Cobas AM: Nueva Gestora de Francisco García Paramés

When this book was first published ten years ago it purported to be a practical guide for those attempting to invest their savings at the bottom of an equity bear market. In the 2005 edition, and in the subsequent 2007 and 2009 editions, forecasts were made about the future direction of the US equity market, utilising the analysis of the four great bear market bottoms for US equities. So how accurate were these forecasts and what does the history of the four great bottoms suggest about the future direction of the US equity market? In the first edition of this book, published in November 2005, the following forecast was made: ‘Before the bear market is over the DJIA [Dow Jones Industrial Average] is likely to decline by at least 60%’. The direction proved right but the magnitude was wrong. The DJIA rose from November 2005, peaking in October 2007. The index then declined 54% from its October 2007 peak to its low in March 2009. This was just 40% below its level when this book was first published in November 2005 and not the 60% decline your author expected. Judged by the valuation measures recommended in this book, the US equity market reached fair value in March 2009, but it was not as cheap as one would have expected at a great bear market bottom. Using the analysis in this book one must then conclude that March 2009 was not the bottom for the great bear market which had begun in 2000.

Russell, Napier. Anatomy of the Bear: Lessons From Wall Street’s Four Great Bottoms (Posición en Kindle137-147). Harriman House. Edición de Kindle.