Anatomy of the Bear: Lessons from Wall Street's Four Great Bottoms

Its now 2009, and we are already in the midst of one of the greatest bear markets in history. It only makes sense to read this book before deciding whether or not to jump back into equities. Recently the author has been quoted as not being bullish (Jan 2009) and in the book he provides compelling arguments as to why it pays to wait in extreme bear markets before investing. A great history book and an hopefully an even more useful guide to investors today. If you are even thinking about buying this book, you should.

This book, written before the melt down, is a must read in these times. The events leading up to the falls are reviewed and more interesting now, when things bottom. It is not a sensationalistic or get rich quick book. Rather, it offers clear insight. By reviewing the great bear markets of the last century, common patterns are discovered, some contradict conventional wisdom and TV talking heads. The case is made for a handful of predictors when we have really bottomed, all easily monitered. The books is relatively easy to read but assumes some basic market understandaing, but even a novice would get the point. At times, it was a little tedious and i admit to skipping along towards the end of the book. It is rare to find such a insightful work.

This is an excellent book on the history of stock market in U.S. I remember somebody said something like this: If you want to know the future you need know the history very well. And somebody else says: History does not repeat itself, it rhymes. This books also provides a good list of other investing books. I bought some other good books referenced by this book.

Another classic of this type is "Manias Panics and Crashes". This one is specific to the four big Bear markets of the last century. The author goes through each one as an example. He identifies each stage and has clippings from the markets on peoples sentiment. Shows pricings and looks for what was the best indicator at the bottom. There is no hype, predictions, or false systems in this book. It's more presenting information and presenting patterns that occured. All the bears follow similar patterns where there is froth, leverage, money sloshing around and everything is priced up a bit. Then some triggering event happens and people either re-evaluate or are forced to change their minds on valuations. Prices drop until they hit a bottom. Things uptrend for a while even though the news is still bad.... The author goes over each bear and how it's the same and how it's different. Until reading this book, I did not understand or even think about using commodity prices as a leading indicator. Did not know that the stock market turned up before the economy did. Did not know that the great depression involved multiple stages, an international banking crisis, and a late move to gold. After reading this book, now when I see someone on the TV saying that "They've never seen anything like this before" about LTCM, Bear Strerns, or the price of oil or gold... I have a better perspective. When someone tells me that "the market has definately found bottom" or "Can't go down from here"... I kind of chuckle now. I do know that when people say "This is a great time to buy stocks..." they often don't know what they're talking about, or they're making it up. If the credit crisis worsens this year, this summer or the next may be the best buying opportunity in the US stock market in the last 30 years. Hopefully what I've read will be some help. Every downturn is different, and Banks/Fed/Investors act differently each time based on past exp and history... It may be that we've already hit bottom... It may be that nothing in this book will call the next bottom... Only time will tell. Many won't read this book because it doesn't say "Get RICH QUICK" on the front... LOL

This book reviews the history of 4 bear markets in the US. We will eventually see another one so you might be able to learn from history. It's mostly an easy read but there were some sections that became a little textbook like. This and Bull by Maggie Mahar will teach you plenty and hopdfully save you bundles.