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

Chapter 14. 1997: Rational Exuberance

"In some respects I have been lucky and it scares me.... Getting these short-term swings right is often just luck. I'm always grateful for luck, but know enough not to confuse it with skill."

—"My Annual Report," February 24, 1997

"I haven't a clue when [the bull market] will end, and neither does anyone else. Better than futilely trying to foresee a top, wait for a clear signal the market has topped. That won't get you out at the absolute peak but will get you out soon enough to stay intact."

—"When Should You Get Out," September 22, 1997

In many of his columns, Ken highlights the folly of calling a bear market too soon. Investors dream of getting out of the market at an exact top and getting back in at the bottom, but that's a fool's game. Forecasting the market that accurately is nearly impossible. The odds of making that call perfectly with any consistency is on par with winning the lottery—only it'll cost more than a dollar if it's wrong. Given the choice between getting out of the market too early or too late, Ken will take too late every time. Getting out too early can mean missing out on substantial upside before a bear market develops. Getting out too late may mean giving up a little, but usually only a little if done right. Bear markets typically develop slowly; they seldom drop off a cliff initially.

If anyone is equipped to make an accurate prognostication about a market top ahead of time, surely it's the US Federal Reserve chairman, ...