"Stocks drifted lower during January and February as concerns about a credit crunch, real estate, subprime mortgages, and other issues mounted...troubles that seemed confined to relatively small financial firms mostly tied to mortgage origination began spreading to larger firms. Rising default rates, the impact of market-to-market accounting rules (derived from the recently implemented FAS 157), and tightening credit conditions for select firms brought the health of some of the biggest investment and commercial banks into question. The first US firm of meaningful size to run into trouble was Bear Stearns-then the fifth-largest independent investment bank in the US. In March, Bear Stearns was on the brink and was sold to JP Morgan Chase in a last-minute, late night deal negotiated by the Fed and Treasury...Like Bear Stearns, conditions were weighing on investment bank Lehman Brothers. But rather than negotiating a deal to marry Lehman with a healthy firm, Lehman went bankrupt-with no last minute deal making by the Fed or Treasury. Concerns other firms might suffer a similar fate, and confused why there was no last-minute intercession as there had been for Bear Stearns, investors truly panicked and began fleeing credit markets...and US insurance giant AIG was the next panic victim."

- from Chapter 25, THE UNBUBBLE
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

"2008 was the worst year for US and global stocks since 1931-and a year by Ken’s admission he was terribly wrong all year long. In 2008, the S&P 500 lost 37.0%, and global stocks dropped 40.3%1-terrible by any standard."

- from Chapter 25, THE UNBUBBLE
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

1. Global Financial Data.

"Because stocks are so cheap, a big bull market will emerge. I don't know when."

- excerpt from "Media Mayhem" December 22, 2008

"Sometime soon, and maybe now, we will have the definitive end of the 2008 crash. The stocks that rise the most in the initial stage of a recovery will usually be those from the sectors that got beaten up the most in the decline and have a speculative quality to them. Companies in this group include energy, basic materials, industrials and consumer discretionary."

- excerpt from "Pessimism and the Rebound " November 24, 2008

"Most investors need their investments to last them a long, long time, yet they're acting like the next few months are everything. The shadow of death is an illusion. In the long term equities always do well. They will now, too, even if they fall further first."

- excerpt from "Stocks to Survive On" October 27, 2008

"What's the word for an unbubble? Maybe "cavitation" will do, if you're a hydraulic engineer. I'm talking about the opposite of a speculative bubble: the absence of interest in owning stocks, a vacuum of optimism, a black hole of negativism. People are irrationally depressed, and their depression feeds more depression."

- excerpt from "The Unbubble" September 29, 2008

"The stock market's drop since last November is enough to qualify it as a bear market. I'm not sure there is a meaningful distinction between being down 19% and being down 22%, but 20% is the normal definitional cutoff, and the big indexes have pretty much all pierced 20%. Wrongly, I've been upbeat throughout."

- excerpt from "Five Blue Chips" September 1, 2008

"On a recent round of New York media interviews, I encountered two almost unanimous views: that the Fed would hike rates later this year, and that Barack Obama would be elected President. Both events are viewed as all but certain, and as all but certain to do great damage to the stock market. Put aside your fears. The market will recover."

- excerpt from "Don’t Fret About the Fed" July 21, 2008

"Now that we've had a full-fledged correction that scared the dickens out of everyone, stocks look wonderful. But I've said all that in recent columns. I particularly love megacap stocks-those, by my definition, with market capitalizations of more than $80 billion..."

- excerpt from "A Stock for Eco-Nuts" June 16, 2008

"I get the sense, talking to investors, that a lot of you are terrified of what an Obama presidency would do to your portfolio. You shouldn't be. Election outcomes don't affect markets the way you expect them to."

- excerpt from "Bully for Obama" May 19, 2008

"An old saw says, "You should be fearful when others are greedy and greedy when others are fearful." Clearly folks are fearful now. So you should be greedy."

- excerpt from "Dear Abby" April 21, 2008

"If you believe the popular economic myths of the day, you think there's a credit squeeze-less total credit available. This is nonsense. There's indeed less credit available to poor risks, individual and corporate. But that just means there's more for the good borrowers."

- excerpt from "Crunch Mythology" March 24, 2008

"This year January started rough. So what? Despite folklore, history shows January market movements foretell nothing about the rest of the year."

- excerpt from "1998 Redux" February 25, 2008

"I'm still bullish. Why? The larger non-U.S. economy is doing great. America isn't doing badly. In each quarter we get a gross domestic product stronger than expected, followed by new expectations of terrible results for the next quarter. This is basically bullish. We aren't likely to get much gloomier."

- excerpt from "We’re Too Gloomy " January 28, 2008

"Democrats controlled Congress but not by a wide enough margin to override a veto from the Republican White House. The resulting stalemate meant little risk of big legislation...Talk of a credit crunch was also widespread. Credit had tightened by some measures, but borrowing rates were actually lower for highly rated firms by yearend than they had been when the year started. Housing was another concern, but in 2007 national housing prices were only slightly off their 2006 peak with most of the price declines unsurprisingly concentrated in markets that had previously been hottest...In November 2007, a seemingly innocuous account rule was put in place that would end up having a much bigger impact than anticipated. Statements of Financial Accounting Standards No. 157 (aka FAS 157) required financial firms to utilize mark-to-market accounting to value their assets, or the value they could fetch in an immediate sales. Mark-to-market accounting works great in liquid markets like those for stocks or US Treasuries, but it becomes problematic when applied to the illiquid assets on banks balances sheets, as investors would unfortunately learn in 2008."

- from Chapter 24, ANOTHER BROKEN RECORD
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

"Stocks moved higher in choppy action in 2007, suffering two steep pullbacks through August. But two months later in October, both the S&P 500 and MSCI World Index reached all-time highs. Stocks then retreated in the final months of the year, bringing 2007 returns for the MSCI World Index and the S&P 500 to 9.6% and 5.5%1-barely shy of Ken's forecasted range."

- from Chapter 24, ANOTHER BROKEN RECORD
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

1. Global Financial Data.

"I'll keep buying stocks until we hear multiple pundits say we are entering a new period of high returns. That will be a time to sell. When will this happen, that the consensus will turn almost uniformly bullish? I don't know, but I doubt it will be before 2009 starts. Hence, I'm expecting another above-average year ahead, an easy one."

- excerpt from "Another New Era" December 10, 2007

"I expect the flow of capital out of Japan to continue, and I remain very bullish about non-Japanese stocks. Right now you should be particularly heavy in emerging markets, in Germany, in energy, industrials and materials. But a smart investor hedges his bets. To hedge against the possibility that yen carry trades reverse, you should also have money in Japanese stocks."

- excerpt from "Put Some Money in Japan" November 12, 2007

"It took just one lightning-quick month, beginning in mid-July, for the popular consensus to go from optimism to pessimism. A rapid switch like that never happens around market tops, only corrections. The bears are wrong."

- excerpt from "Credit Goblins" October 15, 2007

"When the rally resumes, Asia will lead. These stocks are to this market what tech stocks were to the mid-1990s."

- excerpt from "The Fall 2007 Rally" September 17, 2007

"I learned from reading Joe not to precall market peaks-those who do are often run over. There is always plenty of time to get out."

- excerpt from "The First and the Best" August 13, 2007

"Here's a good reason for believing that the bull market will continue: Journalists don't think it will."

- excerpt from "The Media Monitor" July 2, 2007

"Here's one more reason to remain bullish in 2007 and into 2008: We've got a do-nothing Congress. Stalemated legislators are good for the market."

- excerpt from "Thanks for Not Legislating" June 4, 2007

"The acceleration in buyouts and buybacks will keep creating a booming world stock market by shrinking the supply of equity while boosting earnings per share."

- excerpt from "Never Before!" May 7, 2007

"When I say that Americans are productive savers, I mean that we don't stuff money under mattresses and hide gold in the vegetable garden. The savings are matched with investment in PCs and power lines, delivery trucks and drug patents-things that give rise to increased economic output."

- excerpt from "Don't Worry" April 16, 2007

"Four and a half years and still going strong. The bull market that began in late 2002 is far from over. Pessimists will tell you that the good times have to stop, that after four years the market just has to be due for a correction."

- excerpt from "Takeover Targets " March 26, 2007

"Not since the late 1950s have sustained fundamentals (low long-term interest rates and low price/earnings ratios) so strongly favored corporations shrinking equity."

- excerpt from "Housing Boom!" February 26, 2007

"I'm starting to sound like a broken record. My 2007 forecast is for the global stock market, as measured by the Morgan Stanley World Index, to be up somewhere between 10% and 40%, while the S&P 500 will up but by a lesser amount."

- excerpt from "A Broken Record" January 29, 2007

"2006 was a difficult year...for celebrities. That was good news to Ken. It's not that Ken has any ill will toward the likes of Paul McCartney (divorced from Heather Mills in 2006), Whitney Houston (filed for divorce from Bobby Brown), Paris Hilton (arrested for DUI), Steve "Crocodile Hunter" Irwin (killed by a stingray), or Wesley Snipes (indicted on tax fraud charges). But the fact these were the stories making endless headlines in 2006 was a bullish sign for investors...In September, a coup in Thailand ousted then Prime Minister Thaksin Shinawatra. Just a month later, North Korea revealed it developed and tested a nuclear device. "

- from Chapter 23, CELBRITY MARKET INDICATORS
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

"After starting the year strong-the S&P 500 was up nearly 7% by early May1-a stock market pullback was sparked at least partially by a cocktail party conversation between newly appointed Federal Reserve Chairman Ben Bernanke and financial news anchor Maria ("Money Honey") Bartiromo.... Days later, a stock market slide began that saw the S&P 500 lose 7.5% in just over a month.2 Global stocks suffered even more, falling 11.5% over the same period...From mid-June through yearend, the S&P 500 shot up over 17%, and global stocks gained over 19%, finishing the year up 15.8% and 20.7%, respectively.2 "

- from Chapter 23, CELBRITY MARKET INDICATORS
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

1. Global Financial Data.
2. See note 1.

"Since this rally is getting a little old (it started in March 2003), 2007 may be the year that scrapes the bottom of the quality barrel. Turkeys will fly. This will be a change from recent years, when the trend favored quality value…"

- excerpt from "When Turkeys Fly" December 11, 2006

"Could we have a big bear market now? I don't think so. Bear markets come from a combination of positive sentiment with bad surprises virtually no one anticipates (like the 1973 oil crisis). Today too many gloomsters and not that many big-time boomsters (like me) are around for this combination to occur.."

- excerpt from "The Rangel Factor " November 13, 2006

"We are only three months away from the third year of George Bush's term. In the entire history of the S&P 500 there have been only two negative third years of any President's term."

- excerpt from "Fear Will Fade" October 16, 2006

"Nowadays the stock market has lots of political fear priced into it. Shrug off the fear and buy. You'll find stocks a little cheaper than they should be."

- excerpt from "The November Surprise" September 18, 2006

"There are corrections, and there are bear markets. What we're experiencing right now is a correction. Know the difference."

- excerpt from "The Short, Sharp Stock" August 14, 2006

"Today we have the Internet to bombard us with more news than ever. Still, it is bullish that the most exciting headlines have to do with Angelina Jolie's baby and Barry Bonds' home runs. There is again nothing to hurt stocks."

- excerpt from "No News Is Good News" July 3, 2006

"Even if you don't invest globally (which you should do, particularly this year) you will always be a better U.S. investor if you think globally."

- excerpt from "Surviving Rate Rises" June 5, 2006

"Whenever the whole world stock market has gotten off to a good start, there has always been more good news for the remaining nine months of the year."

- excerpt from "Feel the Force" May 8, 2006

"I remain bullish and believe that buying pressure will continue from companies using their excess cash and low aftertax borrowing costs to either acquire competitors or shrink their own capitalizations in buybacks."

- excerpt from "Lessons From Lurie" April 17, 2006

"This is a great time to have part of your portfolio in the shares of takeover candidates...Just find stocks that could be taken over profitably and that you would be content to own even if they aren’t taken over. If they’re acquired, you win, and if they aren’t, you don’t lose."

- excerpt from "Take My Stock, Please" March 27, 2006

"This should be another good year in the stock market. Maybe it will be a great one."

- excerpt from "A Replay of 1995?" February 27, 2006

"What's wrong with funds? Start with performance. Over the long term the average fund in pretty much every category has fallen short of the S&P 500 index or whatever other benchmark is relevant."

- excerpt from "I Still Hate Funds" January 30, 2006

"Politics were in full swing in 2005. Not so much here in the US as abroad. We inaugurated President George W. Bush for his second term, but bigger change was happening overseas. In Japan, the world’s second largest economy after the US, Prime Minister Junichiro Koizumi dissolved the lower house of parliament after a measure to privatize Japan’s postal system (which serves as a post office, life insurer, and the world’s largest bank by assets) was voted down in Japan’s upper house. In the general election that followed, Koizumi's Liberal Democratic Party (LDP) won an overwhelming majority, gaining enough seats to override the upper house's vote. This referendum was seen by many as an important step in initiating much-needed pro-growth economic reforms in Japan (many of which have unfortunately not materialized). The LDP maintained its supermajority in the upper house until 2009. In Germany, then the third largest economy (China surpassed Germany in terms of economic size in 2009), Angela Merkel-also seen as a pro-economic growth reformer-unseated Gerhard Schröder to become the new Chancellor. Back in the US, Hurricane Katrina tore through the Gulf Coast region, devastating much of New Orleans."

- from Chapter 22, GIVING IT TIME
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

"The S&P 500 bounced around for months and was slightly negative in late October. But stocks rallied in November and December, and the S&P 500 finished 2005 up 4.9%1-a positive year though not much to write home about. Global stocks did a bit better, rising 10.0% led by Japan.2 After years of poor returns, Japanese shares surged in 2005."

- from Chapter 22, GIVING IT TIME
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

1. Global Financial Data.
2. Ibid.

"What would the S&P 500 be trading at if we had complete confidence in corporations' audited numbers? A lot higher than 1,300. Post-Enron, post-WorldCom, a pall of uncertainty envelops financial statements. There's what you might call the murkiness discount...That isn't bad enough by itself to trigger a bear market. But this makes the stock market worth less than it otherwise would be."

- excerpt from "The Integrity Premium " December 26, 2005

"If you are spooked by the recent increase in interest rates, or if you aren't sure what to make of Federal Reserve chairman nominee Ben S. Bernanke, you might be holding back from new commitments to the stock market. Rising rates kill stocks, don't they? ...Stop fretting. Plenty of stocks are cheap enough to buy..."

- excerpt from "Buy That Earnings Yield" November 28, 2005

"What do you believe is true that's actually wrong? If you are captivated by some market myth, other investors probably are, too. Figure out what that popular but wrongheaded belief is and you can disassociate yourself from it. You can bet against it."

- excerpt from "Three Questions That Count" October 17, 2005

"I've been in this space for 21 years but have never seen the need to say the obvious, which is that an annuity is just a mutual fund dressed up with some punitively stiff fees. (I am talking only about the most common form of annuity-the deferred annuity sold as an investment account.)"

- excerpt from "You Bought a What?!" September 19, 2005

"Have you allowed yourself to be scared out of the stock market by high oil prices? If you have, you’re making a big mistake. You are falling prey to a media myth...It is routine now to see stories blaming a drop in stock prices on a rise in oil prices. Don’t believe these stories. There’s no connection between the two."

- excerpt from "Stop Fretting About Oil" August 15, 2005

"Focus your investing now on stocks that are likely to be bought, either in takeovers or in buybacks. The surest bets are companies with desirable strategic attributes for an acquirer, like high market share, low-cost production, regional dominance or brand name strength."

- excerpt from "Do Your Own M&A" June 6, 2005

"Maybe I was wrong. Maybe the stock market won't be up a lot in 2005. The year sure hasn't started robustly. It's always possible to be wrong. What do you do when your plans go awry? ...The key is this: You should sell stocks only if you foresee trouble that other people don't foresee; don't sell in fear of trouble that everyone else is already anticipating. The only reason for a defensive posture, in other words, is perceiving risks that are little noticed. I can't find many."

- excerpt from "The Wall of Worry" May 9, 2005

"Real bubbles are never commonly referred to as bubbles in the press until after they've burst...The sign of a real, honest-to-God bubble is an entirely different kind of public discussion, one in which there is talk of a "new paradigm," or words to that effect."

- excerpt from "Bubblenomics" May 5, 2005

"Here's another reason to be bullish: everyone is worried sick that America is overindebted, but it's not. This country could profitably take on more loans from abroad and invest the money in productive assets. We're underindebted."

- excerpt from "Surprise-America Owes Too Little" April 18, 2005

"Over the last three years the U.S. trade deficit came to a cumulative 13% of GDP, identical to Britain's. Britain's three-year total is identical at 13%. So why is sterling so much stronger than the dollar? Do trade deficits lead to a weak economy? No, just the opposite..."

- excerpt from "End Your Gloom" March 28, 2005

"Now, the first year of a President's term has almost always been sort of 50-50, either negative or up a lot-nothing in between. Since I don't expect a negative year, I expect the market to go up a lot."

- excerpt from "It’s a Beautiful World" February 28, 2005

"Now I expect to be blessed in 2005 with what I didn't get in 2004. I'll stick my neck out and predict a better than 25% gain in 2005 for both the S&P 500 and the Morgan Stanley World Index…"

- excerpt from "Give It Time" January 31, 2005

"In March in one of the deadliest terrorist attacks since September 11, 2001, explosives planted on commuter trains in Madrid, Spain killed 191. In December, a tsunami in Southeast Asia was far more destructive, resulting in approximately 230,000 casualties."

- from Chapter 21, IF
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

"A market pullback began in early March. It was shallow with the S&P 500 falling only about 8%.1 But it was long, extending well into August. Stocks finished the year strong, but not enough to reach Ken's 20% target. For the year, the Morgan Stanley World Index gained 15.2%, and the S&P 500 did a little worse, rising 10.9%.2"

- from Chapter 21, IF
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

1. Global Financial Data.
2. Ibid.

"One reason I'm bullish is that the federal budget deficit is so high. Yes, you heard that right...the historical pattern is unmistakable: When the federal deficit (as a percentage of gross domestic product) spikes, stocks do well in the intermediate term."

- excerpt from "Pray for Deficits" December 27, 2004

"What's the significance of Bush's victory? The last century demonstrates exceptional variability of returns in the year after Presidents have been reelected. The negative years span from negative 35% to negative 10.8% in 1957. The lowest positive year was 12.5% in 1965. There was no middle ground between."

- excerpt from "The Coming Melt-Up" November 29, 2004

"Earnings yields at or above bond yields are exceptional. When you see that inversion of the normal relationship, you probably should be buying stocks. Which means you should buy now."

- excerpt from "When Earnings Are Cheap" November 1, 2004

"One reason this stock market is so spiffy is that journalists are so dour on it. They reflect and, in fact, promote low investor sentiment. The setting is perfect for a nice rebound."

- excerpt from "Those Bearish Brits" October 4, 2004

"Unless I think I see big, bad things others don't see, I can't justify a down-a-lot forecast, since the market is a discounter of all known information. That means that bad stuff we already know (war, deficits, you name it) is already priced into stocks, so you gain nothing by selling. That fact helps explain why I almost always own stocks."

- excerpt from "Stocks for an Iffy Investor" September 6, 2004

"Virtually everyone expects interest rates to skyrocket. I've explained before...why that outcome is unlikely. If I'm right that rate increases will be modest, midsize banks will be conspicuous beneficiaries."

- excerpt from "Value Made Easy" July 26, 2004

"While 2004's stock market has started off bleakly, abundant reason exists for optimism here and now. Stand your ground. Buy stocks. Historical patterns strongly lean toward the likelihood that 2004 will end with a gain for the stock market."

- excerpt from "Road Map 2004" June 21, 2004

"Now here's another reason for a bullish view: Interest rates should also be more benign than what's expected in the consensus view."

- excerpt from "The Benign-Rate Scenario" May 24, 2004

"In your bones believe in capitalism and its basic ability, despite recessions and scandals, to better the human condition. From that belief you can conclude that, over the long term, the stock market works."

- excerpt from "Philip A. Fisher, 1907-2004" April 26, 2004

"There is no right way to make long-term market forecasts, as opposed to guesses. Those who say they "know" where stocks will be in 2014 are telling you more about what they don't know than what they do."

- excerpt from "My WAG Model" April 12, 2004

"There is more to favor a Bush win. He's in the majority party. He has an overwhelming campaign fundraising advantage. Our economy is now too strong to throw out an incumbent. Bush defines the Democrat more than vice versa. It's a cakewalk, becoming clear by November. By then you will see higher prices on stocks."

- excerpt from "Bush’s Bull Market" March 15, 2004

"...I noted that consensus expectations foresaw pension-plan underfunding as hurting earnings and stocks. My contrarian take was that this was all bullish. I argued that pension sponsors' putting cash into underfunded plans would provide a boost for the market. I mentioned General Motors. By year-end no scourge from pensions had developed to blight stocks, and GM's plan was fully funded."

- excerpt from "A Lucky Year" February 15, 2004

"How long should this bull market last? Until the last bear cries uncle. I'm waiting for most of the big-name investors who were pound-the-table bearish as 2003 began to either capitulate or be publicly ridiculed. That hasn't happened yet."

- excerpt from "The Great Humiliator" January 12, 2004

Iraq war, "2003 was also the third year of President Bush's first term-historically an overwhelmingly positive period in the presidential cycle for stocks as Ken has noted in a number of his columns over the decades. The reason stocks do well in third years is grounded in behavioral finance, a growing field Ken has helped pioneer."

- from Chapter 20, BUY ON THE CANNONS
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

"The S&P 500 nearly retested the bear market bottom in March 2003-a low point that coincided almost perfectly with the beginning of the Iraq War. From the day the Iraq invasion began, March 20, 2003, through the end of the year, the S&P 500 skyrocketed nearly 29%...Global stocks were up even more, rising 33.8%.1"

- from Chapter 20, BUY ON THE CANNONS
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

1. Ibid.

"I see a silver lining in the cloud over the mutual fund business. Indeed, the after-hours-trading scandal is bullish."

- excerpt from "A Three-Year Bull Market" December 8, 2003

"Small up moves aren't worth worrying about; they are background music in a long-term trend that has stocks rising in two years out of three. Small down moves aren't worth being defensive against, because the transaction costs of moving in and out are much bigger than people think ..."

- excerpt from "Don’t Sweat Small Moves" November 10, 2003

"September and October are the worst months for stocks, right? Nonsense and mythology! It goes both ways. Crashes have often happened then. But often not, too. As in other months. This bull market's wall of worry will find more to fret about after October. Count on it. In the meantime real good news gets amazingly little press."

- excerpt from "Valuation Myths" September 29, 2003

"We are all entitled to opinions, but they are nothing more than that. And we can all be wrong. What we can know is that right here and now, equities are doing just fine, beating cash or bonds this year handily."

- excerpt from "Professors and Markets" September 1, 2003

"Recall candidate Bill Clinton campaigning in 1992, with the slogan: "It's the economy, stupid"? The gurus then saw a below-average decade ahead, and they see the same now. Why? Because the prior decade had been too good for the next one to be anything but bad. The times ahead are going to be good."

- excerpt from "Dumb Bears II" July 21, 2003

"Why is it hard for most stock investors to see a big rally ahead? Partly for the same reason most of them completely missed the last three negative years. Volatility blindness."

- excerpt from "Volatility, the Good Kind" June 23, 2003

"When most investors are greedy, you should be fearful, and when most investors are fearful you should be greedy. Investors now get the first part of this rule, but not the last part. Fear is pervasive on Wall Street, so this is a good time to be greedy. Sell your timid Treasury bills. Buy stocks."

- excerpt from "Greed Is Good" May 26, 2003

"And then Germany's market will rise, but more so. It will be led by the same insurers that dragged it down. Just as tech in America led the U.S. market down but is now leading it up, the insurers that cost Germany so badly present great opportunity. Expect a reversal soon."

- excerpt from "Crash and Opportunity" April 28, 2003

"So far, beyond one brief sentence in last month's column, there has been no national media mention of the size of public and foreign pension underfunding. Hence, it will surprise investors and be all the more bullish."

- excerpt from "Buy Money Managers" March 31, 2003

"You bet based on what is historically reasonable and what you see that others can't. First, a fourth big down year would be rare and would make this bear market fully comparable in magnitude and duration to 1929-32, a uniquely bad episode in economic history."

- excerpt from "The Bipolar Market" March 3, 2003

"Where will the market go in 2003? I see only two real possibilities: down a lot or up a lot. Since I don't envision down a lot, I'm bullish."

- excerpt from "Next Year Will Be Better " February 3, 2003

"In modern history almost all negative years were in the first half of Presidents' terms. The exceptions involved massive negative events. The third year is best...2003 will be good, indeed. Particularly after three negative years."

- excerpt from "Three's the Charm" January 6, 2003

"In 2002, telecommunications firm Worldcom followed in Enron's loathsome footsteps. Like Enron's demise, an accounting scandal was the root of Worldcom's downfall. Predictably, legislators' knee-jerk reaction to these and other scandals was to legislate, and the Sarbanes-Oxley Act of 2002 was born. Sarbanes-Oxley has been highly criticized in the years since it was enacted because it foists substantial regulatory costs on US listed companies, especially smaller firms that can't spread the costs out over a larger revenue base. Despite widespread acknowledgement of Sarbanes-Oxley's flaws, it remains in place in 2010. The Fed continued to cut interest rates in 2002 in response to the slumping economy. When the stock market peaked in March 2000, the Fed Funds Target Rate was 6%. By 2002, Greenspan and his cohorts slashed it to 1.25%-an all-time low to that point. The Fed's discount rate, which unlike today was below the target rate in 2002, was down to 0.75%."

- from Chapter 19, TRIPLE BOTTOM BLUES
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

"The bear market not only continued through July, it sharply picked up steam. From the end of June to the market's near bottom on July 23rd, the S&P 500 fell over 19%.1 Stocks rallied briefly from there, then turned south again, reaching the ultimate bear market bottom on October 9th...From the March 2000 peak to the October 2002 low, the S&P 500 lost over 47%3 making it one of the worst bear markets in history. In 2002 alone, the S&P 500 dropped over 22%4-the worst year of the bear."

- from Chapter 19, TRIPLE BOTTOM BLUES
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

1. Ibid.

"The next bursting bubble? Bonds. Folks have flooded into the Treasury market. They are driven by panic in the stock market, mesmerized by a 21-year bull market in fixed income and misled by the mythology that bonds are safe. They aren’t. You can get killed by them."

- excerpt from "Not Bonds, Books" December 9, 2002

"Can you predict which way the market is headed by looking at the average price/earnings level? Some investors think that you can-or at least, that you are likely to do well buying when the ratio is low and selling when it is high. I have evidence to the contrary. The P/E level is useless for market timing."

- excerpt from "The P/E Myth" November 11, 2002

"In the steep August rally the total position in shorted stock increased to record levels. Every share sold short, which must eventually be bought back, is a borrowing of future demand for stock, and that is beautiful."

- excerpt from "Five More Reasons to Buy" October 14, 2002

"Big bear markets are followed by big rallies. There are no exceptions."

- excerpt from "A Beautiful Market" September 16, 2002

"In shifting last month from bearish to bullish I was clearly too early. But I'm content. Investors are fearful. Many folks foresee a foul future. Few fathom fantastic returns. In my 30-year investment career, and in the history I've studied, such times have always rewarded, if not immediately, then before many months pass."

- excerpt from "Four Dangerous Words" August 12, 2002

"It is finally time to get fully invested, although maybe only temporarily. Investors have dug down into pessimism too far for stocks not to pop upward nicely."

- excerpt from "Buy Stocks Now" July 8, 2002

"At and around real bottoms, optimism is basically wiped out and investors don't stretch for return; they duck for cover. Stretching reflects partial optimism, which reflects excess demand for stocks, which presages still more ugliness ahead."

- excerpt from "Controlled Risk" May 27, 2002

"That's a trick headline. I'm as bearish as I have been, without interruption, for 18 months...The headline refers to buying good investment books, not stocks."

- excerpt from "Buy Now" April 29, 2002

"So? Have I been wrong? Do we have a bull market? The S&P climbed 7% between February 22 and March 8. I think this is just another sucker rally in a long bear market. I may be wrong. Yet the logical conclusion to draw from this winter's rally is that almost everyone is myopic now, unable to see anything except what stares them in the face."

- excerpt from "Myopia" April 1, 2002

In the U.S. most folks sense economic recovery at hand and believe a new bull market started in September. Still, can it be real if its initial thrust can't maintain upward momentum? I think not."

- excerpt from "Fatigue-O-Meter " March 4, 2002

"Okay, I changed my mind. In my last column (January 7) I said the market would be up in 2002. It won't. Get over it...The fourth-quarter rally made American forecasters too sanguine for 2002 to be a positive year."

- excerpt from "2002: Another Down Year " February 4, 2002

"Our brains are set up to fear heights, so a market with a high P/E--the S&P 500's now is twice the historical norm-makes us afraid. But there is nothing in finance theory or history indicating P/E alone should predict anything, and much to indicate it shouldn't. For every historical instance of a high- or low-P/E market doing badly or well over the following one or two years, there is a comparable instance of the reverse."

- excerpt from "Troubling Questions" January 7, 2002

Junichiro Koizumi is elected Prime Minister of Japan, Silvio Berlusconi wins Italy's general elections, Timothy McVeigh is executed for the Oklahoma City bombing, tragedy strikes the World Trade Center in NYC and the Pentagon on 9/11, anthrax attacks scare, China is admitted to the WTO, and Enron files for Chapter 11 bankruptcy following its accounting scandal.

"2001 was a year of sharp drops and massive countertrend rallies. The S&P 500 started the year on a positive note, rising through January. Then the downward momentum began again and accelerated. From February through April 4th, the S&P slid 19%.1 Then stocks rallied. From early April through late May, the S&P 500 jumped 19%,2 leading many to believe the bear market was over...By early September, stocks were at their low point for the year...Stocks would rise through yearend, finishing 5.5% above September 10th, but down 11.9% on the year.3"

1. Ibid.
2. Global Financial Data.
2. Global Financial Data

"I'm content to remain bearish. Too many investors still remain optimistic for me to expect a near-term bottom."

- excerpt from "Bottoming Out" December 10, 2001

"I am hearing two extremist views lately about where the market is headed. One is optimistic, the other pessimistic. Both are wacky. Still, in their own odd ways, they signal to me we are getting close to the market's bottom-although we aren't quite there yet."

- excerpt from "Wacky Forecasts" November 12, 2001

"In the weeks around this market's final bottom, you won't see deals like Hewlett's. You won't see ads like UBS'. In fact, you will see scant anecdotal evidence of folks seeking opportunities. You will see fear. That's why you should remain bearish for now. Buy Treasury bills. Buy put options. Avoid equities."

- excerpt from "What HP Says About the Market " October 15, 2001

"What to do? Well, I'm still ahead year-to-date, by having avoided the decline so far this year. I'm content to sit and wait defensively until I see more worry and pain. Maybe it isn't until the end of the year or, heaven forbid, until early next year. "

- excerpt from "Mad Magazine Investors" September 17, 2001

"So I don't like funds. The actively traded ones will cost you a bundle. The passive index funds are a lot cheaper, and of course an S&P 500 fund will track that index pretty well. But I don't like those, either. Why? Taxes."

- excerpt from "I Hate Funds" August 20, 2001

"In my 30 years working in this industry and studying its history, I've never known of a new bull market that didn't face the wall [of worry]. Genuine bull markets start out hesitantly. All the investment buying power isn't expended in one eruption but slowly and inexorably levitates prices. Remain defensive. The ride is rougher ahead."

- excerpt from "The Lone Ranger " July 23, 2001

"Is it a new bull market? No. The rally that kicked off April 4 inspired widespread talk that the bear market is over and a new bull market has begun. The market's sideways move in May has done nothing to dispel that. Why don't I think we've seen the bottom? The spring rally has just about all the signs of a classic correction within a bear market."

- excerpt from "Bear Market Corrections" June 11, 2001

"It is still a long way to this bear market's bottom. I stick by my forecast of an S&P 500 bottom below 860 (it's now 1240) and a Nasdaq nadir of about 1200 (from 2080 currently). Why? Sentiment hasn't turned dour enough yet."

- excerpt from "Fall Till the Fall" May 14, 2001

"Tax cuts, retroactive or not, can't be implemented fast enough to stop an implosion that already has begun. Bush's puny $5.6 billion 2001 tax reduction will have no effect on our $9.4 trillion economy. That is one-twentieth of 1%, or $40 per U.S. worker. About enough for one good beer bash."

- excerpt from "Bears, Bush and Greenspan" April 16, 2001

"I'm outright bearish for the first time in a decade, as I said in my last column. Get ready: The bumps will be brutal ahead...bear markets don't get easier as they progress. Their latter stages are what really ravage you."

- excerpt from "Bear Market!" March 19, 2001

"My 2001 forecasts? I'm shifting to fully bearish for the first time in a decade...the S&P 500 should be fairly flat this year. For a while it will do much worse. It should fall more, maybe down 25% to 35%, in the late third or early fourth quarter. Nasdaq should fare slightly worse, losing another 15% for the year-and at its nadir will be lower still than the S&P at the bottom. I think foreign markets will fare slightly better, with the World Index beating the S&P by just a few percent for the year. It's time to be defensive."

- excerpt from "Lucky Again in 2000" February 19, 2001

"People keep asking if the technology drubbing is over-or will be soon. As long as folks keep asking, you don't have to. It isn't over until they stop asking. The end is silent. Make no mistake, this is the middle of the bursting of a classic sector bubble."

- excerpt from "Tech 2001" January 22, 2001

Alan Greenspan is appointed US Federal Reserve Chairman for the fourth time, torrential rains in Africa leads to severe floods in Mozambique killing 800 people, major stock indexes reach new highs, Vladimir Putin is elected President of Russia, Microsoft loses antitrust case, Summer Olympics are held in Sydney, Australia, and George W. Bush wins US presidential elections.

"The tech-heavy NASDAQ Composite's amazing 1999 returns carried over into the first months of 2000. By early March, the NASDAQ was already up over 20% while the broader S&P 500 was down about 6% over the same period.1...The S&P 500 closed the year down a bit more than Ken expected, falling 9.1% in 2000...The NASDAQ peaked...on March 24, 2000 and began a massive slide from there.2 In 2010, the NASDAQ is still about 50% below where it was in March 2000."

1. Global Financial Data.
2. Thomson Reuters.

"Any single discipline is too narrow. Charting isn't very good to begin with. There is virtually nothing in theory or empiricism to indicate anyone can predict stock prices based solely on prior stock price action."

- excerpt from "Ode to John Schulz" December 25, 2000

"Hence picking a long-term benchmark isn't about getting the best returns; it's about stomaching volatility. Investors hate wild gyrations. The best benchmark is one that gets you to that 30-year future return with the smoothest ride. And that is the Morgan Stanley World, since the broadest index is the least volatile."

- excerpt from "America Versus the World" November 27, 2000

"Most retired guys, like Joe, confuse strategy with tactics in thinking they should invest for income. Most of them invest as if they hate their wives. How so? Because their short-term approach regularly leaves a wife-and women tend to outlive men-poor after her husband's death."

- excerpt from "Wife Haters" October 30, 2000

"Want to train yourself psychologically to be a better investor? Learn to shun pride and accumulate regret. Forget fear and greed, the classically cited prime movers for the stock market."

- excerpt from "The Luck God" October 2, 2000

"Want to know how to become richer than your neighbors? ...Just keep pace with the stock market. Anyone who does that will watch his relative wealth rise."

- excerpt from "How to Get Richer " July 3, 2000

"Always manage against a benchmark. Underweight means owning less than the benchmark's share of a sector. Overweight means more. For most investors the benchmark should be the Morgan Stanley World Index…"

- excerpt from "What to Do About Tech" May 29, 2000

"The market's recent turbulence frightens people. How to deal with it? Use portfolio management to gird your portfolio against market plunges. Don't just collect stocks. Most investors collect, meaning they buy what they like."

- excerpt from "Downturn Insurance" May 1, 2000

"How is it best to forecast? Carefully analyze what the market pros say. Then know that won't happen. Think I'm kidding? The broad consensus of professionals as a group is always wrong."

- excerpt from "Break Their Crystal Balls" April 3, 2000

"Tech stocks are in a late-stage bubble. It should break later this year. I usually dislike 'bubble,' a word bandied about too often by extremists. But I watched a bubble like this one 19 years ago, and I have seen how it ends. Right now technology stocks are just where oil stocks were in early 1981."

- excerpt from "1980 Revisited" March 6, 2000

"How did I do in 1999? My picks were good-and lucky. With investing, skill can take you only so far."

- excerpt from "Good and Lucky" February 7, 2000

"Is your goal to maximize return? It shouldn't be. Why not? Portfolio management isn't just collecting stocks and hoping they rise. Lots of investors, including professionals, ignore risk control, which is portfolio management's very heart."

- excerpt from "Against the Odds" January 10, 2000

"Doomsayers feared rolling into the new millennium would throw computers out of whack, with all sorts of tragic implications. Ken first dismissed the notion Y2K could derail the stock market in 1997, but Y2K hysteria was again building in 1999...Loose money abroad was still flowing into the US, causing Ken to favor the biggest stocks here. Foreign investors simply favored the biggest, internationally active US firms. And the structure of the relatively newly-created European Economic and Monetary Union (EMU) ensured loose money would continue to flow. Each country in the EMU has its own fiscal policy, but there's one overarching monetary policy for all member countries, directed by the European Central Bank (ECB). There's no back out provision to the EMU structure. If one country wants to leave, the whole EMU could theoretically fall apart. So the ECB has an incentive to keep the economically weakest countries from jumping ship. That means keeping interest rates low when those economies are struggling. Low interest rates in Europe keeps money flowing to the US."

- from Chapter 16, IPOS, Y2K, NASDAQ, OH MY!
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

"Many folks remember 1999 as a banner year for stocks. However, big stock returns did not necessarily translate into a fantastic year broadly for individual investors. How so? 1999's big returns were concentrated in just a few categories: technology stocks, telecommunications stocks, anything Internet related, and just about any initial public offering (IPO)...The rest of the market had solid but not exceptional returns. The S&P 500 gained 21.0% in 1999-a great year historically but the worst since 1994.1 Global stocks rose 25.4% 2-a smidge better than the US but again not abnormal for a bull market. Returns for small US stocks were decidedly average with the Value Line gaining just 10.6%.3"

- from Chapter 16, IPOS, Y2K, NASDAQ, OH MY!
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

1. Global Financial Data.
2. Ibid.
3. See Note 1.

"Active managers can't beat indexes, right? So go passive, right? You've read that lots. Like many things widely bandied about, it contains just enough truth to trick you. But it is wrong. It is a wicked lie."

- excerpt from "The Index Sirens" December 13, 1999

"Dow or S&P, what you really want to know is where I think the market is going. It's a little early for me to make a specific forecast of returns for 2000, but I will hazard that it will be a fine year for the S&P 500 and an even better year for foreign stocks, as measured by Morgan Stanley's cap-weighted EAFE index."

- excerpt from "Never Say Dow" November 15, 1999

"Those who still fret Y2K's market impact don't fathom the markets, and you simply should be dismissive of them all...Y2K is the most widely hyped 'disaster' in modern history. It is well documented: The only folks who aren't familiar with it are in the upper Amazon basin, rapidly fleeing the rest of humanity."

- excerpt from "Greater Fools" October 18, 1999

"Late in a bull market and throughout bear markets, small stocks almost never lead for long."

- excerpt from "Small Stock Fantasies" September 20, 1999

"Don't make the mistake in 1999 that so many folks made last year and let your fear of stocks, and lack of fear of bonds, deceive you into a bad asset allocation. The right allocation now for bonds remains zero."

- excerpt from "The Broken Bond" August 23, 1999

"Fear of heights, or acrophobia, has been bred into us over the eons and is hard to shake. For most longtime investors, admitting that high P/E's aren't risky also means admitting having been wrong. That's tough to do."

- excerpt from "Investing for Acrophobics" July 26, 1999

"No investing style can be best permanently. When a consensus forms believing one style to be best, investment bankers create enough new securities to make sure it disappoints."

- excerpt from "Adaptability" June 14, 1999

"Don't be a bull or bear all the time. There is a time to buy, a time to sell and a long time to do nothing."

- excerpt from "Not Your Average Joe" May 17, 1999

"The Great Humiliator has only one goal: To humiliate as many people as possible for as many dollars as possible over as long a time as possible. En route, its favorite victims are professionals. As a group they can’t be right. So, you should expect this to be an above-average year."

- excerpt from "Bet Against the Experts" April 19, 1999

"Wall Street's favoritism for huge stocks shows no signs of abating. Indeed, there is a powerful new force at work that should cause this trend to continue: the new euro currency."

- excerpt from "Why Big Gets Bigger" March 22, 1999

"If you're a great market timer, which few folks are, then you may well use index funds to buy low and sell high. But normal folks who discover index funds late in a bull market won't use those funds to be long-term investors, even if they think they will. Instead, most of them will sell out late in a bear market, hurting themselves."

- excerpt from "The Case Against Index Funds" February 22, 1999

"Let me restate what I said a year ago. After the long string of years in which US stocks have been beating foreign ones, the time will come when EAFE beats the S&P 500. I don't know when it will come, but I know it will come. So, keep up that diversification."

- excerpt from "Report Card 1998" January 25, 1999

"If 1997 seemed eventful, 1998 was about to knock folks' socks off. The Asian Financial Crisis would spread west, contributing to a financial crisis in Russia that saw the government default on its debt and the ruble devalued-the famous "Russian Ruble Crisis". The ripples then made their way to the Americas, contributing to the failure of then-massive US hedge fund Long Term Capital Management (LTCM). With nearly $130 billion in assets (almost all of it borrowed) at the start of 1998, LTCM was thought to be so big its failure could reverberate through the global financial system. Latin America was struggling too, with a many developing countries there entering recession. All this against a backdrop of US political scandal. The Monica Lewinsky situation was rapidly unfolding in the media, eventually leading to President Clinton’s impeachment in December 1998."

- from Chapter 15, RUBLES, CORRECTIONS, AND MORE BULL
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

"The S&P 500 would rise nearly 30% in 1998.1 But it wasn't a smooth ride. The S&P 500 surged right out of the gate, crossing the 1,000 mark for the first time in February, and gaining over 13% in total in the first quarter 2-nearly a straight shot up...after a fairly smooth ride in the first half, the back half of 1998 was considerably choppy. A market correction beginning in July saw the S&P 500 drop-fast-over 18%.3 By early October, the S&P 500 was essentially flat on the year despite the strong early run. Foreign stocks fared worse, falling by more than 20% during this period.4 Ken’s advice [to remain invested] proved prescient as US stocks recorded their best fourth quarter ever, rising over 21%.5

- from Chapter 15, RUBLES, CORRECTIONS, AND MORE BULL
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

1. 2. 3. 4. 5. Global Financial Data.

"Here I go again, still optimistic. I expect a strong 20% gain for the S&P 500 in 1999."

- excerpt from "Bullish for '99" December 28, 1998

"This morphs into the lesson that most folks can't stick to any focused strategy, whether theirs, mine, their friend's or anyone's. They seek consensus, which is no strategy and no real diversification...If you have a strategy that works, ignore me and everyone. Stick to it."

- excerpt from "Pick a Strategy and Stick With It" November 30, 1998

"Bear markets generally take a long time, and there isn't time for one between now and a good 1999 market."

- excerpt from "Don't Let 'Em Scare You Out of Stocks" October 5, 1998

"Correction or bear market? Either way, stay cool. The time for tough decisions comes in a few months, but it isn't now. My best guess is that this is a correction in a bull market, but with portfolio management you're never 100% certain. The key is to conduct yourself so that when you're wrong, you don't pay too heavy a price."

- excerpt from "Stay Cool" September 9, 1998

"I throw in the towel on gold and admit my foray into it was a mistake. In January I recommended putting 8% of a portfolio into any ten beat-up, tax-depressed gold stocks. The strategy hasn't worked, and I don't think I know what I'm doing there. Better to exit."

- excerpt from "Complain All You Want" September 7, 1998

"It is only off the bottom of a real bear market that you should concentrate in small stocks. In the last two-thirds of a bull market and throughout a bear market, big stocks best small stocks, and the very largest stocks shine brightest."

- excerpt from "Dumb Is Beautiful" August 10, 1998

"Markets fear strong presidents. The weak one now sitting in the White House is to its taste."

- excerpt from "1998 Looks Like 1958" June 1, 1998

"My sense, based on history, is that the market likes a president at his lowest level of power. And that happens on the back end of his term. So don't look down at how far the market has come-that will just make you dizzy. Instead, look at how much further it may have to go."

- excerpt from "This Bull Ain't Tired" May 4, 1998

"Think big, both here and abroad, and don't get too fancy. The tide has been running in favor of the biggest global companies and that tide shows no signs yet of reversing."

- excerpt from "The Dance of the Elephants" April 6, 1998

"The Asian madness is just that: An excuse for a big market correction. Ride it out...The world is in good shape. This storm will pass and we will wonder what the fuss was about."

- excerpt from "A Passing Storm" February 9, 1998

"A 1998 bear market won't surprise half the forecasters. A modest rise won't surprise many folks either. But three more years of up market is inconceivable to almost everyone I hear or read. So, to me, it's most likely."

- excerpt from "The Bull Market's Not Over" January 12, 1998

"In the UK, political change was afoot as the Labour Party wrested control from conservatives for the first time in 18 years. The UK also lost Princess Diana when she was tragically killed in an auto accident in Paris. In Asia, the Asian Financial Crisis was unfolding, shaking foreign markets. But US stocks were largely unscathed."

- from Chapter 14, RATIONAL EXUBERANCE
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

"Then Fed Chairman Alan Greenspan closed 1996 warning of unsustainably high asset values in his famous "irrational exuberance" speech. As you might expect, stocks reacted negatively to such a warning from the world's most powerful economist. But only briefly...The S&P 500 lost a few percent in the days following Greenspan's speech only to regain their upward momentum. The S&P 500 gained 33.4% in 1997.1 Between the date of Greenspan's speech and the end of the bull market in March 2000, the S&P 500 gained 115.6%.2"

- from Chapter 14, RATIONAL EXUBERANCE
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

1. Global Financial Data.
2. Ibid.

"Furthermore, the bull market has gotten very old and a bear market is coming. No, I'm not bearish. In fact, the recent market volatility has made me more bullish rather than bearish looking at 1998."

- excerpt from "Buy High, Sell Small" December 15, 1997

"This money creation should keep the bull market alive for a while. It will end when inflation gets ugly. That's what's in store, not deflation. I don't know when-but it's coming."

- excerpt from "Go Slow: Inflation Ahead" December 1, 1997

"Money is simply pouring into the U.S.A. Foreign money is what fundamentally drives this stock market. As long as it pours in, this bull keeps galloping."

- excerpt from "Beware of Foreigners Bearing Bucks" October 20, 1997

"Better than futilely trying to foresee a top, wait for clear signals that the market has topped."

- excerpt from "When Should You Get Out?" September 22, 1997

"Huge stocks have the qualities the market now prefers...The big ones have both quality and foreign revenue exposure, which the market now warmly regards. They also have the liquidity, so they can be sold easily."

- excerpt from "Bigger Is Beautiful" August 25, 1997

"Seven months ago my December 30 column said that 'my best guess' was for a peak 'in 1997's first half.' Happily, I did not urge you to sell but urged you to remain fully invested until it looks like a top has already come. I'm glad I advised holding on to stocks because that peak now looks a good deal further away than the first half of 1997."

- excerpt from "The Top? Not Yet." July 28, 1997

"Investors simply give away too much money-in needless fees for needless services. For example, they often pay advisers 1% per year to be switched around among no-load mutual funds, which themselves cost 1.5% per year."

- excerpt from "Do It Yourself" June 16, 1997

"The leader flips to laggard just when it ramps up its PR machine and its boss starts gracing magazine covers."

- excerpt from "Nowhere to Go But Down" May 19, 1997

"If you are waiting for small stocks to have their day, I have bad news for you: You have a long wait. And I have further news: You had better revise your definition of what constitutes a large stock versus a small stock."

- excerpt from "Bet Against Buffett? Not Me." April 21, 1997

"It also impresses me that the goldbugs are so quiet these days...And when the last optimists give up, it's time for gold contrarians to turn optimistic."

- excerpt from "Golden Opportunity" March 24, 1997

"And my forecast that big stocks would nicely beat small stocks in 1996 was very good. Recommending only big stocks helped a lot. But I was wrong in thinking that big value stocks would outperform big growth stocks. The reverse occurred."

- excerpt from "My Annual Report" February 24, 1997

"Meanwhile, our politics will trend ugly. They always do in the first year of a President's term."

- excerpt from "Decoupling" January 27, 1997

"1996 was a bittersweet year for many Forbes readers. Stocks had a great year. But 1996 was also the year of Steve Forbes first failed run for the presidency. Despite Forbes' strong showing in the Republican primaries, Senator Bob Dole won the Republican nomination, eventually losing the presidency to President Clinton, who won his second term. Republicans lost a few seats in the congressional elections but maintained control of both the house and senate. The result was more political gridlock-investors cheered...Ken recommended focusing on US shares in prior years, but was warming up to foreign investments. Central banks in Europe and Japan waited too long to ease monetary policy to stoke languishing foreign economies but had finally done so in a big way."

- from Chapter 13, THE NIFTY NINETIES
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

"Stocks began 1996 with a series of fits and starts. The trend was up, but it was a bumpy road. That is until midyear. Stocks experienced a 7% correction in July that left the market up just 3% for the year, but surged from there.1 From late July through yearend, the S&P 500 gained nearly 20% with barely a hiccup along the way, finishing the year up a solid 23.0%.2 Foreign shares were up about half as much."

- from Chapter 13, THE NIFTY NINETIES
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

1. Global Financial Data.
2. Ibid.

"I expect to try to make money throughout the upcoming bear market. Note I said 'upcoming.' As of this writing, the bull market is still intact, and I have said I won't turn bearish until after I think I have seen the top."

- excerpt from "The Top Is Nigh" December 30, 1996

"To me, finance's frontier is what academics call 'behavioralism'-the psychology of what people do with investment tools, as opposed to traditional finance, which simply analyzes the tools themselves."

- excerpt from "For Your Christmas Shopping List" December 2, 1996

"The outlook for smaller stocks looks rather ugly to me right now. There are lots of lousy but well-accepted academic studies of paper portfolios to show that small stocks do best, by several percent per year. Unreal."

- excerpt from "Small Isn't Always Best" November 4, 1996

"What you'll find is that building a business is the best way to get rich, but for staying rich, you can't do better than own common stocks."

- excerpt from "Why the Rich Get (Relatively) Poorer" October 14, 1996

"Yes, such an outcome means legislative gridlock in Washington, but markets much prefer gridlock to massive change. In big change is big risk."

- excerpt from "The Election and Stocks" October 7, 1996

"My own firm's recent PSR research has focused overseas. Here, too, low-PSR stocks nicely beat higher PSR stocks and beat other valuation cuts. We have focused research overseas because it hasn't been done yet publicly, and because, as my most recent columns have predicted, 1997 and 1998 will offer better stock market returns in Europe and Japan than in the U.S."

- excerpt from "PSRs Revisited" September 9, 1996

"Despite the July drop, I haven't yet turned bearish on America, but am getting more bullish on the rest of the developed world."

- excerpt from "Time to Take a Trip" August 12, 1996

"For now, I remain bullish on big, relatively cheap stocks that haven't moved too much and have exposure to a European pickup."

- excerpt from "Good for Europe, Bad for America" July 15, 1996

"I have found that it is far better and more profitable to wait until I can see that a market peak has in fact been formed, and then beat an orderly retreat."

- excerpt from "The Orderly Retreat" June 17, 1996

"Don't get me wrong. I expect bad things to happen. Cancer, taxes, Bill Clinton. Maybe a market peak late this year and a normal recession in late 1997. And on with the 'Nifty Nineties.' Until I see actual signs of a major market peak right behind me, I'm bullish and want to own big, cheap stocks."

- excerpt from "Pity the Poor Bears" May 20, 1996

"Since politics does influence markets, I'm making a detour into political prognostication to explain why I think the stock market is going to be extremely strong as Summer spins to Fall…"

- excerpt from "The Election and Stocks" April 22, 1996

"Right now the stock market has about as severe a case of acrophobia as I have seen. So relax. This year shapes up as a good year overall, despite fear that the market is too high."

- excerpt from "Acrophobia" March 25, 1996

"And don't you be misled by the various excuses people have for not owning stocks. This is still a bull market."

- excerpt from "Bet on the Bull" February 26, 1996

"'This year will be a good year in the stock market.' So started my January 16, 1995 column. Ditto, I say, for 1996."

- excerpt from "Year of the Aging Bull" January 22, 1996

The World Trade Organization (WTO) is established to replace the General Agreement on Tariffs and Trade (GATT), Oklahoma City bombing killed 168 people, OJ Simpson stands trial and is eventually found not guilty, conflict escalates between Croatian and Serbian forces, and major stock market indexes hit all-time highs.

"The Dow, flawed index that it is, crossed both the 4,000 and 5,000 marks in 1995.1 The S&P 500 returned 37.6%-its best year since 1958.2 And as Ken forecast the year before, US stocks led the charge, more than doubling the return on foreign shares."

1. Global Financial Data.
2. Ibid.

"From my favorite, Joe Goodman, this key market-timing wisdom: 'The best one can hope for is that the turn in the main trend can be detected two or three months after it has taken place.'"

- excerpt from "Rummaging in the Attic" December 18, 1995

"Money managers actually manage money. Investment letters don't. They are not directly comparable. Investment letters run paper portfolios, and their results gloss over real costs like 'impact'-which is huge. By impact I mean the effect the letter's recommendation has on the price of the stock."

- excerpt from "Apples and Oranges" November 20, 1995

"Folks ask me how long this bull market will run...I'm flattered people ask, but I don't really know when this bull market will die. My best thinking is: It shouldn't end before about March, and may well run strong through the elections and year-end."

- excerpt from "Countdown to a Top" October 23, 1995

"How about cash or short-term bonds as a hedge against a market crash? Doing so for a year or so is fine, but only if you are really good at market timing-and who is? Most folks use this as an excuse to commit financial suicide. Even in a market crack, most folks do better riding through it than trying to time it."

- excerpt from "The Liquidity Trap" October 16, 1995

"And I will ignore all the long-term bears, who are no more likely to be right in the fall of 1995 than they were in the autumn of 1994."

- excerpt from "Babbling Bears and Other Menaces" September 25, 1995

"People pick funds as if they were driving a car forward while looking in the rearview mirror. They see behind, but not ahead. So they buy funds that did well in the bull market that is about to end."

- excerpt from "Bear-Proofing Your Portfolio" August 28, 1995

"The economy rarely tips into recession without the stock market's fading first. Stocks lead the economy and not the other way around."

- excerpt from "Wall of Worry" July 31, 1995

"What isn't different is that to be a bear and right, there must be darn few other bears. But that time isn't yet; investors remain skeptical, even if afraid to be outright bearish. So I’ll stick with my January forecast, that the market will be up 20% to 40% this year. We're close now."

- excerpt from "This Time, It's Different" July 3, 1995

"If you must have a guru, pick one who already has made mistakes and shown grace in making them. Otherwise, you are most apt to need to pick another one soon."

- excerpt from "Warren Buffet Versus the Beardstown Ladies" June 5, 1995

"If [the US dollar] were really down, commodities priced in dollars would have risen a lot. They haven't. Contrary to conventional views, there is no weak dollar-based inflation risk. This whole misperception is bullish for U.S. stocks."

- excerpt from "Special Situations" May 8, 1995

"Here's what history shows: Stock markets that hit new highs are more likely to keep rising than to fall. If you sell at the first new high or thereabouts, you miss the rest."

- excerpt from "How to Tell a Bull From a Bear" April 24, 1995

"Stocks, dampened by 1990's setback and a weak 1994, have been mediocre performers over the last five years. That leaves room for them to do fairly well in the next five."

- excerpt from "Advanced Fad Avoidance" March 13, 1995

"My 23 years in the investment business have taught me this: The market rises just as often when it is 'not cheap' as when it is. This may seem counterintuitive, but it is not. There is a lot of ground between 'not cheap' and 'overpriced.' We are on that ground right now, with lots of room to go before stocks are 'overpriced.'"

- excerpt from "Compared With What?" February 13, 1995

"This year will be a good year in the stock market. With a few notable exceptions, a bad year has led to a good one-and 1994 was a bad year...I expect stocks to shock almost everyone in 1995 with a 20% to 40% rise."

- excerpt from "A Year of the Bull" January 16, 1995

"One reason for Ken's 1994 bullishness was the shape of the yield curve. A yield curve is a graphical representation of yields on bonds with different maturities. Typically, yields on short-term bonds are lower than those on long-term bonds, meaning the yield curve is positively sloped. Banks tend to borrow money at short term interest rates and lend money at long term rates, so the steeper the yield curve, the more profitable it is for banks to make new loans. That makes money more readily available and is generally positive for the economy. In 1994, interest rates were rising (the US Federal Open Market Committee raised short term rates for the first time since 1989), but the yield curve remained quite steep."

- from Chapter 11, THE CALM BEFORE THE STORM
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

"...but a great year 1994 wasn't. Though it wasn't terrible either. Global stocks gained just 5.6% in 1994.1 The S&P 500 Index fell 1.7% but actually posted positive returns.2 How? Dividends. Just looking at changes in the price of a stock or stock index only tells part of the story. Gains on stocks come not only from stock price changes but also from dividends...Most years, that means total returns will be slightly more positive or slightly less negative than price returns. But in an exceptionally flat year like 1994, price and total returns came in on opposite sides of zero with a positive S&P 500 total return of 1.3%.3"

- from Chapter 11, THE CALM BEFORE THE STORM
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

1. Global Financial Data.
2. Ibid.
3. See Note 1.

"Inflation fears have spooked the markets. Are these fears justified? No. Most folks expect inflation because everyone else thinks it's coming. Crowd-think is almost always wrong."

- excerpt from "Inflationary Ghosts" December 19, 1994

"Most of any money manager's results come from style biases-factors he builds into his portfolio, knowingly or not."

- excerpt from "A Reading List for Serious Investors" November 21, 1994

"Phenomena mean various things at various times. Something bullish right after a recession-like rising prices-can be bearish in an overexpansion. Sometimes expanding business makes interest rates rise-sometimes not."

- excerpt from "The Babson Four-Step" October 24, 1994

"So, unless you are good enough to attract lots of investment partners...or unless you have a highly developed and rare ability to identify long-term winners, forget about getting rich in the stock market. Should you, therefore, give up on stocks? No. Because if you have some money and want to protect it from inflation and get a reasonable return above inflation, stocks are perfect."

- excerpt from "Be a Buyer, Not a Seller" October 17, 1994

"Expect President Clinton to do great things for stocks in 1995. Am I kidding? Nope. My studies show that it is near impossible to find a third year of a President's term that is stock market bearish-they tend to gangbuster."

- excerpt from "Three's the Charm" September 26, 1994

"The smart players avoid whiplash. They know they can't time markets. They know, too, that no one style of investing pays off all the time. So they spread their bets by style of stock, go for good long-term returns and to hell with volatility."

- excerpt from "Avoiding Whiplash" August 29, 1994

"So I learned to seek out unlabels: Stocks whose names are simply initials that tell you nothing. The stock market always pays up for visibleness. Sort of like a name-brand drug versus the equal but cheaper generic. Why pay the premium?"

- excerpt from "What's in a Name? Too Much." August 1, 1994

"A big reason I'm bullish and see the recent stock market drop as a correction, not the start of a bear market, is the yield curve spread. That is the spread between 20-year Treasury bond rates and 90-day T bill rates. Bear markets prefer flat yield curves; rarely has the bear reigned when long-term rates were more than 1% above short-term rates. Right now the spread is big-300 basis points-three full percentage points."

- excerpt from "A Bullish Spread" July 4, 1994

"The recent market correction offers a great chance to buy heavily capitalized value stocks-stocks of big companies selling at low multiples of sales, earnings and book value, and at high dividend yields."

- excerpt from "Fashion Report" June 6, 1994

"Buy now. After the February and March stock market decline, plenty of pundits are bearish, including several fellow columnists. Count me among the bulls."

- excerpt from "The 7% Rule" May 9, 1994

"Or, if you want to just write to tell me I'm dumb as dirt and twice as testy, that, too, is okay by me. Putting out my neck as often as I do and as publicly, I expect a certain amount of punishment."

- excerpt from "Fessing Up" April 11, 1994

"Gold demand comes from two sources: speculation and fabrication. The first needs inflation fear to drive it, or a crazy story. I have said many times in recent years, there is no global inflation pressure and won't be for years. Europe's and Japan's cycles, which are now out of whack with ours and lagging badly-with excess capacity-will see to that."

- excerpt from "False Glitter" March 14, 1994

"Plan for a great year in stocks. In 1993 stock indexes posted 10% to 20% returns. Expect no less now. I am optimistic because I meet so many pessimists these days."

- excerpt from "Jell-O Versus the Facts" February 14, 1994

"My overall Forbes record is good but certainly not perfect. I make bad picks. I'll make others. I hope each time to learn from my mistakes."

- excerpt from "Nolo Contendere" January 17, 1994

"Newly elected President Clinton took office in January, ushering in an era of "Clintonomics." Hallmarks of President Clinton’s new economic plan included higher corporate, income, and fuel taxes, and NAFTA-the North American Free Trade Agreement. All were enacted in 1993...The 1993 economy wasn't stagnant, but it wasn't much to write home about either."

- from Chapter 10, A TAXING YEAR
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

"1993 was an average year in the stock market. Literally. The S&P 500 returned 10.1% on the year-almost exactly the stock market's long-term average-which is actually quite unusual. Most years, market returns are extreme-up big or down-and far from average. But the year wasn’t average for all stock categories. Large US stocks lagged in 1993, hence the S&P 500’s middling returns. The Value Line Index-heavily weighted to smaller stocks-jumped nearly 20%.1 And foreign stocks did even better, rising over 23%.2"

- from Chapter 10, A TAXING YEAR
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

1. Global Financial Data.
2. Ibid.

"As bad or worse is the whole realm of initial public offerings, I once wrote that IPO should mean 'It's Probably Overpriced.' IPOs are priced to provide cheap capital to the investment banker's clients-which means expensive to you. We are close to the end of an IPO cycle. Beware."

- excerpt from "Four Don'ts and Some Dos" December 20, 1993

"Any new Peter Lynch book is newsworthy. Beating the Street (Simon & Schuster, $23) is also wise, witty and well written...he pokes fun at himself, offers introspection into his analysis, and is wonderfully quotable, as in: 'Never invest in any idea you can't illustrate with a crayon.'"

- excerpt from "For Giving and for Reading" November 22, 1993

"Think Biblically: Love the sinner-hate the sin. In investment terms, buy tobacco stocks-hate smoking."

- excerpt from "Love the Sinner" October 25, 1993

"Pick 'em carefully, hold them long and you needn't worry about falling victim to the latest wave of redistributionist politics."

- excerpt from "The Bubonic Plague Technique" October 18, 1993

"Now is the time to sell anything you aren't content to hold for the next few years. I'm still overall bullish, but as I write, the market seems a bit ahead of itself, some stocks in particular."

- excerpt from "Housecleaning Time" September 27, 1993

"Even my most casual readers know that I continue to be bullish on the bond and stock markets and do not expect a serious bear market until about 1995-96. Looking beyond that, I expect nasty corrections, but all within another good bull market."

- excerpt from "He's Still Hibernating" August 30, 1993

"In time, therefore, I will become a bear again. But the time is not yet. Not until certain signs have appeared. Short-term interest rates should have risen for at least a year. The excess of long-term rates over short-term rates should have fallen for at least 18 months-the yield curve will have flattened; right now it is quite steep."

- excerpt from "Stay Bullish" August 2, 1993

"For all the reasons I have laid out since 1990, I expect this decade to be just fine on Wall Street."

- excerpt from "Your Board of Directors" July 5, 1993

"I would stay away from most foreign equity markets. Japan has done well this year, but it's still overvalued, has lots of competitive problems ahead and is heavily a trader's market, mainly oriented to short-term swings. All the global gurus say you simply have to own the rest of the Pacific Rim-and South America-which says to me, via contrarianism, you probably shouldn't."

- excerpt from "A Near Sure Thing" June 7, 1993

"Bad politicians happily do not make bear markets. After a long expansion tires, bad Washington policies can be the straw that breaks our economy's back. But that's not now. I have been a raving bull for several years now. I'm still bullish but not raving. Prices are higher and the bull is older."

- excerpt from "The Clinton Factor" May 10, 1993

"Greenspan is and for all of his career has been fixated on inflation. Too much so. But like any Fed chairman he is even more fixated on keeping the Fed free from political interference. My guess is that, with Congress and Henry Gonzalez baying at the Fed's door, Greenspan will ease credit to keep the wolves away."

- excerpt from "Henry's Cattle Prod" April 12, 1993

"Do you need a broker who eats up a good chunk of your return in fees? No. You can easily allocate your own assets."

- excerpt from "Design Your Own" March 15, 1993

"For all the talk about this being a high-priced stock market, I find more cheap stocks out there than I can shake a stick at. Regular readers know I have been a rabid long-term bull for the last 27 months. I still am. Furthering 1992's trend, I expect the best part of the market will continue to be smaller, cheap stocks of firms that are fundamentally strong in their underlying business."

- excerpt from "Acres and Acres of Bargains" February 15, 1993

"I have been too optimistic since 1991 on the economy. While recovery started in mid-1991, and my timing on that was very good, I expected more oomph than occurred. One thing that has held the economy back is the perception that consumers and business owe too much money. I think this perception is wrong, but it exists and I should have remembered we live in a world where perception can overwhelm reality for quite a while."

- excerpt from "The Other Dow Theory" January 4, 1993

"The geopolitical winds of change were blowing hard in 1992. Just days before the start of the year, the Supreme Soviet formally dissolved the Soviet Union, ending the Cold War. A bit farther west, the European Union (EU) was founded with the signing of the Maastricht Treaty...Political winds were also blowing in the US. Bill Clinton defeated George H. W. Bush to become the first Democrat president since Jimmy Carter, which scared Republicans silly-and most investors too. Actual winds were blowing here too as Hurricane Andrew tore across Southern Florida and Louisiana causing dozens of deaths and tens of billions of dollars of damage..."

- from Chapter 9, TIMES THEY WERE A CHANGIN'
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

"As for stocks, 1992 was a slow, slogging year. After a roaring finish to 1991, sticks listed aimlessly for much of 1992...The S&P 500 slid over 5% for the year through early-April.1 The smaller stocks Ken was recommending fared better, rising by a few percent during the same period. But even their returns were unspectacular. In fact, stocks across the board were pretty much flat for the year well into October2...Despite the lackluster start to the year, stocks eventually jumped. From October 9 through yearend, the S&P 500 rose 9% and posted a 7.6% increase for the year-decidedly middling, though still positive."

- from Chapter 9, TIMES THEY WERE A CHANGIN'
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

1. Global Financial Data.
2. Ibid.

"As I have said for more than a year, consumers and voters are grumpy and fixated on negative news. But investors shouldn't be. This is a time to own cheap common stocks of good firms that will prosper as the economy continues in an expansion that will be stronger than commonly expected."

- excerpt from "Damn Lies" December 21, 1992

"For the first time in decades, we have the world’s cheap money, with that trend certain to continue under the new Administration. So prospects for the domestic economy look better than those of a lot of foreign economies. Focus now on stocks doing business mainly in America."

- excerpt from "Buy American" November 23, 1992

"Ignore his wrong and reactionary views, which suppose Uncle Sam can best discern how Wall Street should work. You know better."

- excerpt from "Profitable Reading" October 26, 1992

"Either way, the level of stock prices in 12 to 18 months will have less to do with who is elected this fall than it will with traditional economics. The economy's rebound may have shown little zip to date, but below-average early recoveries are historically linked to above-average later recoveries and to ones that are longer than usual."

- excerpt from "Value Will Out" September 28, 1992

"By and large it pays to avoid most funds with hot performance histories. Buying these funds now is like trying to drive forward while looking backward."

- excerpt from "The Cool Shall Be Hot" August 31, 1992

"Whenever you are in a commonly perceived recession, always be bullish."

- excerpt from "My Favorite Indicator" August 3, 1992

"With the Dow at record highs, some folks are afraid of the market's high P/E, others of its price to-book of 2.5 and still others of its meager 3% dividend yield. Don't worry. A simple but little-known fact: Anyone who ever bought whenever the market's P/E got above 25 looked pretty darn smart in a few years."

- excerpt from "Worry, Worry" July 6, 1992

"While I continue to be a bull, I'm nervous about some groups of stocks. The utilities are one such. They had a heck of a fine last decade, but tougher times lie ahead."

- excerpt from "Two to Avoid" June 8, 1992

"What is worth worrying about is that this is a bull market for most stocks, despite not being reflected in the Dow industrials and S&P 500. Bull markets that were led by smaller-size stocks, whether growth stocks or value stocks, have typically lasted three to four years. Having started in October 1990, this bull market is only about halfway through its life-maybe even a bit less."

- excerpt from "Going Up" May 11, 1992

"If you own mutual funds that invest in common stocks you should seriously consider getting out…Hardly anyone has noticed that mutual funds' portfolios are now filled with the market's priciest stocks."

- excerpt from "Overripe" April 13, 1992

"Instead of feeling euphoric about the bull market, many people are simply scared. How can stocks be so strong when the economy seems so soft? The Dow Jones industrials is at 30 times trailing earnings, and other imdexes have similarly high P/Es. The market looks historically high by many other value measures too: Price-to-book ratios, for example...But don't let these kinds of fears drive you out of a market that still has a long way to go."

- excerpt from "Fear of Falling" March 16, 1992

"This column contains an important lesson many miss: No one style is best for all time. Leadership shifts, and investors who stay loyal to one size or style can miss out on years of better performance. This points to the value of being style agnostic."

- excerpt from "Ripe for Rotation" February 17, 1992

"Folks are much too pessimistic-which is very bullish. Don't get me wrong. Yes, we have had a rough recession and face plenty of problems. We all know that. But we have faced much worse problems before and will deal with these, too. It's surprise that moves the market, not what we already know, and I am sure that the surprises will be mostly good ones."

- excerpt from "Misery in the Media" January 20, 1992

"Tensions in the Middle East had been escalating rapidly since Iraq invaded Kuwait in August 1990. In early January 1991, chances of a peaceful resolution were fading fast, adding to investor anxiety...Then on Saturday January 12, Congress authorized the use of military force in Iraq...The next week saw both the beginning of UN military action and the start of a 40-day, 19% S&P 500 rally...As is always the case in the early stages of new bull markets, there were many stock market doubters in early 1991. The war was just one concern. The US was also in the midst of a recession, the S&L crisis left hundreds of failed banks in its wake, and the US debt and budget deficit were troublesome to many-just to name a few."

- from Chapter 8, UNBELIEVABLE BULL
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

"In the first nine trading days of 1991, the S&P 500 lost 5.4%.1 Then on Saturday January 12, Congress authorized the use of military force in Iraq...The next week saw both the beginning of UN military action and the start of a 40-day, 19% S&P 500 rally 2...Amid all the fear, Ken's bullishness paid off in 1991-stocks soared, finishing the year with the S&P 500's best-ever December (+11.4% for the month).3 For the year, US small value stocks (+41.1%) underperformed small growth stocks (+49.7%), though value would do better over the next several years. Both trounced the larger S&P 500 (+30.5%).4"

- from Chapter 8, UNBELIEVABLE BULL
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

1. Global Financial Data.
2. Ibid.
3. See Note 1.
4. See Note 1

"In the early phases of every bull market investors think stocks are getting too high, that the economy won't expand and that this time things really are terrible and 'different' because of vast new societal problems. There's lots of such talk around these days, especially after the market's November tumble. In my view this frightened attitude is a sign that the bull market isn't over."

- excerpt from "Stay With It" December 23, 1991

"Staying with this bull market, or any bull market, is sort of like hanging on to a horse when it's bucking; it keeps trying to toss you off. But hang on. Don't listen to the beaten-up bears who seize on every correction to trumpet the long-awaited end."

- excerpt from "The Bucking Bull" November 25, 1991

"My advice to my readers is: Buy into the next five years' value cycle before the big investors do. Not growth. Expectations for well-recognized smaller-growth names are at levels I have seen only in 1983-higher than those of 1972-and both of those were simply disastrous times to buy recognized growth."

- excerpt from "Surprise" October 28, 1991

"What's the moral here? I think it is quite simple: Stick with things you know and understand and do them aggressively enough so you can keep up with the Joneses. If you want to invest outside your own expertise or don't have any expertise, get professional help so you don't one day find yourself feeling like a member of the formerly rich."

- excerpt from "Unloved and Undervalued" October 21, 1991

"I still think stocks will continue to do nicely well into 1993. The Dow and S&P 500 may do less well, but they are dominated by a very few, very big and mostly growth-oriented stocks and aren't too reflective of America's average stock. The smaller and less growth oriented stocks should lead the market through 1993."

- excerpt from "Geographical Biases" September 30, 1991

"The mere fact that so much ink has been spent on 'impending' banking failures tells you that actual failures, should they come to pass, won't move the market."

- excerpt from "Who Cares About Bankers?" September 2, 1991

"Supporting most bears right now is a bunch of bull: namely the notion that too much debt will bite us in the butt...Which is one reason the bull market has a good long way to run; the bears are basing their case on a wrong argument."

- excerpt from "Dumb Bears" August 5, 1991

"So, what does my perusing all this paper plus our own research tell mellow? That I expect small stocks to best big ones and statistically cheap stocks to do better than high-priced growth issues."

- excerpt from "Surveillance" July 8, 1991

"I am convinced that market leadership in the small-cap sector is about to rotate from the growth stocks to the value stocks."

- excerpt from "Watershed" June 10, 1991

"To avoid a 1983-84-like growth stock butchering, use the coming months as a chance to move out of high-P/E, high-PSR growth stocks, big-cap or small-cap. Happily, small-cap value stocks have just entered into their up-cycle, after years of lagging. Relative to sales and earnings they're still cheap, and If the 1982-83 parallels continue they can rise nicely for years, even if their small, growth brethren stall."

- excerpt from "Sell Growth" May 13, 1991

"In one respect the bears are correct: The S&P 500 is far from cheap. But they are also wrong, because the rest of the market is exactly at levels from which major advances have historically continued."

- excerpt from "It's Early in the Game" April 15, 1991

"The bull market isn't over. Not that it won't be punctuated with short, sharp pullbacks occurring almost kamikaze-like at the most unpredictable times. It will. The first such pullback came during the first half of January. I have no idea when the next will arrive. These early-cycle bull pullbacks can gut-wrench you as badly as any amusement park roller coaster ride. But, normal for a bull market, corrections are almost designed to scare you away. Don't let these pullbacks spook you."

- excerpt from "The Young Bull" March 18, 1991

"To my thinking we are in the early stages of a small-cap-led bull market that started in October. I have heard all the arguments for a capital R recession and/or a depression. There is the supposed debt crisis and the related federal budget deficit. Then, too, there is the much presumed imminent banking-failure crisis and the related imploding of real estate prices that is supposed to further sink the banks. I even watch CNN's coverage of the Iraqi war. While all these are much discussed, as I have said in times past, as ecnomic disasters they are mostly myths and at worst won't sink America's economy."

- excerpt from "A Contrarian's Mailbag" February 18, 1991

"If you didn't buy secondary stocks in the fourth quarter, when the new bull market started, don't be too disconcerted. Although you have missed a nice move, it's still not too late. This bull will be big and long. There will be steep counter-trend pullbacks, as in every bull market, and they will offer further buying opportunities."

- excerpt from "The Year of the Small Caps" January 21, 1991

By yearend, formerly jolly investors, pummeled by the bear and worried about the looming onset of the Persian Gulf War, had soured. Ken took that as a positive sign the bear was ending...In 1990, Ken continued to call for an extended stretch of US outperformance...Ken saw foreign central banks tightening monetary policy significantly. In most cases, rising short-term interest rates had risen above long-term rates, inverting yield curves worldwide. But investors had become too enthralled with the notion foreign economies were somehow permanently superior to the US to notice. Ken disagreed. He saw restrictive monetary policies abroad weighing on foreign stocks and economies in the short term. Over the longer-term, Ken noted demographic shifts favored the US. And most importantly, Ken disagreed with the idea foreign business practices had lapped the US."

- from Chapter 7, A SNEAKY BEAR MARKET
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

"Virtually all US stock market averages peaked just a few weeks after Ken’s prescient column ran ["The End is Nigh," 9/18/1989], but the downturn in the Dow and the S&P 500 didn’t last long. In fact, they were hitting new highs by the first trading days of 1990.1 The next few months would be choppy, but the Dow and the S&P 500 didn’t reach their ultimate 1990 peak until July 2...As the year rolled on, more and more foreign markets were starting to fall. Eventually, big US stocks followed suit. From the July 1990 peak through mid-October, the S&P 500 dropped 20%.3"

- from Chapter 7, A SNEAKY BEAR MARKET
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

1. Global Financial Data.
2. Ibid.
3. See Note 1.

"In terms of servicing debt, then, we are in no worse shape than we were in previous recessions. While little talked about, our debt-servicing capability is stronger than perceived because nonearning cash flow, principally depreciation, is at record levels relative to earnings and debt. This is because of the much underreported 1980s capital spending boom. If our affairs are in a deplorable state, the state is no more deplorable than at previous recent bottoms."

- excerpt from "Buy Now" December 24, 1990

"Fully 25% of the market's stocks now sell below their July 1982 prices, and almost half the market sits below its December 1985 prices. Remember: Knee-jerk selling is still jerk-selling. This tax-loss season is the time to be buying."

- excerpt from "Knee-Jerk Selling" November 26, 1990

"But watch out. This bear may still have a way to go, particularly in the biggest stocks that haven't suffered nearly as much or for as long. And there will be plenty of market-depressing tax-loss selling. (Folks who do tax-loss selling have not thought through the poor math of it, but that doesn't stop them.) But before 1990 ends, I want to be fully invested for the next bull market."

- excerpt from "It Kinda Sneaked Up On Us" October 29, 1990

"The same buy-small, think-big principle applies to the stock market: The real money is rarely made in buying premium-priced stocks-and the rule will apply even more in the 1990s than in recent decades. The really big opportunities in the 1990s market will be in smaller-capitalization stocks, where the companies have huge opportunities ahead, opportunities not yet capitalized in the price of the stock."

- excerpt from "Buy Small, Think Big" October 22, 1990

"Value stocks show their defensive strength in the late stages of a bear market, not in the early stages. Investors make the mistake of presuming that what is true point-to-point-from peak to trough-also occurs steadily en route. Untrue. Markets are wicked. They love to deceive."

- excerpt from "Right Around the Corner" October 15, 1990

"Watch out, though, for excessively high growth rates. They are almost always unsustainable. I never invest in firms that try to grow at more than 30% per year. I prefer a 20% growth plan, or even a 15% or 10% growth plan, properly priced to a 30% growth plan-because with extremely high growth goals you take on the double risk that both the growth does not occur and the company actually gets into serious difficulty trying to stretch beyond its capabilities."

- excerpt from "Growth or Value?" August 6, 1990

"Society has become too quantitative lately in all aspects, but particularly in stock analysis. The real value added in the 1990s will be in qualitative stock selection...Yes, numbers still matter. But I think we will soon return to a time when Wall Street relearns an appreciation for the two 'Ps'-quality in management people and strategic position. Quality, not quantity."

- excerpt from "Dad, You Were Right" July 23, 1990

"What should an investor do? My advice right now is: Wait. Despite the recent all-time highs in the Dow Jones industrials, most American stocks are nicely below their October peaks. I think we are early in a major global bear market. It's too soon to buy yet."

- excerpt from "Don't Sell America Short" June 11, 1990

"All this leads me to think the 1990s will see more focus on and interest in smaller, more midsize American stocks. The mania that exists now for foreign stocks will fade, choked by interest rates and deteriorating fundamentals. America will be the place to be. But our big-cap stocks had their run in the 1980s, and we will rediscover how good mid-America really is. For all my optimism about America's long-term future, I'd hold off on buying until the current bear market, which is still young, has run its course."

- excerpt from "America's Decade" April 16, 1990

"The history of headlines clearly shows that any consensus ends up being wrong. Headlines as 1989 ended said that just as the 1980s was the decade of Japan, the 1990s will be Europe's decade. So I bet not. A major theme I will harp on in columns this year is that the 1990s will again be America's era."

- excerpt from "Backwater Bargains" March 19, 1990

"In the long term, America and the stock market have a wonderful future. As history is my guide, things clearly get better over the generations...But that doesn't mean there will not continue to be cyclical swings. Since September I have been looking for a downswing in the market, a mild recession here and a rougher one overseas. It's clear to me that both have already started."

- excerpt from "A Sitting Bull" February 19, 1990

"Don't be too heartened by all the year-end, no-recession forecasts you see from economists. As a group, economists have never seen recessions coming...So, here goes my own, seat-of-the-pants, count-the-customers, watch-the-parking-lots forecast: We started a recession about May, and it won't be generally recognized until about next May."

- excerpt from "It's Here, Folks" January 22, 1990

"The world was busy in 1989. The Soviets fled Afghanistan after nine years of occupation. In Europe, the Berlin Wall came crashing down (figuratively and literally). In China, students clashed with tanks in Tiananmen Square. Americans viewed their first Seinfeld episode. Researchers at the University of Utah claimed to have achieved cold fusion, possibly solving the world's energy problems. (They didn't.) The 7.1 magnitude Loma Prieta earthquake rocked Northern California. And the US Savings & Loan crisis was hitting a crescendo, with hundreds of thrifts going under."

- from Chapter 6, THE END IS NIGH
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

"The S&P 500 soared 31.7%, walloping foreign shares (although foreign was up a decent 17.2%).1 US stocks went nearly straight up until a 6.1% drop in the S&P 500 on October 13.2 But the major indexes quickly regained their upward momentum, finishing the year just shy of the year high."

- from Chapter 6, THE END IS NIGH
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

1. Global Financial Data.
2. Ibid.

"I am usually a very patient, long-term holder of unpopular stocks of what I see as good companies. But if I'm right on this downturn, the only stocks that won't be pounded in 1990 I those few that are free from normal economic vagaries. There aren't many. Cyclical stocks-and most stocks are cyclical-are going to be hurt."

- excerpt from "Early Casualties" December 25, 1989

"Following October's decline it is wise to note that 1) a month doesn't make a market, and 2) the history of Octobers is a portrait in abnormally violent and often out-of-phase declines. The next few months should be kinder. Does this mean I am abandoning the bear market call I made in my September 18 column direly titled "The End Is Nigh"? No. I am basically bearish, but if the market kept falling at October's rate it would be worth absolutely nothing at all by year-end 1990. Not too likely. More likely is a bear market that starts with slumps, followed by persuasive recoveries and more slumps."

- excerpt from "What You're Not Reading About" November 27, 1989

"In a nutshell, a balance sheet shows what a firm has bought, and how everything was paid for. All that wasn't paid for by floating stock or retaining earnings was paid for by borrowing-and that means extra risk. To put that risk in context, I look first at equity as a percentage of total assets. The higher that ratio, the less the risk. Ideally it should be about 50% or higher. The lower it is, the more I worry."

- excerpt from "Three Easy Steps" October 30, 1989

"Since my forecast last month of tougher times ahead, the stock market dropped 3%, junk bonds recoiled from their worst-ever shake-out and foreign money markets marched to even higher rates and more steeply inverted yield curves. But, no, this is not Armageddon. The bear market I predicted in my September 18 column will probably be a painfully slow, gradually sinking affair, not an Oct. 19, 1987-like panic."

- excerpt from "The Quiet Bear" October 16, 1989

"A good many analysts have become more bullish with the market hitting its all-time high, but I see a peak. As I write, the market's momentum is clearly upward, but warning flags are flying for this bull market's death, and soon. Bulls correctly note that major bull markets don't end without speculation, and they haven't seen it yet. But I do. Optimism is back in the air."

- excerpt from "The End Is Nigh" September 18, 1989

"Stocks that have the "S" factor can make you big money. The big swings in stocks come when most folks are surprised, either for good or bad.... Look for whopping surprises, which by definition are the kind few people expect. But stick with stocks so cheap that if the surprises don't work out, you could make money anyway."

- excerpt from "The "S" Factor" August 21, 1989

"Which foreign stock market is the best bet now? None. I say stick with the American...What all this nonsense about U.S. weakness overlooks is that we Americans are far and away the world's best marketers. No one else comes close. The marketing feature that distinguishes us, and gets too little press, is the Yankee merchant's ability to anticipate markets and innovate based on market feedback. In a capitalistic world, innovation is the only real future."

- excerpt from "Right Under Your Nose" July 24, 1989

"Where do bargain stocks hide? Try Siloam Springs, Arkansas, or Belpre, Ohio. Why? Wall Street has a perverse tendency to bypass firms that serve primarily out-of-the-way little towns. There are stocks of good companies tucked away in places-maybe up to 30,000 in population-you or I rarely hear of, but the firms are doing good business, growing and, best of all, selling for cheap."

- excerpt from "Big Fish in Small Ponds" June 26, 1989

"Now is the time to buy defense stocks-when no one wants them. Sure, defense spending will be hammered by all the forces you hear about-primarily federal budget deficit pressures and the public's new view of less need for spending because of the Russians' recent dovish cooings. But these stocks have overdiscounted the bad news. They are much too cheap."

- excerpt from "Buy 'Em When They're Not Hot" May 29, 1989

"Acquisition binges that shrink the number of players in an industry, and thereby the competition, allow for vastly more profits for the survivors. It's almost surefire."

- excerpt from "Few Is More" May 1, 1989

"Leafing through my columns of recent years you might think I love takeovers. Not so. I have had more than my share, but I have come to hate them. While they may give a quick boost to the coffers, they eventually make a money manager's life miserable. More important, takeovers defy the most basic precept of portfolio management."

- excerpt from "I Call Them "Takeways"" April 3, 1989

"Names like Coke, Revlon and IBM are obviously golden. But there are oodles of smaller, still substantial, midsize companies that own strong brand names. Why bother to seek them out? Most consumers will pay a premium in the store to buy a name they trust rather than buy an unknown imitator. In that premium is an advantage for the name's owner. The stronger the name, the stronger the edge. Strong brand names tend to have staying power-for decades or longer."

- excerpt from "All in a Name" March 6, 1989

"With an unpopular and depressed stock like Fleetwood, selling at 35% of sales, ten times earnings and a discount to the market's price to book, not only does Main Street feedback demonstrate industry dominance and real value, but it also gives you comfort to hold on for the long haul, where the big gains come."

- excerpt from "Security Analysis Updated" February 6, 1989

"Most investment research-then and now-is done by reading reports and talking to the company in question. Quantitative and computer-driven analyses have been steadily on the rise. But depending on numbers without knowing something of what lies behind them can leave you vulnerable to surprises."

- excerpt from "Getting the Lowdown" January 9, 1989

"1988 offered a few distractions from the Black Monday hangover. One major part of the world was rapidly changing. In the USSR, Mikhail Gorbachev was implementing dramatic social economic reforms known as 'perestroika'-a first step in the dismantling of the Soviet Union. In the US, George H. W. Bush bested Republican contenders, including Bob Dole and televangelist Pat Robertson, to win the presidential nomination and eventually the presidency over Democrat Michael Dukakis. Sports offered some memorable moments as well. Hobbled Dodger Kirk Gibson hit his dramatic bottom-of-the-ninth-inning homerun to win game one of the World Series. Still, all the distractions in the world weren't enough to make folks forget the stock market crash."

- from Chapter 5, EAR TO THE GROUND
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

"Ken thought stocks would rise in 1988, but was fairly cautious on the market overall. The S&P 500 rose 16.6%-better than the long-term average but below the bull market average of about 22% per year.1 Foreign stocks again beat US stocks, rising 28.6%.2 But it was a choppy year of fits and starts for the market. The S&P 500 experienced a 6.8% drop in a single day in January and several other similarly-sized pullbacks throughout the year.3"

- from Chapter 5, EAR TO THE GROUND
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

1. Global Financial Data.
2. Ibid.
3. See Note 1.

"My advice is: Check every stock you own to make sure this year's footnotes don't catch you by surprise when the new annuals come out in the spring."

- excerpt from "Unburying the Footnotes" December 12, 1988

"...You shouldn't turn your back on potential investments in stocks of medium-size firms that are well run by folks with a big stake that parallels your best interests. That's where the future Wal-Marts will come from. Of course, all the traditional investment rules still apply. Manager-ownership alone certainly doesn't insure success."

- excerpt from "Ownership Counts" November 14, 1988

"Fear is highest around market bottoms, when it's the best time to buy. But they won't be able to. The essence of money management is weighing possibilities against probabilities and going against your gut...If I am bearish, I think the odds are greatest for stocks to fall. But that doesn't mean they will. Anything can happen. So despite what I may fear as the highest probability, I don't sell out completely. I protect myself from my own foolish inclinations so that if I'm wrong my portfolio won't suffer too much."

- excerpt from "Anything That Can Happen…Probably Will" October 24, 1988

"Unless you think you're the next Ben Graham or John Templeton, think five times before buying any stock with lots of complicated footnotes. The more of them and the more complicated, the more trouble you will have distinguishing the phoney from the merely complex."

- excerpt from "If It's Too Complicated, Forget It" October 3, 1988

"So, until the liquidity picture clears, I am reluctant to put further funds in stocks. There may well be a snap-back rally in the next few weeks as the hysteria over the Fed's feeble action passes, but I would use such a rally to seek liquidity."

- excerpt from "Too Little, Too Late" September 5, 1988

"The years since have again and again shown me the wisdom of his advice. The back of the report, the footnotes, is where they hide the bad stuff they didn't want to disclose, but had to. Whether it's in a limited partnership, an initial public stock offering prospectus or just an annual report, they bury the bodies where the fewest folks find them-in the fine print."

- excerpt from "Thanks, Dad" August 8, 1988

"Was the June rally for real? Is the market finally coming out of the doldrums? I wouldn't bet on it. But I wouldn't exactly expect the market to drop either. It seems to me that the market is trapped. It appears to be blocked on the high end by excessive valuations and high and rising interest rates that will put pressure against truly big gains. It is unlikely to fall far and fast because investor sentiment is so extremely negative."

- excerpt from "Three Stocks for a Dull Market" July 11, 1988

- excerpt from "Technology Made Easy (N/A)" June 27, 1988

"You probably are going to continue owning some stocks even though you fear a bear market. What kind of stocks should they be? By my thinking, they should be dirt cheap and have high relative market share in their industries."

- excerpt from "Stormy Weather Stocks" June 13, 1988

"All told, I am confused. Investment sentiment, being negative, suggests stocks should rise, but a big advance would get stocks awfully overvalued. A recession from here could drop stocks another 40%-plus by late 1989. Being confused, here is how I am structuring my portfolios: 25% big-cap stocks, 25% secondaries, 50% cash-and waiting and watching."

- excerpt from "Frankly, I Am Confused" May 16, 1988

"If what we are seeing is just a counter-trend rally-as I envision-you need to plan to sell soon, which brings up the question of how far this rally can go...This peak will almost certainly be a relatively quiet six-to-eight-week event in which stocks fall ever so gently."

- excerpt from "And the Last Shall Be First" April 25, 1988

"Each year I am one of the few Americans who actually read a little $11, one-inch-thick mind-calmer called Budget of the U.S. Government...While the plot is thin, you will be amazed. Read it. It reveals to me that there isn't really any federal debt crisis-the federal deficit doesn't really exist if you count it right-and Uncle Sam is superrich."

- excerpt from "By the Book" April 4, 1988

"How long will the rally last? I don't know-maybe until April or May. As I have said for months, we are in what seems like a major countertrend rally to a several-yearlong bear market. En route we should have a rather regular but big recession. The world won't come to an end. And 1988's best investment results will come to those who are nimble at holding and knowing how and when to sell."

- excerpt from "The Quiet Bull" March 7, 1988

"No, the sky is not falling. But, as I have said before, we entered a bear market in August that will most likely last until late 1989. With it will come a recession, starting maybe in the summer. But this will not be the end of the world. In magnitude and style this event will be much like most other cycles we have faced before."

- excerpt from "Tighten Up, But Don't Panic" February 8, 1988

"Since the crash, most economists have been chanting, 'No recession ahead.' The media have echoed the message...A Wall Street Journal survey of 40 leading economists shows 37 calling for no recession in 1988. It is fashionable to joke, 'The stock market forecast nine of the last seven recessions.' I disagree with this consensus. As usual, the economists don't understand the economy."

- excerpt from "The Coming Recession" January 11, 1988

Margaret Thatcher is elected Prime Minister for a third time, the Dow Jones Industrial Average closes above 2,500 for the first time, on Black Monday world markets fall sharply, and the Israeli-Pakistan conflict escalates. "Interest rates were also on the rise. The 10-year US Treasuries yielded about 7% when 1987 began. In October, they peaked above 10%. And it wasn’t just the US. Interest rates were rising worldwide. Ken viewed these rising rates as a sign of scarce liquidity."

- from Chapter 4, "CRASH!"
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

"1987 started out like any other year in a raging bull market. It wouldn’t end the same way. The S&P 500 jumped 1.8% on the first trading day and didn’t look back. By the end of January, it was 14% higher. By the end of February, the S&P 500 was up 18%. Then 21% by March’s end. On August 31, the S&P 500 was up a whopping 39% year to date....From the market peak in August through October 5th, the S&P 500 was down a modest 2.4%.1 But the orderly retreat wouldn’t last long. The bear market started to pick upgather steam...On Monday, October 19, stocks plummeted. The selling started in Asian markets. The Nikkei 225 index in Japan fell 14.9%. Hong Kong’s Hang Seng Index dropped 11.1%. In Australia, the All Ordinaries Index lost 25.0%. Selling spread to Europe. Germany’s DAX index lost 9.4%. France’s CAC lost 9.6%."

And in the UK, the FTSE 100 slid 10.8%.2 By the time US markets were set to open, sell orders for many stocks overwhelmed buy orders. Many stocks didn’t begin trading until well after the market opened. By the end of the day, the S&P 500 was down over 20%.3"

- from Chapter 4, "CRASH!"
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

1. Ibid.
2. Bloomberg Finance, L.P.
3. Global Financial Data.

"As history is my guide, stock prices should move higher through the spring. Then they should drift lower for a very long time. In this prediction I differ from most money managers. Since Meltdown Monday most forecasts call for either straight down or a rebound to new highs in 1988 or 1989. To me, both possibilities are unlikely."

- excerpt from "The 2% Rule" December 14, 1987

"Every stock in this column is fundamentally too cheap, by a wide margin, and is a long-term value. This must be a time to buy. But I learned that no matter how well you are trained, how smart you think you are, how good your game plan is and how many advantages you may have, when a freight train is coming, get off the tracks."

- excerpt from "Diary of a Money Manager" November 16, 1987

"My basic technique for identifying stocks with an unfair advantage is through price/sales ratios and price/earnings ratios...Right now the market, depending on exactly which measure you use of it, sells for between 85% and 100% of its underlying revenues-a price/sales ratio of 85 cents to $1. That's rich for me: I want to stay with stocks selling at less than half that-and/or less than half the market's current P/E of 20."

- excerpt from "How to Take - and Keep - Unfair Advantage" October 26, 1987

"But rapid growth over the next few years is unlikely. This boom, which started in 1982, has just now become the longest continuous economic expansion in history. Along the way we have built unrealistically high expectations into our economy...We will have a recession in the next year or so, and it will be a lot like others we have had. And along in there somewhere, stocks will fall, because there is a liquidity shortage and because the earnings yield on stocks is very low relative to bond yields."

- excerpt from "Double Damned" October 5, 1987

"Some folks say bull markets don't end without a heavy speculative phase, and that this market's bubble hasn't happened yet. Maybe. But to see a speculative mania today, you need only look at the mutual funds. First, there are too many funds. There are more mutual funds than stocks on the New York Stock Exchange."

- excerpt from "Fair Weather Genius" September 7, 1987

"The 100 companies that began the year with the largest market caps climbed 28%. So it has been an aberrational period. But will big continue to be beautiful? I doubt it. There is so much more value among the medium-cap stocks today-those with total values of between $100 million and $1.5 billion."

- excerpt from "Medium Is Beautiful" August 24, 1987

"When you buy any stock, preferred or not, the potential loss is 100%. Without the prospect of making at least several times that with a particular investment, the reward-to-risk ratio isn't high enough. This same principle underscores why I have been bearishly biased against some of the supposedly safest common stocks, like the Baby Bells-and virtually all regulated utilities-because the potential returns are too low relative to the potential losses. The politically driven regulatory process gyps you of any big upside, but provides no real protection from financial disaster."

- excerpt from "Will Rogers Was Right" August 10, 1987

"Good money management starts with sticking to a good long-term strategy. That doesn't mean rigidity and inflexibility. But, then again, it doesn't mean jumping into stocks to chase rising prices—and jumping out at the first sign of crisis."

- excerpt from "What Goes Up..." June 15, 1987

"...If you haven't lost touch with reality and if 8% to 15% with safety still sounds sensible to you, I have a suggestion: Take a look at convertible bonds. Not all convertible bonds. Buy convertibles where the premium to investment value is small or nonexistent."

- excerpt from "15% With Little Risk" May 18, 1987

"It's the hidden transaction costs that kill short-term traders, particularly short-term bargain hunters. I'm not just talking about brokerage commissions. Precious few folks think in terms of the spread between a stock's bid and ask prices. Most investors hear that a stock is 22 and think they could buy or sell it for that. They can't. You can only sell to bids, and buy offerings (aka the ask price)."

- excerpt from "Spread on Thick" April 27, 1987

"Don't let yourself be mesmerized by prophecies and prophets, especially in this ebullient 1987, where fools are making fortunes. Stop worrying about where the Dow is going, and when, and keep looking for stocks that are true holds with underlying value and depressed prices."

- excerpt from "Bull in Bull Markets" April 6, 1987

"In all of my columns I have recommended only seven DJIA stocks—ever. The first six were in my January 28, 1985 column. Those six—Goodyear, Woolworth, Union Carbide, General Foods, Owens-Illinois and Du Pont—did so well that they provided more than 75% of the DJIA's total 1985 return."

- excerpt from "Betting on the Dow - Partly" March 9, 1987

"Maybe I'm a 36-year-old fogy, but I can't get myself to buy based on a bull market. I can only do it the way we did it back in the static markets of the 1970s. We tried to buy things you were content to hold, whether the market rose or fell. The way I learned it, the really big moves for a stock come from the differences between what Wall Street thinks a company is and what it really is...When an outfit is better than Wall Street thinks it is, the market pays up, via a higher price. Likewise, when expectations for a firm exceed reality, the stock falls in proportion to the gap."

- excerpt from "Back to Basics" February 9, 1987

"What do you buy in a market that's up 150% in four years, while average P/E multiples have risen from 7 to 19? Why not try shopping among the stocks that have fallen amidst the rise? While the bull market has been broad and powerful, and most stocks are now far from cheap by any reasonable historical basis, there are a good many that have fallen through the cracks, and that's where the best opportunities for the next two to three years lay hidden...Why take the risk of buying stocks that are down so badly? Where else in a heady upmarket can you still bag a bargain?"

- excerpt from "Bag a Bargain" January 12, 1987

"The year began tragically as the space shuttle Challenger, carrying schoolteacher Christa McAuliffe, exploded shortly after takeoff. Just a few months later, the Chernobyl nuclear power plant disaster rocked Eastern Europe and the world. In the US, as 1986 was winding down, the Iran-Contra Affair was making headlines-a scandal threatening to make it all the way to the Office of the President."

- from Chapter 3, "GLOBAL-DY GOOK"
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

"Turns out, 1986 was a year of very, very bad news. Not so much for stocks. Stocks did well in 1986, especially overseas. The S&P 500's 18.7% gain seemed paltry compared to the 42.8% gain in global shares.1"

- from Chapter 3, "GLOBAL-DY GOOK"
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

1. Global Financial Data.

"So when this aging bull market someday goes bust, the billions that have been poured into overseas markets will go bust even worse-pretty much the way the speculative over-the-counter market usually rises a lot more than the New York Stock Exchange during a bull market, but then falls more freely in a bear market, too."

- excerpt from "Greener Grass?" December 15, 1986

"You have seen the syndrome. An outfit reports good profits and seems reasonably priced on the basis of those earnings, but the stock keeps dribbling downward, even as the outfit announces another quarter of good earnings. Six months later the blood-red ink gushes forth. The stock collapses. Was somebody hiding something? In many cases the answer is yes. Management was hiding declining earnings. Hiding them how? With inventories, receivables and the like, a sure sign is a deteriorating balance sheet."

- excerpt from "Smoke, Mirrors and Suckers" November 17, 1986

"An important key to driving is knowing where the road leads. So, instead of recommending stocks this issue, I suggest you buy a financial calculator and learn to use it. My favorite is the Casio BF-100, which costs about $30-less than the commission on a stock trade. It will help you navigate what's possible and what's not better than any investment guru's crystal ball."

- excerpt from "Pipe Dreams" October 27, 1986

"When you get events like last month's 80-plus point, one-day crash in the Dow on record volume, people panic. But don't let mass hysteria throw you off course from a sound long-term investment program. The most severe and real problem for most investors should be finding stocks with real value-particularly so in a market that is up 130% in four years. Stick to unpopular stocks of good companies."

- excerpt from "Chapter 2, A 30% YAWNER" October 6, 1986

"Be comfortable and conservative but not conventional. Conventional means going with the fads and following the in-crowd hotshots, who will lead you to disaster. Why try to double your money in a year with horrendous risk when an achievable long-term return will make you rich without exposing you to potential poverty?"

- excerpt from "Be Conservative, Not Conventional" September 22, 1986

"Why not just conclude that the market is too high and pitch everything? Remember, no one successfully times the market. Just as important, the few stocks that meet tough buy criteria are worth holding-even in a down market."

- excerpt from "Sell? Or Hold?" August 25, 1986

"But first off, the market is way up, yet hardly a peep is heard about how the Senate's tax bill butchers business and investor interests. There's the near unanimity that interest rates will fall-when you and I know that whatever everyone expects to happen won't. Scary? Add it up and it's time to decide whether the stocks you own are stocks you would buy today if you were starting fresh."

- excerpt from "A Time to Buy, a Time to Sell" July 28, 1986

"As I found out in a recent study...most big-time winners come from unappreciated and underdiscovered medium-cap stocks of big companies-the kind that institutional investors can adopt when improvements unfold just right. Few come from the micro-cap world because micro-caps are too illiquid for institutional investors to buy. Without the institutions wading in, you don't get enough 'greater fools' willing to bid them up to crazy valuations and maximize previous holders' returns."

- excerpt from "Lessons From My Losses" June 30, 1986

"Beta is a simple and, by itself, harmless concept. It is also useless. A stock's beta is a number representing its past volatility relative to the overall market. The higher a stock's past volatility, the higher is its beta. If a stock's volatility perfectly matched the market, its beta is 1.0. So far, so good. Also, so what?"

- excerpt from "Witch Doctors" June 3, 1986

"Of course, you need more than unpopularity as measured by PSRs to make a winner. You need quality, too-but PSRs are the way to start your search...Once you have a list of unpopular stocks, of course, it still takes lots of labor to determine which are good companies and which are good grief. But to find the winners you have to start looking among the unpopular."

- excerpt from "Ready-to-Go" May 5, 1986

"In case no one has told you, this market is high. Using many valuation methods, it's higher now than it has been in about 70 of the last 85 years...No, I am not predicting a decline. No one can outguess the market's short-term moves with regular success. But I do predict that good stock selection will be a lot more important in the next year than it was last year. The easy money is over."

- excerpt from "Bombs Away" April 21, 1986

"So, here's the trick. Buy unpopular, undervalued stocks of good companies, ones with market caps that are low in relation to the company's size and a tad too low for the big-buck boys to ponder...As more folks like you spot the bargain, they will buy it, too, along with the outfit's customers, competitors, suppliers and hometown enthusiasts. The good news is that as these buyers push the market cap up enough for megabuck managers to take notice, it will still be cheap enough for the institutional Goliaths to jump on the bandwagon without breaking its wheels-and take you along for a pleasant ride."

- excerpt from "Rigged" March 24, 1986

"The lesson? Remember, when mania prevails, sanity cannot be too far behind. Stick to value and simplicity and you can make money when others succumb to hysteria. Afraid your friends and loved ones will think you are crazy for buying Texaco? Buy it, but keep quiet."

- excerpt from "The Case for Madness" February 24, 1986

"Almost a mirror image of 1984, 1985 was a humdrum year with stellar stock market returns. Sure, 1985 saw the Plaza Accord signed by the US, UK, France, West Germany, and Japan to stem the rise in the US dollar. Microsoft released Windows 1.0. And New Coke launched, then thudded. But global events were generally mundane..."

"But global events were generally mundane-except stocks. Stocks like boring because it means there's less for investors to worry about-as evidenced by this boring year with a big 31.7% S&P 500 return.1 Even those outsized gains were bested by foreign shares-rising over 50%.2 That made one of Ken’s main 1985 themes fitting: Keep investing simple."

1. Global Financial Data
2. Ibid.

"Simple but proven methods let you avoid getting overrefined or too cute for your own good. To sum up: Diversify, buy long term, buy strong balance sheets and buy unpopular, low-PSR stocks."

- excerpt from "Keep Your Worms Warm" December 30, 1985

"When you hear a bold promise, shy away. You will save the direct cost of the advice, the disastrous indirect cost of following the advice and the pain of discovering you have been duped. The professionals who really perform well don't make outrageous claims and don't offer their services for $42 a year."

- excerpt from "Modesty Is the Best Policy" December 2, 1985

"Just as bargain books don't have colorful spines that jump out at you, the best stocks don't announce themselves either. You have to train your eye to look for the ones others ignore. At book sales I never know what I will find-maybe nothing. The stock market is just that way. When you find a bargain, buy it. If you don't find one, hang on to your money and keep looking. You needn't buy something merely to buy. That's foolhardy. Come back tomorrow. Or the day after."

- excerpt from "Half-Buck Bargains" November 4, 1985

"Here is the key to why stocks have done better than other investments through the decades. As the world changes, gold doesn’t change, bonds don’t change, real estate changes hardly at all. But a company can and must evolve, little bits at a time, year to year, forever—or die. If it can evolve to conform to a changing world, it will prosper and grow. The more successfully it evolves, the faster it grows."

- excerpt from "Emulating America's Richest" October 28, 1985

"Investing is pretty much the same-particularly since many folks feel as if they are shooting in the dark, too. Hence tripod pricing. Your stock purchases should be balanced securely on three basic pricing "pods": Don't pay high prices in relation to earnings, book value or, my favorite, to the company's sales size."

- excerpt from "How to Shoot in the Dark, Safely" October 7, 1985

"Folks often buy stocks without understanding what they are buying and end up sorry later. My July 1 column highlighted three fatal factors that predetermine investment disasters: overpaying, overtrading and, just as important, failing to understand what you buy. A stock is nothing more than fractional ownership of a business. If you don't understand the business' basic nature, you are flying blind."

- excerpt from "How to Get the Real Lowdown" September 16, 1985

"If you want to hold on to your money, you could do worse than developing the habit of holding on to your stocks. A long-term orientation may sound stodgy, but it is as important to investment success as picking stocks or pricing them. My last column highlighted what I call investing's three fatal factors that make or break results. They are: Understand what you buy; don't pay too much for it; and, just as important, hold on for the long term."

- excerpt from "Where Are They Hiding?" August 26, 1985

"From the coverage, you would think the recently announced alliance of IBM with MCI is the greatest thing for both sides since sliced microchips. It looks to me as if IBM has cut itself a very fine deal. Not so for MCI; the deal renders MCI extremely vulnerable."

- excerpt from "IBM Drove a Tough Bargain" July 29, 1985

"In a nutshell, I will argue for buying unpopular stocks of good companies. This is the simplest kind of investing to understand-too simple for some folks. Because these stocks are unpopular, their prices are depressed. You get value. Because they are good companies, you can comfortably hold them for a few years or longer. With time, their quality will be more widely recognized and the stocks will become more popular. As that happens, the stocks go up. It's that simple."

- excerpt from "Don't Be Too Smart for Your Own Good" July 1, 1985

"Would you like to learn firsthand from the greatest investors of all time? It's easy. Read their books...You can gain some great investment savvy from books, too."

- excerpt from "Gifts of the Gurus" June 3, 1985

"Sometimes there are two chances for investors-one in bankruptcy and one right after bankruptcy. Again, like leprosy, bankruptcy's aura is so strong that it lingers after the event has passed, providing for after-the-fact bargains. Often you can buy a preferred stock or bond that is convertible into common stock. This has been a traditional way to reduce risk while trading off only part of the upside potential. It works."

- excerpt from "Bankruptcy Bargains" May 20, 1985

"From Seattle to Tampa, from Boston to Los Angeles, without doubt, there are better research facilities in any medium-size or larger city library than in most brokerage firms. Of course, you have to be willing to spend time and effort at it, but the information is there to make you an informed investor. And it's free."

- excerpt from "Follow the Wino's Lead" April 22, 1985

"PSRs measure popularity. 'How much will the market pay for a dollar of sales of this company?' If it will pay a lot, it thinks well of the company; the stock is popular-rightly or wrongly. If the market won't pay much, it's unpopular. High-PSR stocks are already too popular and pricey to perform well, even if the companies do exceptionally well."

- excerpt from "Look Out Below" March 25, 1985

"The point is to buy unpopular stocks of sound, well-financed and fundamentally strong companies-regardless of size. Slowly their quality will be seen by others, and their popularity will rise-and with it the stock price. Additionally, with small cap stocks, you can avoid the up-and-down volatility of the stocks that are subject to institutional stampedes in and out."

- excerpt from "Pint-Size Powerhouses" February 25, 1985

"Forget all that juicy Wall Street gossip about these goliaths. It's already in the stock prices. Instead, keep things simple and a bit more in the here and now. If you buy depressed, unpopular stocks with a lot of value, in time, prices will rise to match-even if short-term profitability isn't robust...My favorite approach is buying financially strong companies selling at low price/sales ratios (aka PSRs-the price divided by revenue per share)."

- excerpt from "Big Companies, Fragile Stocks" January 28, 1985

"1984 was quite a year. Fortunately, it didn't involve nearly as much government oppression or book burning as George Orwell’s 1984 foretold, but it was eventful nonetheless. Ronald Reagan trounced Walter Mondale to secure his second term as President, the Cold War was in full swing, the Olympics were in Los Angeles sans the Russians and many of their comrades, and Larry Bird’s Boston Celtics defeated Magic Johnson’s Los Angeles Lakers to win the NBA finals."

- from Chapter 1, "A NOT SO ORWELLIAN YEAR"
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

From an investing standpoint, 1984 was a bit of a bore. In the US, the S&P 500 was up a paltry 6.3%. 1 Global stocks were up by a similarly small amount, rising just 5.8%-both well below their long-term averages. 2 1984 oil prices were still elevated relatively, but were trending downward from their 1980 peak. And you could still buy a US government bond with a double digit yield-though those too were falling.

- from Chapter 1, "A NOT SO ORWELLIAN YEAR"
The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

1. Through 12/31/2009. Performance is hypothetical and reflects Forbes magazine's calculation of simulated trades based on Ken Fisher’s Forbes picks in Forbes magazine versus the S&P 500 Index during the same period.  The hypothetical performance is based on transactions not made and is not an indication of actual performance by Ken Fisher or Fisher Investments.  Forbes’ calculation methodology is based solely on calendar years and assumes readers buy $10,000 of each Ken Fisher stock pick published in Forbes and immediately subtracts a 1% hypothetical brokerage commission.  That is compared to putting $10,000 into an S&P500 Index fund at the same date with no hypothetical commission and no other fees.  Hypothetical performance does not include the impact of taxes or any other costs, if any. "For example, in 2004 Ken Fisher recommended 51 stocks in Forbes throughout the year.  If $10,000 had been put into each stock the total invested would have been $510,000, which would have appreciated by year end 2004 to $574,000, a 12.6% appreciation.  The same amount of money invested in the S&P 500 Index at those various times without a hypothetical commission would have totaled $548,000 for a return of 7.6% at the end of 2004.  Using this methodology Ken Fisher’s Forbes stock picks tied the S&P 500 in 1998, lagged it in 1997, 2002 and 2008, beat it in 1996, 1999-2001, 2003-2007, and 2009 and overall beat it by an average annualized 5.31% for calendar years 1996 through 2009. Past performance is no assurance of future returns. Investing in securities involves the risk of loss.
2. Ibid.

"There is a pattern to a stock's action prior to bankruptcy. For months the stock moves slowly lower. Then one day a not too significant announcement will drop the stock about 30% to 50% within the day. At that point, caution is preferable to courage. A few days or weeks later comes the bankruptcy announcement, which tumbles the stock one more 30%-to-50% notch. From there it goes nowhere for months or maybe years."

- excerpt from "Big Bloopers of 1984" December 31, 1984

"Investing in regional segmentation offers additional advantages for individual investors. You can check them out at home. What are the kids lining up for in your area? What burgeoning local products have you been buying that didn't exist five years ago? No New York-based security analyst is likely to beat you to such bargains."

- excerpt from "How to Cash In on Winners" December 3, 1984

"With [US] institutionalized skepticism so thick, any good news on the federal spending front from a president freed of short-term constraints is apt to catch the investment pros by surprise, pushing up stocks in a longer and more violent buying spree than the August 1982 or 1984 rallies. I wouldn't be surprised to see the DJI at 2200 by 1989."

- excerpt from "Blind Pessimism" November 5, 1984

"You make the most money with the least risk in small, well-managed companies aimed at big, fast-growing markets." Right? Wrong. Long-term risk/reward is maximized by investing in companies aimed at markets appropriate to their size. Small companies should address small markets. Big companies should address big markets. Rarely should the two meet."

- excerpt from "The Lion and the Mouse" October 8, 1984

"Leading-edge technology is not critical to successful investing. Certainly appropriate technology is needed; you can't sell buggy whips. But the really critical factors are not technological. The critical factors are a low stock price and good marketing."

- excerpt from "High-Tech Checklist" September 10, 1984

"The uncanny degree to which successful intermediate-to long-term performers come from the ranks of low PSR (price-to-sales ratio) stocks bothers some investors because it seems to have nothing to do with earnings, which everyone has been trained to accept as the driving force behind a stock's price."

- excerpt from "Why Glamour Doesn’t Pay" August 13, 1984

"I specialize in out-of-favor small cap growth companies, which means, by definition, ones with problems. They can be good buys if those problems can be solved."

- excerpt from "Cherchez the Sales Rep" July 16, 1984