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Richard's Wisdom

August, 2016 Archives

Richard's Thoughts on News and the Markets

By Mary Anne and Pamela Aden and the Dow Theory Team

 

Richard's Comments

 

Maybe it's mean to say this, but I think it's rather pathetic the way investment advisors, newspaper reporters, TV commentators and the so-called Wall Street gurus all try to explain away the day to day moves in the market.

 

Good or bad business news is announced and the market rises, stalls or sells off. Corporations issue rosy quarterly statements and their stocks sink. Recently, the CEOs of a number of major corporations stated that their companies were doing well, and that their stocks "should be" rallying instead of declining. The CEOs were obviously angry.

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Richards Thoughts ... Indicators Not in Sync

By Mary Anne and Pamela Aden and the Dow Theory Team

 

Richard's Comments

 

Since I call my site and reports Dow Theory letters, I want to spout a bit of Dow Theory now.

 

The power and usefulness of Dow Theory has been doubted and sneered at since the early 1900s, but the effectiveness of Dow Theory has been proven over and over again.

 

The fact that the essence of Dow Theory concerns itself with VALUES never occurs to these gentlemen. They concentrate their criticism on the thesis that the Dow and the Transports no longer represent the true essences of the market.

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Richard's Thoughts on the Importance of Diversification

By Mary Anne and Pamela Aden and the Dow Theory Team

 

Richard's Comments

 

Many readers have asked me, "Russell, how do you decide what you are going to write in any given Letter?" and my answer is twofold:

 

(1) I write about what I actually see happening in the market. For instance, if bonds look toppy or gold appears to be breaking out, I'll write about that.

 

 (2) I write about what I happen to be thinking about. For instance, if I am thinking about values or stock selection, that's what I write about.

 

This week I've been thinking about one of my favorite subjects: diversification. Except in rare instances, I feel diversification is a MUST in investing.

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