Table Of Content

Identifies and shows you how tocontrol the human emotions that underlie most stock market losses. By Peter WYCkoll The PSYCHOLOGY 01 STOCK MARKET TIMING How investors can sharpen theirtiming and increase their chancesof making money instocks by buying orselling at Ihe right psychological moment. $8.95 THE PSYCHOLOGY OF STOCK MARKET TIMING by PETER WYCKOFF Here is a new and different approach to stock market timing, based on the prin ciples of "crowd psychology." Peter wyckotl, a well-known Wall Street research analyst, has made a life long study of the psychological factors that influence financial decision-making and has found remarkable wallS to iden tify and control the human elements in investment He has found tluu the seemingly illogi cal bchavior of stock prices is directly attributable to certain "psychological trig gers" that set off a chain reaction when released. For instance, he shows how abnormal weather conditions. war scares, elections, strikes, and similar phenomena cause sig nificant fluctuations in the price of stocks -and he shows you how you can profit by these fluctuations by knowing in ad vance what the investing public will do. He reveals how mass opinion sways seasonal prices, and how you can entici pate these movements to your gain. And be demonstrates how to spot the psychological "turning point" in daily trading activities when prices reach their lowest ebb-the best time to pick up the issues you want. You'll see how the reactions of market professionalscanbescientificallypredicted and acted upon. You'll discover how to "read between me lines" of charts and tapes. and how to apply what be cells the Confidence Fac tor to get the true significance of these facts and figures. And you'll also find out how to over come your own "emotional blind spots" [continued on back (lap) [continuedfrom front {lap) andhowto develop attitudesthat will free youfromfollowingthecrowd,and Jet you playthe market in a coldlyscientific, logi cal manner. Wyckoff reveals unsuspected psycho logical pitfalls in many common invest ment techniques, and points out the dan gers in stop-orders, the scaJe-order plan, dollarcost averaging, fluid portfolios, and similar "formulas." He shows why low-priced stocks are psychologically risky- and what special attitudes youmust adopt inorder to trade inthem profitably. He analyzes the so-called "hunch," shows you its origin and meaning, and tells you when to follow it and when to go directly against it. And hepresentsanovel"normalvalue" theory, based on psychological laws. that helps you spot the "momentsoCdecision" in the trading cycle-and understand the central, controlling forces in the market. You'll discover certain psychological indicators that show when a stock will havedifficultymovingupward-andyou'lJ see how the human tendency to think in round figures sets the price. And the book also covers the psychol ogy of selling short, feminine investment tendencies, off-season buying, and many other aspects of the market's basic struc ture usually overlooked by other books on investment. Newcomer or professional, you'll find this book a powerful addition to your arsenalof investment knowledge andtech niques. PRENTICE-HALL. INC. Englewood Cliffs New Jersey ~to9 • Printed in U. S. of America The Psychology of Stock Market Timing Wyckoff Peter The Psychology of Stock Market Timing ~ Prentice-Hall, Inc. ENGLEWOOD CLIFFS, N. J. e 1963BY PETER WYCKOFF ALL RIGHTS RESERVED. NO PART OF THIS BOOK MAY BE REPRODUCED IN ANY FORM, BY MIMEO GRAPH OR ANY OTHER MEANS, WITHOUT PER MISSION IN WRITING FROM THE PUBLISHER. SIXTH PRINTING MAY, 1969 LIBRARYOF CONGRESS CATALOG CARD NUMBER: 63-21061 PRINTEDIN THE UNITEDSTATES OF AMERICA 73658-B&P Foreword THE stockmarket behavior of man is just asde servingof study as the eating, drinking and sex habits of animals-the kind of studies sopopular in many of our psychological laboratories. The ticker tape of stock market transactions is as gooda scientificrecord of human behavior as the income statement and balance sheet of a cor poration's health. The way a man performs when buying or selling stocks provides very definite clues to his character. Moreover, the mistakes an average person has made in the past are a guide to the dangers that beset him in future. Again such a studyisimportant, becausemore than 18,000,000 personshave a stake in today's market. Watching his stocks move up or down is an essential part of man's daily behavior. For some people the market takes the place of the bull fights of Spain, the gladiatorial combats of an cient Rome, the jousts of Merrie England. We $ 6 • foreword have no principal national pastime. One group is interested in baseball, another prefers football, the wealthy like polo and yacht ing; but not until after World War II has such a widespread interest been evidenced toward securities. The market has had occasional setbacks, to be sure, and others will inevitably occur. Yet most Americans would rather speculate than eat. No one enjoys much leisure. Everybody is working at his or her job most of the day. Nine-tenths of the stuff we do is routine. Even card playing has gone out among men how long is it since you sawa reallygood poker game? We all get bored. Speculation is about the only thing that offers the same kind of thrills as big-gamehunting, and a man can operate in the market right from his own desk. Call up your broker in the morn ing, place an order without moving from your seat, and the great adventure is on. Between the covers of this book are some suggestions and ideas to help you to make money. Certainly, they should help you to save money. Acknowledgments PORTIONS of this book consist of an updating and revision of one of the leading books in the field of stock market psychology-Why You Win, or Lose by the late Fred C. Kelly. To his widow, Mrs. Marcelle Kelly, and to the Riggs National Bank of Washington, D.C., we express our appreciation for their interest. Also, to Forbes Magazine and The Analyst's Journalforpermissionto reprint certain material; to M. C. Horsey& Co. for the use of all charts; and to Challenge: The Maga-zine of Economic Affairsforpermittingan articleappearing in their May, 1962,issueto be reproduced. 1