Knowledge Base
Bob Farrell’s 10 market rules:
Rule #01: Markets tend to return to the mean over time
Rule #02: Excesses in one direction will lead to an opposite excess in the other direction
Rule #03: There are no new eras - excesses are never permanent
Rule #04: Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways
Rule #05: The public buys the most at the top and the least at the bottom
Rule #06: Fear and greed are stronger than long-term resolve
Rule #07: Markets are stronger when they are broad, and weakest when they narrow to a handful of blue-chip names
Rule #08: Bear markets have three stages - sharp down, reflexive rebound, and a draw-out fundamental downtrend
Rule #09: When all the experts and forecasts agree - something else is going to happen
Rule #10: Bull markets are more fun than bear markets
Lance Roberts (from Real Investment Advice) has a fantastic paper on these rules: https://realinvestmentadvice.com/resources/blog/the-rules-of-bob-farrell-an-updated-illustrated-guide/