share), ROE (Return on Equity), and others. So, if you're new to the stock market, I suggest this be your third or fourth book, after setting up some fundamentals.

Finally, there’s the “Psychology” section, where I got to see a real glimpse of the author. There are personal musings, such as, “The main focus is not on money, power, and career, but on freedom, security, and a balanced life.” There are also some interesting tidbits about China and its economy. The author claims that “China will become one of the world’s main financial centers, and its stock market and economy will have a global impact.” This book was not what I expected—it has a personal feel, especially with all the references Mika makes, like Lao Tzu’s quote, “Knowing others is wisdom, knowing yourself is enlightenment,” or Thomas Edison’s, “I have not failed. I’ve just found 10,000 ways that won’t work.” The book is peppered with these quotes, and they add a charming touch as they accompany nearly every theoretical aspect of the book.

I also enjoyed that the “Psychology” part of the book gives a real glimpse of the author as a person, sharing anecdotes, history, personal traits, and beliefs. For example, Mika shares that he’s a 30-year-old small stock trader whose mother always advised that the best place to invest money is in oneself—through education, reading, traveling, learning foreign languages, swimming, driving, and self-defense. It’s clear that he followed this advice, and after reading the book, I better understand the dedication: “To my mother.”

There’s not much to complain about regarding this book. The author makes several comparisons to his own practices, like focusing on about five Dutch small-cap retail stocks because they suit his personality, lifestyle, goals, and knowledge. He’s very honest in stating that this approach may not be useful for every small stock trader, which I appreciated. The conversational tone and straightforward language make it easy to follow, but I wouldn’t say this is a book for beginners. You should have some fundamentals down first. I think it’s more suited to medium and experienced traders. I did come across a small number of grammar issues, but the editing overall was solid, making the book easier to go through.

All in all, The Small Stock Trader is definitely worthy of 5 out of 5 stars.

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The Small Stock Trader
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