Trends happen, and those who spot them as they’re just emerging them well and get off at precisely the right time make a great deal of money. As I’ve indicated, this is a very difficult thing to do. Unless you’re a professional observer of the markets with outstanding insights and great powers of observation, you’ll likely come upon the trend too late. The problem: It doesn’t seem too late. You’re bombarded with news stories about the rise of energy stocks or how blue chips are back or how the cell phone industry is about to introduce a new technology that will create huge profits in the industry.

Because of the Internet and multimedia communication devices, these trends are dramatized to the point that we feel we should be taking advantage of them, and that if we’re not, we’re missing the boat. I have documented in a number of chapters how the tech mania that swept the country devastated portfolios of people who didn’t see that the bubble was going to burst. When you’re in the midst of a buying frenzy and every day the media documents how much tech stocks have risen, it’s very difficult to gain perspective and see that the trend has crested and a major correction is imminent. Read the rest of this entry »