For those who are not familiar with Bob Farrell, he was the dean of Merrill Lynch research for four decades, I was fortunate to have had him as a mentor, and his 10 market rules to remember are now 30 years old and they have been a cornerstone of my strategy since I first joined Merrill in 2000 and I still abide by these rules today; they have not gone out of fashion.Since I didn't know about them, I just HAD to find more.
So here are the 10 rules as found via Google:
- Markets tend to return to the mean over time.
- Excesses in one direction will lead to an opposite excess in the other direction.
- There are no new eras — excesses are never permanent.
- Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways.
- The public buys the most at the top and the least at the bottom.
- Fear and greed are stronger than long-term resolve.
- Markets are strongest when they are broad and weakest when they narrow to a handful of blue chip names.
- Bear markets have three stages — sharp down — reflexive rebound —a drawn-out fundamental downtrend.
- When all the experts and forecasts agree – something else is going to happen...
- Bull markets are more fun than bear markets...