The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

Chapter 6. 1989: The End Is Nigh

"What all this nonsense about US weakness overlooks is that we Americans are far and away the world's best marketers. No one else comes close. The marketing feature that distinguishes us, and gets too little press, is the Yankee merchant's ability to anticipate markets and innovate based on market feedback. In a capitalistic world, innovation is the only real future."

—"Right Under Your Nose," July 24, 1989

"I am usually a very patient, long-term holder of unpopular stocks of what I see as good companies. But if I'm right on this downturn, the only stocks that won't be pounded in 1990 are those few that are free from normal economic vagaries. There aren't many. Cyclical stocks—and most stocks are cyclical—are going to be hurt."

—"Early Casualties," December 25, 1989

The world was busy in 1989. The Soviets fled Afghanistan after nine years of occupation. In Europe, the Berlin Wall came crashing down (figuratively and literally). In China, students clashed with tanks in Tiananmen Square. Americans viewed their first Seinfeld episode. Researchers at the University of Utah claimed to have achieved cold fusion, possibly solving the world's energy problems. (They didn't.) The 7.1 magnitude Loma Prieta earthquake rocked Northern California. And the US Savings & Loan crisis was hitting a crescendo, with hundreds of thrifts going under.

Yet, none of this held back stocks. The S&P 500 soared 31.7 percent, walloping foreign shares (although foreign was up a decent ...