|
General Investing Articles |
Written by John Forman |
|
|
Are you studying finance? If so, then terms like present and future value, efficient market theory, capital budgeting, arbitrage pricing and a whole slew of other exciting phrases are becoming part of your vocabulary. And if you're thinking about studying finance in college or graduate school, be prepared to be lectured on those topics and more during your coursework. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Prechter |
|
|
March Madness – aka the NCAA college basketball tournament – is known for its fabulous upsets and its infamous chokes: like Gonzaga choking against UCLA in the Sweet Sixteen last week, losing in the final 10 seconds of the game after leading all game long. We've all seen it happen, and some of us have even participated first hand – whether it's basketball, football, baseball, or even an individual sport like golf – you're ahead, the game's in the bag, the champagne is on ice, and then ... things start to unravel. Sometimes a team regains its composure, sometimes it chokes. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Prechter |
|
|
Traders who want to be successful must believe that they are responsible for the outcomes of their trades – both losers and winners, says Bob Prechter. They particularly have to learn how to deal with losses, since losses are part of the trading terrain. You've got to be able to take it on the chin and get up to trade again. Here is his advice for the next two secrets of becoming a successful trader, from his own book, Prechter's Perspective. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Prechter |
|
|
When a baseball player in his late 30s hits the ball harder and more often than he did in his mid-20s, none of us believes that's "normal." The latest news about Barry Bonds' alleged steroid use strongly suggests that it helped pump up his unprecedented hitting statistics since 1999. Sports Illustrated just published the new evidence from a book written by two San Francisco Chronicle reporters. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Prechter |
|
|
At 47 years old, Julio Franco is the oldest player in major league baseball by more than four years. He broke into the majors in 1982 ? one year before Carl Yastrzemski retired. That's what you call "experience." |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Prechter |
|
|
This was the week that was ? Alan Greenspan stepped down from his chairmanship of the Federal Reserve and was replaced by Ben Bernanke. The earth did not stop spinning, nor did the markets crash (yet). But unlike most commentators who think that Bernanke has what it takes to keep U.S. monetary policy and the economy on an even keel, Bob Prechter sees problems for the captain of this ship of state. Here's an excerpt from Bob's November Elliott Wave Theorist: |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Prechter |
|
|
Jack Welch, the former CEO of General Electric, is known far and wide as a brilliant business executive. But the recent issue of Barron's reveals that some of his apparent success may have been due to other factors: |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Prechter |
|
|
It helps to have a sense of history when studying the behavior of human beings, the economy, and financial markets ? particularly since human behavior is what makes markets trend in one direction or another. In last month's Elliott Wave Theorist, Bob Prechter wrote about how current events in our time resemble a time 37 years ago when a war was on and riots were raging, yet the economy and the markets were expanding. Here is his discussion of what kind of market ignores bad news. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Prechter |
|
|
Those who study the Wave Principle and use it for trading appreciate all it can do to provide a framework for making trading decisions ? notwithstanding the fear and trepidation or other emotions that come out when trading. Learning how to use the Wave Principle in all its rich complexity can be so satisfying, but sometimes it's fun to read the condensed version. In this excerpt from Bob Prechter's question-and-answer book, Prechter's Perspective, he explains in short, easy-to-understand answers exactly what the Wave Principle is. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Prechter |
|
|
It's not necessary to visit a cattle ranch to find herding behavior. Consider this report from today's news: 'Two of America's allies in Iraq are withdrawing forces this month and a half-dozen others are debating possible pullouts or reductions, increasing pressure on Washington as calls mount to bring home U.S. troops.' (Associated Press, December 1, 2005) |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Prechter |
|
|
When markets go against a trader, it's so often easy to believe that it's 'a conspiracy': professional traders do better, because they have better information to trade on. Even though Bob Prechter doesn't believe in this conspiracy theory, he does believe that professionals have an advantage. Here's an excerpt from his question-and-answer book, called Prechter's Perspective, which describes what it is. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Prechter |
|
|
Ben Bernanke's confirmation hearings are on tap on Capitol Hill. With near certainty that he will be confirmed to replace Alan Greenspan as the Federal Reserve chairman, our minds turn to what powers the Fed really has. Here's an excerpt from Bob Prechter's question-and-answer book, called Prechter's Perspective, that describes how the Fed actually follows the markets rather than leading them. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Prechter |
|
|
Has the house down the street from yours just sold for a bundle more than you ever imagined houses in your neighborhood would sell for? You might find yourself scratching your head at the amazing fact that some folks will pay much more than what a house ? or a stock ? may be worth. |
|
Read more...
|
|
|
General Investing Articles |
Written by John Mauldin |
|
|
The King is going. Long live the King. We now know that Ben Bernanke will be the next Fed Chairman. His approval by the Senate is as close to a lock as you can get. This week we focus on Bernanke, and specifically his most famous, and what I think one of the most important speeches ever by a Fed governor. We will look at how policies might change, the risks involved. Bernanke faces some very real challenges. We should all wish him well. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Prechter |
|
|
Some things never go out of style, including good interviews. Let's look back one year in time to Bob Prechter's Theorist of October 2004. In it, he published an interesting interview he did with Chris Oliver, the Money Editor of The South China Post. Here's an excerpt: |
|
Read more...
|
|
|
General Investing Articles |
Written by John Mauldin |
|
|
Last year, as the Fed first began to raise rates, I made two observations. If the Fed does what they almost always do, they will raise rates higher and go longer than anyone at the beginning to the cycle believed. Secondly, I suggested that the Fed would like to see a little inflation come back, as well as significantly higher interest rates, before they have to deal with the next recession or slowdown. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Prechter |
|
|
The back-to-back, 100-point swing in the Dow this week shows how much the markets are driven by human psychology. Humans behave in certain ways, and these behaviors are patterned. In the case of financial markets, these patterns are perfectly recorded for all to see in a price chart. Anybody can see these patterns of behavior if they know what to look for. In the beginning, Bob Prechter tried many forms of technical analysis before he struck on the Elliott Wave Principle, because he could see the patterns. For anyone interested in why it sparked him intellectually, here's an excerpt from his question-and-answer book, called Prechter's Perspective. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Prechter |
|
|
The threat of avian flu has moved from the back burner to the front burner. Last week, we learned that U.S. scientists had recreated the virus that caused the Spanish flu epidemic that killed more than 40 million people in 1918 and 1919. The bad news is that this lethal Spanish flu virus seems to have also originated as a bird virus. And this week comes the news that birds in Turkey have been found to harbor the HN51 strain of bird flu, the strain that has jumped to humans in Asia. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Prechter |
|
|
October begins major league baseball's playoffs, an annual reminder that those ballplayers and teams who make it this far share two common traits: discipline and coolness under pressure. The John Smoltzes of the world (star pitcher for the Atlanta Braves) didn't make it with a casual attitude about work. Smoltz had the discipline to pitch successfully in the major leagues for 14 years, and the mental toughness to win the post-season games that count -- as he did on national television Thursday night against the Houston Astros. Traders and investors may not perform in public, but they still need to possess discipline and mental toughness to succeed. In this excerpt from Bob Prechter's question-and-answer book, Prechter's Perspective, he talks about the qualities of a successful investor. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Prechter |
|
|
During a week when the CEO and CFO of the Bayou Management hedge fund came out of hiding to plead guilty to charges of conspiracy in misrepresenting their hedge fund's performance since 1997, it's only fitting to look at the role that hedge funds play in the markets. Similarly, in a week when sales of existing homes rose to their second-highest level on record and prices zipped up to a record median of $220,000, it's also fitting to look at how much longer this behavior can persist. Bob Prechter addresses both of these hot topics in his recent August 24, 2005, Elliott Wave Theorist. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Prechter |
|
|
As stock markets reach a peak, they start to lose momentum ? something that the residents of Texas and Louisiana wish Hurricane Rita would exhibit. What hurricanes often do instead is build momentum after they cross an island and then move back over water. Just as meteorologists can use instruments to measure the changing strength of an approaching hurricane, traders can use Elliott wave analysis to take the measure of waxing and waning markets. And one of the best uses for the Wave Principle is to identify when a bull market is topping. In this excerpt from Bob Prechter's question-and-answer book, Prechter's Perspective, he talks about bull markets of the past. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Prechter |
|
|
The Federal Reserve is contemplating how to respond to the economic impact of Hurricane Katrina. Will it continue to raise short-term interest rates or will it hold off at its next Federal Open Market Committee meeting on September 20? Many people tend to think that the Fed can 'manage' the economy, and, in this case, the economic effect of a hurricane. But looked at from the perspective of socionomics, they might more reasonably ask, What will the response to Katrina do to the Fed's reputation? In this excerpt from?The Wave Principle of Human Social Behavior, Bob Prechter writes about how the main premise of socionomics turns the usual thinking process about markets and events inside out. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Prechter |
|
|
As more and more warning headlines about the housing bubble are popping up, even Fed Chairman Alan Greenspan felt compelled to address it last week. He pointed out that?'history has not dealt kindly with the aftermath of protracted periods of low-risk premiums.' Which, translated, means: Watch out. When mortgage rates go up and home prices stop increasing, it's going to be a killer for people who have overextended themselves and bought real estate they could not normally afford. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Prechter |
|
|
Off-color language crops up in TV shows and movies more frequently nowadays than it did 10 or even five years ago. And four-letter words you would never have heard uttered publicly in the 1950s and '60s have become more common in everyday language. Yet a word that doesn't sound filthy or disgusting to the ear is still the one word that shouldn't be uttered by traders or investors. Read this question-and-answer excerpt from Prechter's Perspective to find out what it is. Along the way, you'll also learn how Bob Prechter got started with technical analysis. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Prechter |
|
|
One of the main jobs of the Federal Reserve is to keep inflation in check. And recent news on the inflation front (up 0.5% overall in July; up 0.1%, excluding energy and food) suggests that the Fed can claim to be doing its job. But the biggest unspoken worry for the Fed isn't how high prices can inflate but rather the kind of economic havoc that occurs when prices go in the opposite direction. To put it in Fed-ese: deflation is a difficult policy scenario ? not to mention a difficult time for people living through a deflationary period. In this question-and-answer excerpt from Prechter's Perspective, Bob Prechter talks about why the Fed will find that its next big fight will be with deflation, not inflation. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Prechter |
|
|
Once you've seen what others can do with the Elliott Wave Principle, the usual next step is to discover what it's like to use it yourself when trading financial markets. In this excerpt from Prechter's Perspective (the useful and interesting book of questions the media have asked Bob Prechter over the years), Bob explains how it takes both a scientific and an artistic mind to grasp the concept and to use it. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Prechter |
|
|
If the pace of sales of previously owned homes in the United States hit a new record last month, does that mean people will keep paying more for them? Depends on whether you view a house as a financial investment or a consumable product. Generally speaking, when supply of a certain item goes up, the price comes down. But not so with houses, it seems. The National Association of Realtors reported that previously owned homes sales climbed 2.7% in June, as the prices for these homes zoomed up 14.7% from a year ago. The trade group said that this increase was the largest jump in nearly 25 years. In addition, the national median home price rose to $219,000, up from $191,000 a year ago. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Prechter |
|
|
Movers and shakers in the stock market on Friday, June 10, included Polo Ralph Lauren (up 6.5%), Intel (down 2.7%), and General Motors (up 7.7%). Could using the Wave Principle with the charts of these individual stocks have helped a trader ride them up or down? Maybe, but take care. There's a good reason why the Wave Principle does better with market indexes than with individual stocks. But there's still a good reason to use the Wave Principle with individual stocks. Bob Prechter explains why in this excerpt from the 2004 edition of his book, Prechter's Perspective. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Folsom |
|
|
It's been less than a month since the proposed fiscal year 2006 Federal budget was in the news. If you can barely recall the story -- or don't remember it at all -- that tells you have fast the news coverage came and went, which must have been a relief for the politicians. Their worst fear should be that taxpayers would look long enough to find the countless examples of the absurd and outrageous in the small print. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Folsom |
|
|
The most recent GDP figures seem to echo what Fed Chairman Greenspan said in February in his semiannual Monetary Policy Report to the Congress. For brevity's sake I'll condense his opinion about the U.S. economy into three words: All is well. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Folsom |
|
|
The notion of a "coming oil shortage" has been around for decades. I remember the lines at the gas pumps in 1973-74 all too clearly, because I had just gotten my driver's license. The economic wise men of the time made dire predictions. If they had been right, the world's oil supply would have been long gone by now. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Folsom |
|
|
Many people study U.S. political history, others study U.S. economic history, and a relative few individuals look closely enough at both to see the strong connection -- specifically, the link between the performance of the stock market and the fortunes of the president. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Folsom |
|
|
The Federal Reserve keeps thorough records of U.S. consumer credit, and most of the data goes back 30 years or longer. They put it all on the Internet, too. Scroll through the numbers, and before long you'll have what amounts to a crash course in how rapidly the debt levels have grown during just one generation. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Folsom |
|
|
"People should have control over their own retirement funds." This simple idea should get vigorous nods from anyone who believes in individual autonomy and personal responsibility. |
|
Read more...
|
|
|
General Investing Articles |
Written by Robert Folsom |
|
|
Homeowners are "pulling money out of their property at a greater rate than ever," and now that the toothpaste is out of the tube, someone thinks somebody needs to do something. "The consequences of this problem can be so devastating," said an NASD official, "that we'd really like to address this to keep it from becoming a big problem." |
|
Read more...
|
|
