Davis, CMT1 Chapter 1

Chapter 1: Being Right or Making Money

• Bad News about Forecasting (Being Right)
• Good News about Making Money
• Being Right and Other Investment Techniques Are Overrated and Are Not the Keys to Success
• The Four Real Keys to Making Money
  • Objective Indicators
  • Discipline
  • Flexibility
  • Risk Management
• The Battle for Investment Survival and Handling Mistakes
• Stories of Five Successful Winners
  • Marty Zweig
  • Paul Tudor Jones
  • Dan Sullivan
    • Four negative behaviors and attitudes that can lead to poor investment returns (The Chartist 9/12/2013):
      • Failing to take losses
      • Being overly fearful at market bottoms and overly optimistic at market tops
      • Failing to take responsibility for your own money
      • Not following a disciplined strategy
  • Chris Cadbury
  • Jim Stack
• Making Our Own Reality
• The Ned Davis Research Response to All This
• Timing Models
  • Davis’ Law
  • Rule No 1: Don’t fight the tape
  • Rule No 2: Don’t fight the Fed
  • Rule No 3: Be wary of the crowd at extremes
• What Is Contrary Opinion and How to Use It
• History and Risk Management
• The Rest of the Book
• The Nine Rules of Ned Davis Research
  1. Don’t Fight the Tape
  2. Don’t Fight the Fed
  3. Beware of the Crowd at Extremes
  4. Rely on Objective Indicators
  5. Be Disciplined
  6. Practice Risk Management
  7. Remain Flexible
  8. Money Management Rules
  9. Those Who Do Not Study History Are Condemned to Repeat Its Mistakes