The Wall Street Waltz: 90 Visual Perspectives, Illustrated Lessons From Financial Cycles and Trends, Revised and Updated Edition

Chart 90

Don't Lose Your Hide in the Market

“Don't buy stocks now—the indicators are giving you a bum steer. They're breaking out of their range, and the bulls will end up having a cow. They're gonna get milked. The herd effect is just too strong. So don't lose your hide over it.”

Vintage circa 1900! And it's all from this chart. As this century began, more folks still lived on farms than in the cities, and you could tell a lot about finance and business from looking at trends in the cattle industry—maybe a little like looking at autos or housing starts today.

This book presents charts and offers analysis, lessons, and predictions based on charts—many of which are quite old. But you can go much too far with parallelism from yesteryear. The key is to make sure that historic trends that once tied events together in tight-knit correlations were and are supported by valid causal relationships, so that the chart truly teaches a valid lesson for the future.

This chart is beautiful and fascinating, and it teaches a valid lesson even if you won't make a fortune outguessing the market based on cattle trends. It comes from the Brookmire Economic Chart series (see also Chart 33) and was state of the art for its day. It shows a lot more than you need to focus on here.

Look in the middle of the chart, where it shows hide prices, which range from a low in 1908 of 9 cents to a high in 1913 of 20 cents. (The scale is on the left.) If you flip back to Chart 33 and compare this chart to that one, ...