Moods and Markets: A New Way to Invest in Good Times and in Bad

9. Using Horizon Preference No Matter Your Long-Term View

As I offered in my introduction, my goal in writing this book is to share the insights and conclusions I have come to through the framework of socionomics. My hope is to help investors see what I now see in the markets and the world around us so that they can prosper from it. I was not trying to write either a Dow 50,000 or Dow 5,000 book.

To be clear, I hope my mood-based assessment of the past 20 years is not just wrong, but that it’s very wrong. I don’t wish for single digit P/Es nor the societal behavior that would naturally accompany a market defined by severe self-assured uncertainty. But it makes sense to me that confidence would follow a cyclical pattern (such as suggested in the ...