Buy the Rumor, Sell the Fact: 85 Maxims of Investing and by Michael Maiello

By Michael Maiello

The conventional ideas of Wall Street--what's correct, what is wrong, and the way traders can distinguish among the 2

Buy on Monday, promote on Friday". . . "Don't seize falling knives". . . "The development is your friend". . .

These maxims are a part of the gospel of Wall highway, repeated so usually that, to many, they're past query. regrettably, they are often wrong--and investors who blindly persist with them can get burned. purchase the Rumor, promote the actual fact examines eighty five of those "insights" to bare the which means in the back of each one, realize its actual help or lack thereof, and propose traders on which to keep on with and which to only undeniable forget about. Devoting to 4 pages to every maxim, this important e-book examines:

  • Maxims that appear to contradict every one other--and why either types might usually be right
  • Perilous adages which may work--but nevertheless, won't
  • The proposal, tradition, and influence of modern day Wall road

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Extra info for Buy the Rumor, Sell the Fact: 85 Maxims of Investing and What They Really Mean

Example text

Again, the great trader would argue that there’s no way they’d have missed all 40 of those great months, but why risk missing any of them? Buy­and­hold investing is just plain easier than market timing.  Keep in mind what Wharton Professor Jeremy Siegel proved in his 1994 book, Investing for the Long Haul: Stocks have historically provided positive returns over 20 years. ) But what they advocate as an alternative isn’t market timing but a fundamental approach to deciding whether or not the stock market is overvalued.

The stock market tends to offer 6 to 8 percent. ) Money might well flow out of stocks and into Treasuries, causing further price declines in stocks.  That’s the logic, anyway. The data is entirely inconclusive.  They didn’t begin to diverge until well into the second quarter of 2003, and we have no idea whether or not that divergence will continue.  After that, we began to develop markets where both stocks and bonds can rally together. ” Knowing which asset class is driving the market is extremely difficult for the average investor, although bond gurus like PIMCO’s Bill Gross can usually offer a clue in public comments.

Slope of Hope money represents cash being tossed into a market with bad funda­ mentals. But investors who do so aren’t necessarily suckers.  By August, it had rallied back to 966 but by October it had fallen to 776. Investors with short­time horizons might well have found their wealth obliterated during those months. More patient investors, however, might well look at the money not as having been destroyed but temporarily sidelined.  If they are able to hang on, they will experience more upside from the inevitable true recovery.

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