Hirsch - The Little Book of Stock Market Cycles

Contents

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Copyright 2012 by Jeffrey Hirsch. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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ISBN 978-1-118-27011-0 (cloth); 978-1-18-28349-3 (ebk); 978-1-118-28485-8 (ebk); 978-1-118-28624-1 (ebk)

For Jennifer and our two boys, Samson and Nathaniel

Foreword

It might seem odd that a fundamentally oriented investor would write the Foreword for a book devoted to technical analysis. After all, many fundamental investors view technical analysis as nothing more than fortune-telling, and technical analysts as wizards who should be locked up and kept away from the children (and investors/traders who behave like children). But here I am, a fundamental investor, doing just that.

The fact is that the business of investing is complicated. Think of it as a pyramid with each angle of the pyramid representing a different approachyouve got the fundamentals, valuation, and the technicals.

It is the influence on equities called the technicals that Jeff Hirsch captures so eloquently and succinctly in The Little Book of Stock Market Cycles.

Jeffs thoughtful book takes a cue from Winston Churchill, who once wrote that the farther back you can look, the farther forward you are likely to see.

As Jeff writes, the lessons of stock market history are invaluable. The study of patterns from the past makes future trends clearer, just as the avoidance of history makes them potentially lethal to your investments well-being.

Mr. Market is not an easy guy to get to know. Analysis of market history and the rhythm of financial cycles isnt a simple task, and especially not the way Jeff does it. Determining the roles that human behavior, holidays, elections, seasons, and the calendar play in influencing the stock markets direction requires careful observation and critical thinking. Even the role of peace and war is fair game in Jeffs analysis.

And then there is Jeffs outlandish May 2010 prophesy of a super boom in stocksin which he feels the Dow Jones Industrial Average may rise to 38,820 by 2025!

Learn why Jeff is ringing in a new bull market beginning in the 20172018 period. His conviction is high and his reasoning appears sound.

In The Little Book of Stock Market Cycles , Jeff presents a commonsense message and invaluable lessons for how to take advantage of time-proven market patterns. Both individual and institutional investors should take notice.

After all, those who cannot remember the past are condemned to repeat it!

Douglas A. Kass

Seabreeze Partners Management Inc.

Introduction

There is no magic formula to make trading or investing easy. Nothing can replace research, experience, and a healthy dose of luck. There is, however, a methodology investors can employ to mitigate losses and enhance returns. Nineteenth century philosopher George Santayana once pronounced that Those who cannot remember the past are condemned to repeat it.

This is the cornerstone of my research for the Stock Traders Almanac , which was founded by my father Yale Hirsch in 1966. By analyzing and studying the markets from a historical perspective, modern-day market action and events can be put into historical context. Whether you are a short-term trader or a longer term investor, being aware of historical and seasonal patterns and tendencies is helpful and valuable.