How can the market wizards be so wrong | stockbee


How can the market wizards be so wrong

If you are a keen reader of Market Wizard,you should be able to figure this out.

What year was the first volume published?

What was the economic background closer to the interview period?

What was the opinion of the majority of market wizards regarding the American economy?

What was their prognosis?

Were they bullish or bearish on market prognosis, interest rates, inflation, deficient, the future direction of American economy, dollar, American competitiveness?

What actually happened?

You thoughts in comments please.

I was rereading Market Wizards last night and this is the first thing which struck me.


Joe said...


Sorry to hijack this thread with an off-topic question. How are your bearish strategies? Are they just the mirror-image of the bullish ones? Like: son of DT - sell on a 4% daily loss of a stock lowest ranking on their 135 day MA? Or sell lowest 200 composite rating IBD stocks after 2% break down? Any other? - I would be very thanksful for a quick summary.

I know market is still going up and go with the trend, but would be helpful for trading in a correction.

Thanks, Joe

Semsons said...

Hi Pradeep,

well what I remember of the edition of Market Wizard I read is that each Wizard had developped its own methodology. Most of them were traders and didn't do any kind of forecast on the market or economy. They just were hard working people with a well defined and working methodology and they did tons of $$.

Best. Semsons

Jack said...

What if you weren't a reader of the Market Wizard?
Can you explain the riddle?


Tim said...

If I remember correctly (not pulling out my copy to check this), this book was published in 1988 so most interviews took place shortly after 1987 crash. Most of the people interviewed were bearish/negative/nervous about the global economic landscape.

Pradeep Bonde said...

You are right. Most were extremely negative on market and the future. After that book market rallied for next 12 years with minor pullbacks.

Chris said...

Maybe a market wizard trait lol is who switched their views fastest, and made the most out of the bull run. If they had a lot of certainty but could change bias fast, would be a good trait I think.

Bill said...

The interesting thing about their negativity on "macro" is that many of them were system traders, meaning that their trading ignored macro, that they were not in a position of expertise to discuss macro, so their opinion didn't matter. Go long oil if this moving average crosses that moving average, etc.

Pradeep Bonde said...

Most in first volume were macro trader.
I think the bigger lesson is all of us are prone to anchor our analysis to recent events and that often is wrong thing.
Because there was a bubble in 2000, many have spent last 7 years looking for the next one. Same way after the 87 crash people spent many years looking for the next crash.
No two market cycles are same.

Prashant said...

I re-read Market Wizards recently and I remembered this post. Indeed, it is very surprising how a few of the wizards were extremely negative. Now in Feb 2008, the market is undergoing severe correction. We don't know how it will play out. I guess the clue is to be there everyday and go with the flow.