CHAPTER 1 - Can You Beat the Market?
THE SPECULATOR’S EDGE
LENDING A HELPING HAND TO INVESTORS
UNCOVERING MARKET MISTAKES
LOOKING AT THE EVIDENCE
MARKET TIMING
CATCH-22
CHAPTER 2 - Market Mistakes
EFFICIENT MARKETS
ROLLER COASTERS AND STOCK MARKETS
DO STOCK PRICES FLUCTUATE TOO MUCH?
A LOOK AT BEHAVIORAL FINANCE
BEHAVIORAL FINANCE AND EXPLOITABLE MARKET MISTAKES
NO FREE LUNCH REDUX
CHAPTER 3 - The Edge
A THEORY OF MARKET MISTAKES
TO GET ALONG, GO ALONG
GO ALONG AND CREATE A MISTAKE
THE SOCIAL CALCULUS OF CROWDS
THE VISION OF A CONTRARIAN TRADER
CHAPTER 4 - The Wisdom and Follies of Crowds
CAN A CROWD BE WISER THAN ITS MEMBERS?
THE NEED FOR COLLECTIVE WISDOM
INDEPENDENT DECISIONS IN THE FINANCIAL MARKETS
FORECASTING MARKET PSYCHOLOGY
INFORMATION CASCADES INTO THE WHIRLPOOL OF SPECULATION
CHAPTER 5 - The Life Cycle and Psychology of an Investment Crowd
PROLOGUE
THE CYCLE OF BIRTH AND DEATH
THE STOCK MARKET BUBBLE OF 1994-2000
IT’S DIFFERENT THIS TIME: THE NEW INFORMATION ECONOMY
SHATTERED DREAMS: THE BEAR CROWD OF 2001-2002
POPULAR INSTINCTS AND THE SEARCH FOR CERTAINTY
THE PIED PIPERS OF INVESTMENT CROWDS
THE MENTAL UNITY OF INVESTMENT CROWDS
SUGGESTIBILITY, VOLATILITY, AND DISINTEGRATION
CHAPTER 6 - The Historical Context for Market Mistakes
MATURE INVESTMENT THEMES AND MARKET CROWDS
MISTAKES VERSUS FAIR VALUE
MARKET DATA SOURCES
THE DEADLY MISTAKE
WHEN IS THE STOCK MARKET (EXTREMELY) OVERVALUED?
WHEN IS THE STOCK MARKET UNDERVALUED?
THE PEAK OIL BUBBLE
CHAPTER 7 - How Crowds Communicate
WHAT DO INFORMATION CASCADES TELL INVESTORS?
THE ROLE OF THE MASS MEDIA
A WORD ABOUT PERSONAL FLEXIBILITY AND THE FUTURE OF MEDIA
MONITORING THE MARKETS
STUDYING THE HISTORY OF BUBBLES AND CRASHES
CHAPTER 8 - Constructing Your Media Diary
GAINING THE EDGE
HOW MY DIARY MADE A DIFFERENCE IN 2002
GET READY TO CUT AND PASTE
EXCERPTS FROM MY MEDIA DIARY: NOVEMBER 2005
EXCERPTS FROM MY MEDIA DIARY: JUNE 2006
INTERPRETING MAGAZINE COVERS
CHAPTER 9 - Important Investment Themes
TELLING THE MARKET’S STORY
NEW ERAS
EFFECT OF WAR AND INTERNATIONAL POLITICAL CRISES ON THE STOCK MARKET
FINANCIAL CRISES CREATE CROWDS
NEW INDUSTRIES AND COMPANIES
COMMODITY BOOMS
INTEREST RATE MOVEMENTS AND THE BOND MARKET
USING YOUR MEDIA DIARY TO TRACK INVESTMENT THEMES
CHAPTER 10 - Interpreting Your Diary: Market Semiotics
MEDIA AND INFORMATION CASCADES
YOUR MEDIA DIARY: A LIVING HISTORY OF INFORMATION CASCADES
SEMIOTICS: THE STUDY OF SIGNS
THE MOST IMPORTANT SIGN: THE PRICE CHART
MAGAZINE COVER STORIES
NEWSPAPER HEADLINES
FRONT PAGE STORIES AND EDITORIALS
CRYSTALLIZING EVENTS
THE WEIGHT OF THE EVIDENCE
MORE ON MARKET SEMIOTICS
CHAPTER 11 - The Grand Strategy of Contrarian Trading
CONTRARIAN INVESTMENT PLANNING
CONTRARIAN TRADER’S INVESTMENT PORTFOLIO
THE INVESTMENT GOAL OF THE CONTRARIAN TRADER
A WARNING ABOUT CAPITAL GAINS TAXES
CONTRARIAN TRADING STRATEGY #1: DON’T SPECULATE
CONTRARIAN TRADING STRATEGY #2: DON’T INVEST WITH THE CROWD
CONTRARIAN TRADING STRATEGY #3: CONTRARIAN REBALANCING
THE AGGRESSIVE CONTRARIAN
A LONG-ONLY STRATEGY FOR THE AGGRESSIVE CONTRARIAN TRADER
MORE AGGRESSIVE CONTRARIAN TRADING STRATEGIES
CHAPTER 12 - The Great Bull Market of 1982-2000
PROLOGUE
THE 1987 CRASH
INTERLUDE: THE 1929-1932 CRASH AND BEAR MARKET
THE S&L CRISIS, THE 1987-1990 BULL MARKET, AND THE 1990 BEAR MARKET CROWD
RALLY WITHOUT JOY, 1991-1994
THE STOCK MARKET BUBBLE INFLATES, 1995-2000
THE AGGRESSIVE CONTRARIAN FACES THE 1987 CRASH
THE 1990 LOW
LONG TERM CAPITAL MANAGEMENT GOES BUST
CHAPTER 13 - Collapse of the Bubble: The 2000-2002 Bear Market
END OF THE GREAT BULL MARKET
CONTRARIAN REBALANCING DURING THE 2000-2002 BEAR MARKET
THE LONG WAY DOWN AGAIN
CONTRARIAN REBALANCING DURING THE CRASH
THE AGGRESSIVE CONTRARIAN DURING THE 2000-2002 BEAR MARKET
A WALL STREET WRECK
THE SUMMER RALLY
THE MARCH 2001 PLUNGE
TERRORISTS ATTACK ON 9/11
END OF A BEAR MARKET
TRANSITION TO A NEW BULL MARKET
CHAPTER 14 - The Postbubble Bull Market of 2002-2007
ESCAPING THE BEAR’S CLAW
WHAT BULL? LOOKING FOR SIGNS OF A BULLISH INFORMATION CASCADE
THE STORY OF GOOGLE’S IPO
THE HOUSING BUBBLE
AGGRESSIVE CONTRARIAN TRADING DURING THE 2002-2007 BULL MARKET
APRIL 2005—A BUYING OPPORTUNITY
JUNE 2006—ANOTHER BUYING OPPORTUNITY
AGGRESSIVE CONTRARIAN TRADING IN EARLY 2007
JULY-OCTOBER 2007
CHAPTER 15 - The Panic of 2008
THE CONSERVATIVE CONTRARIAN DURING THE PANIC
THE MORTGAGE MESS
THE DEBT-DEFLATION SPIRAL TAKES HOLD
LENDERS OF LAST RESORT
THE CREDIT CRISIS AND THE CONTRARIAN TRADER
BULL MARKET TOP AND THE FIRST STEP DOWN
THE BEAR STEARNS FAILURE
FANNIE AND FREDDIE
THE CRASH: BANKRUPTCY OF LEHMAN BROTHERS
CHAPTER 16 - Vignettes on Contrarian Thought and Practice
THE PSYCHOLOGY OF THE STOCK MARKET
THE GODFATHER OF CONTRARY OPINION
OPINION POLLS: WHAT DO YOU THINK?
IS THE ODD LOTTER ALWAYS WRONG?
A FORECASTING GIANT OF THE PAST
PAUL MONTGOMERY, THE MAGAZINE COVER CONTRARIAN
IRRATIONAL EXUBERANCE AND OTHER BUBBLES
VALUE INVESTING—A BACK-OF-THE-ENVELOPE APPROACH