The Little Book of Stock Market Cycles: How to Take Advantage of Time-Proven Market Patterns

Foreword

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

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

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

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

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

Mr. Market is not an easy guy to get to know. Analysis of market history and the rhythm of financial cycles isn’t a simple task, and especially not the way Jeff does it. Determining the roles that human behavior, holidays, elections, seasons, and the calendar play in influencing the stock market’s direction requires careful ...