The Little Book of Bull Moves Updated and Expanded: How to Keep Your Portfolio Up When the Market Is Up, Down, or Sideways

Prologue to the 2010 Edition

When I was writing The Little Book of Bull Moves in Bear Markets in late 2007 and early 2008, the gloomy forecasts I had made in my first book, Crash Proof: How to Profit from the Coming Economic Collapse, had only just begun to play out. The real estate bubble had been pricked as predicted, but instead of exploding it was leaking air slowly. The recession was clearly underway, although not yet officially recognized as such.

In a free market system, recessions, however painful, serve the salutary purpose of wringing out the excesses of the preceding boom and restoring fundamental economic balance. Unfortunately, the outgoing Bush administration and, less surprisingly, the incoming Obama administration had no stomach for free market remedies involving recession. Instead, the government and the Federal Reserve have used every gimmick possible in an effort to reverse the downward trend of real estate prices, to prevent more foreclosures, and to prevent toxic assets from restraining bank lending. While they have so far failed in their efforts to blow the bubble back up, they have succeeded in preventing it from fully deflating. Government economic stimulus is thus adding inflation to inflation. As a result, our economy is now perched on a precipice even higher than before, making the advice in The Little Book of Bull Moves all the more relevant and vital to your financial survival.

My investment strategy has always focused on understanding longer-term trends, ...