TrendWatching: Don't Be Fooled by the Next Investment Fad, Mania, or Bubble

by Ron Insana

Plummeting stock prices. Decimated 401(k) accounts. Shocking corporate scandals. Thus is the beginning of the twenty-first century. The boundless prosperity of the 1990s is now a remnant of history. With the turn of the millennium came a national reversal of fortune. In a period of under twelve months, the Nasdaq Composite index lost over 60 percent of its value, costing average Americans billions of dollars.If only we could've seen it coming. But perhaps it wasn't our lack of vision that blinded us to the approaching disaster. Perhaps all we needed to do was change our perspective. Too often we invest on whims and headlines, instincts and hot tips. We focus on the short-term possibilities and ignore the long-term picture. In this groundbreaking account, best-selling author and renowned CNBC anchor Ron Insana proves that we can profit from the best of times while preparing for the worst. Through an impressively illuminating investigation of financial market bubbles, manias, and trends, Insana shows how to predict confidently the seemingly erratic financial market booms and busts, getting in while the getting is good and getting out before we are gotten. We've all heard the History repeats itself. In economic terms this truism could not be truer. Delving deep into the history of American investing, Insana’s enlightening study charts both well-known and widely overlooked events, proving definitively that the ups and downs of financial markets follow astonishingly similar patterns. Bubbles replicate those before them, trends imitate other trends, and the cycle repeats itself time and again. With keen insight, Insana, one of the world's top business journalists, will teach you how to recognize key signs and indicators so that you can determine when a bubble is forming, how long it will continue growing, and at what point it's going to burst. Too often, the public is the last in and the last out of the game. We lose money because we react to the decisions of others rather than anticipating fads on our own. Insana's eye-opening investigation will teach you how to stop following the herd and start finding your own way to investment success. Drawing on concrete evidence from the past to forecast the real-world changes of the future, this fascinating study paves the path for more secure, more dependable, and more profitable investing. It's your money.

Genres: Finance

272 pages, Hardcover

First published November 1, 2002

Reviews

[Sanford Chee]

@mohnishpabrai - “One of my fave books”
https://youtu.be/N0TwWxGxYs0
https://twitter.com/MohnishPabrai/sta...

Bubbles are quite common
https://youtu.be/Y2zu_8w_2H0

[Bk · Rating 5 out of 5]

Must read after witnessing the 2020-2022 market bubble. Way underated book. People should recommend it more often.

[Arun Ramakrishnan · Rating 5 out of 5]

I have had this book on the back burner for a long time. It had very few reviews, the title seemed a bit too catchy, and the author is neither an economist nor a successful money manager. However, it turns out I wrongly judged the book by its cover.

The best way to understand and identify bubbles is to live through repeated historical patterns. Unfortunately, I started late in the investing game. I was too young to learn from the crisis following September 11 and not wise enough to grasp lessons from the 2008 global financial crisis. My significant entry into public markets came around 2017. I was naïve enough to take an equity-heavy software engineering job at Lyft, only to witness 90% of its valuation crash from its private peak. I didn’t recognize the gig economy pre-pandemic bubble. When the COVID-19 pandemic hit, I was underprepared for the subsequent recession and the pandemic-induced bull market that followed. I invested at the peak in stocks like Zoom and Moderna, driven by FOMO, only to watch the remote work bubble burst less than a year later.

The author demonstrates deep knowledge of financial history and generously shares insights about past bubbles. The most compelling aspect of the book is its final chapter, where the author discusses where the next bubble might arise. Notably, this book was published in 2002, and the author’s prediction that real estate could become the next bubble was remarkably prescient, given the 2008 housing market crash.

The book is somewhat dense, packed with historical facts and figures. Personally, I enjoyed this aspect and even wished for more, but it might not appeal to every reader. If you prefer lighter reads, keep this in mind. Overall, the book provides valuable lessons on recognizing and understanding market cycles, making it a worthwhile read for anyone interested in financial history and investing.