Don’t fall in love with your stocks! Love is always dangerous
posted on: December 10, 2012
How to develop confidence in the Dow Theory Today I read two good posts that highlight the importance of not falling in love with your stocks. In the “Systematic Relative Strength” blog, there is an interesting post concerning the risk of loving one stock. Please click here. In the “Big Picture” blog, there is another […]
Why I like timing? Why I love the Dow Theory as a capital protector?
posted on: December 5, 2012
When the stock market runs smoothly as it did in the 80s and 90s there seems to be little need for any timing device. Be it the Dow Theory or a moving average. However, when the cake is shrinking or not growing, or, simply, the market decides that it is time for lower multiples and […]
Special Dow Theory issue: Revisiting the 1987 crash
posted on: October 19, 2012
The Dow Theory saved its followers. As I promised earlier today, here are my two cents on the October 19, 1987 crash. So, how fared those that followed the Dow Theory? Were they spared? The answer if a clear: YES. They were spared. In this study, I will use “classical” Dow Theory with just the […]
Do they have something in common? Today Seeking Alpha published an interesting article named “Jim Rogers: The U.S. Faces Several ‘Lost Decades’” which you can read here If Rogers is to be proven right, the implications are really scary. Not only as investors but also concerning our day-to-day life. The comments to the article were […]
In German, they have a saying that goes: “Schusterbleibt bei deinen Leisten”which translates into Englishas “Clobber,stick to youtrade.” Inother words: Stay focused. For most investors, the Dow Theory is justan extra tool in their toolbox.It lookstoo simple to bethe consideredthe maintool. Furthermore, sinceit looksso simple,everyone believes thata cursoryreading of themain tenetsof DowTheory makes themexperts and, […]
Plain vanilla Dow Theory? Or does Dow Theory come in many flavors?
posted on: September 15, 2012
Part I. From Charles Dow to Richard Russell Before this blog continues growing, I feel a clarification is in order. I constantly allude to the Dow Theory as if it were a given. However, in the last 110 years substantially different investment and even trading styles have been advocated under the label “Dow Theory”. Is […]
The price of not heeding the Dow Theory: 6.05% from 06/29/2012 to date
posted on: September 8, 2012
I frequently visit “The Big Picture” to be updated on financial matters. It is a wonderful website. Yesterday I found this post entitled “Sell Side Indicator” which you can find here The gist of the post is a chart that shows the extreme bearishness of asset managers and analysts. In other words, since the Dow […]
Fundamental versus Technical analysis and Dow Theory. Who is right?
posted on: August 31, 2012
The sad truth is that whatever method you apply it is very difficult to make money in the markets. As the saying goes: It is easier to talk (or write) about money than making it. Thus, it is difficult to discern (a) the encrypted messages of technical analysis, and (b) the validity of the “fundamental” […]
The Dow Theory gives us order. It provides us with a framework to analyze the market.
posted on: August 30, 2012
We fail at making money in the markets not because of a lack of tools but because we (1) lack consistency in using our tools, (2) have an undefined time-frame and (3) lack of well defined exits (stops) Dow Theory addresses these three issues: It allows us to be consistent. Of course, to be consistent […]
