OK, he probably didn't write about trading... but you know, analogies can be found anywhere and often they help see things in the right perspective. So, here is this character, Gunslinger - hard-boiled, well-trained, capable of handling almost any situation he encounters, "hard caliber" as they call him. Facing quite complicated case with a lot of unknown interests involved, a lot of inter-connections, relationships and conflicts interlaced, he acts as if he sees it all clearly and can predict any turn of events. He in fact does - whatever happens, he already prepared the antidote. When questioned by his crew, he tells them that he knows in advance the rules by which this kind of situations evolve. "First smiles. Then lies. Last comes gunfire" is his template for it.
First analogy is simple and lies right on a surface. Pretty often intrigue with certain companies (and their stocks of course which is our subject of interest) resolve themselves in just this sequence. Remember Bre-X? First came smiles - everyone was in love with the story and stock which went from pennies to over $20. The lies flooded the cyberspace - all kinds of false reports, interviews, fabrication of samples, disappearance of main characters. Then gunfire started - disrobing, finding out the truth, courts, punishments. This is rather normal way of resolution of such intrigues and next time you come across something like this, you may want to remember Gunslinger's lesson and get out when smiles start fading out. You will be rewarded by saved profits, admiration of those around you and opportunity to shrug indifferently with "seen it all" face expression.
There is one more level in this analogy though. To the main character's friends his ability to foresee what happens next seemed almost supernatural. It was great intuition indeed - but what was it based on? On simple recognition of the situation. It's a newbie to whom every situation seems to be different. A seasoned trader has seen enough of them to catch the similarities and find the guidance in those. Over time, your arsenal of "been there, done that" situations will grow enabling you to recognize them and apply pre-canned response to them.