Hank’s Fundamental Views
The stock markets are cyclical.
•The cycles are driven by human rhythms.
•The cycles are roughly 7 years (3 yrs down, 4 years up)
•Cycle length and depth are modulated by other factors.
•politics, world economy, geographical unrest,
government intervention, etc.
•The downturn of a cycle is catalyzed by an event or situation.
•Housing bubbles, shortage of a commodity, political uncertainty,
banking debacles, etc.
Elliot Wave Theory can be used to interpret the nodes of the cycle. Support and resistance lines often correlate to the Fibonacci sequence.
The Efficient Market Theory is not valid.
Huge investors drive the market direction
•The movement of exchanges are synchronous as a result of huge
investors using programmed trading.
•Huge investors practice sector rotation.
A knowledgeable individual investor has an advantage over the huge investor.
•The individual investor can move between investments without
perturbing the investment.
•The individual investor can protect investments by going to cash or
other “safe” investments. (all in – all out if desired)
Every investment should have an entry and an exit strategy.
Every position should be protected with mental or automatic stops.
New investment vehicles allow the knowledgeable investor to profit in both bull and bear markets.
•examples: ETFs and Short ETFs in Sectors and Industries.
A combination of fundamental and technical analysis enables high success in bull markets.
•Fundamental analysis may be misleading in bear markets.
•Technical analysis may be helpful in bear markets.
Investing strategy must evolve as the market evolves.
•Strategies and rules must be adjusted as the market changes.