Written by Tony Locantro, 1 April 2014.
“At the start of the bull market we have all the paper and they have all the money. At the end of the bull market we have all the money and they have all the paper”.
Regardless of the number major “booms” and devastating “busts” the majority of investors/speculators are normally wrong in the end. History has provided us with valuable lessons, yet the key emotions of fear and greed combined with a dose of stupidity create extreme volatility in both directions and opportunities for those not swept up in the herd activity.
In the “social media” age we are literally now bombarded with conflicting messages, calls and sales pitches from a variety of marketing geniuses, self-proclaimed gurus and those simply looking to milk your wallet even further. I admit to being part of this epidemic from being a content provider in a world now drowning in content. Let’s face it the majority of “Tweets” these days will have all the longetivity of a male orgasm (unless your Justine Sacco), yet I can see some major issues ahead in the next “speculative bubble” which will be the first where rumours and Figjam will spread to thousands of people instantaneously via the little blue bird. As FOMO increases as with any bubble, you will see traditional blue chip investors swept up in the mania holding a portfolio of rubbish on margin.
Apart from speculative bubbles, the other danger to investors/speculators is too much information or TMI as many parents of teenagers would hear often. The three books I strongly recommend to my subscribers (along with Don’t Sweat the Small Stuff by Richard Carlson) are at the bottom of this article, however Bob Farrell’s 10 Market Rules to Remember are well worth expanding on and adding a more “speculative” feel to them.
Bob Farrell commenced his career at Merrill Lynch in 1957 following a period of study under the great value investor Benjamin Graham at Columbia University. In 1967 he became Chief Market Strategist (1967-1992), and remarkably prior to that for 16 of the 17 prior years he was the top ranked Wall Street analyst in predicting the direction of the stock market. His 10 Market Rules to Remember were published in 1992.
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Tony Locantro is one of the many outstanding keynote speakers presenting at the 4th annual Resources Investment Symposium in Broken Hill, 25-28 May 2014. To register, or find out more about the symposium – Click Here.