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

Chapter 11. 1994: The Calm Before the Storm

"Each year for ten years I have written about 14 columns and picked about 50 specific stocks. My overall Forbes record is good but certainly not perfect. I make bad picks. I'll make others. I hope each time to learn from my mistakes."

—"Nolo Contendere," January 17, 1994

"A simple market truism: Old arguments, even correct ones, don't move markets (at least not until they are forgotten, and then they can have real power). Something new must arrive — a surprise or catalyst, because it is a surprise, and only that, which moves markets."

—"Jell-O Versus the Facts," February 14, 1994

"Plan for a great year in stocks" was Ken's opening line to his February 14, 1994 column "Jell-O Versus the Facts." The start of the big bull market Ken was predicting was less than a year away, but a great year 1994 wasn't — though it wasn't terrible either. Foreign stocks gained just 8.1 percent in 1994.^[37] The S&P 500 price level fell 1.5 percent but actually posted positive returns.^[38] How? Dividends. Just looking at changes in the price of a stock or stock index tells only part of the story. Gains on stocks come not only from stock price changes but also from dividends. In any given year, the stock market's total return results from the change in stocks prices plus dividends reinvested in stocks. So stocks' total return will always be a little bit higher than just the price changes. Most years, that means total returns will be slightly more positive or slightly ...