Preface ix Acknowledgments xix 1 Question One: What Do You Believe That Is Actually False? 1 If You Knew It Was Wrong, You Wouldn't Believe It 1 The Mythological Correlation 8 Always Look at It Differently 15 When You Are Really, Really Wrong 21 2 Question Two: What Can You Fathom That Others Find Unfathomable? 31 Fathoming the Unfathomable 31 Ignore the Rock in the Bushes 32 Discounting the Media Machine and Advanced Fad Avoidance 33 The Shocking Truth About Yield Curves 38 What the Yield Curve Is Trying to Tell You 49 The Presidential Term Cycle 57 3 Question Three: What the Heck Is My Brain Doing to Blindside Me Now? 67 It's Not Your Fault Blame Evolution 67 Cracking the Stone Age Code Pride and Regret 72 The Great Humiliator's Favorite Tricks 85 Get Your Head Out of the Cave 87 4 Capital Markets Technology 95 Building and Putting Capital Markets Technology Into Practice 95 It s Good While It Lasts 100 Forecast With Accuracy, Not Like a Professional 105 Better Living Through Global Benchmarking 113 5 When There s No There, There! 131 Johns Hopkins, My Grampa, Life Lessons and Pulling a Gertrude 131 In the Center Ring Oil Versus Stocks 136 Sell in May Because the January Effect Will Dampen Your Santa Claus Rally Unless There Is a Witching Effect 148 6 No, It s Just The Opposite 155 When You Are Wrong Really, Really, Really Wrong 155 Multiplier Effects and the Heroin-Addicted iPod Borrower 163 Let s Trade This Defi cit for That One 170 The New Gold Standard 175 7 Shocking But True 185 Supply and Demand . . . and That's It 185 Weak Dollar, Strong Dollar What Does It Matter? 200 8 The Great Humiliator and Your Stone Age Brain 213 That Predictable Market 213 Anatomy of a Bubble 221 Some Basic Bear Rules 229 What Causes a Bear Market? 244 9 Putting It All Together 251 Stick With Your Strategy and Stick It to Him 251 Four Rules That Count 257 Finally! How to Pick Stocks That Only Win 274 When the Heck Do You Sell? 281 Conclusion: Time to Say Goodbye 289 Transformationalism 290 Appendix A: Causal Correlations and the Correlation Coeffi cient 295 Appendix B: News You Can t Use 299 Appendix C: Greater Fools 301 Appendix D: I Hate Funds 303 Appendix E: Annualized Versus Average 307 Appendix F: The Wizard of Oz and an OZ of Gold 309 Appendix G: 1980 Revisited 313 Appendix H: Popular But Problematic 317 Appendix I: Covered Calls Covering What? 321 Notes 323 About the Authors 329 Index 331
Ken Fisher is best known for his prestigious "Portfolio Strategy" column in Forbes magazine, where his over 27-year tenure of high-profile calls makes him the fourth longest-running columnist in Forbes 's 90-plus year history. He is the founder, Chairman and CEO of Fisher Investments, an independent money management firm managing tens of billions for individuals and institutions globally. Fisher is ranked #263 on the 2011 Forbes 400 list of richest Americans and #736 on the 2011 Forbes Global Billionaire list. In 2010, Investment Advisor magazine named him among the 30 most influential individuals of the last three decades. Fisher has authored numerous professional and scholarly articles, including the award-winning "Cognitive Biases in Market Forecasting." He has also published eight previous books, including bestsellers The Only Three Questions That Count , The Ten Roads to Riches , How to Smell a Rat , Debunkery and Markets Never Forget (But People Do) , all published by Wiley. Fisher has been published, interviewed and/or written about in many major American, British and German finance or business periodicals. He has a weekly column in Focus Money , Germany's leading weekly finance and business magazine. Lara Hoffmans is a content manager at Fisher Investments, managing editor of MarketMinder.com, a regular contributor to Forbes.com and coauthor of the bestsellers The Only Three Questions That Count , The Ten Roads to Riches , How to Smell a Rat , Debunkery and Markets Never Forget (But People Do) . Jennifer Chou graduated from the University of California with a BS in finance. She was a research analyst of global capital markets and macroeconomics at Fisher Investments.