1. “Bull markets are born in pessimism, grow on skepticism, mature on optimism and die on euphoria"---John Templeton
My interpretation: With the S&P 500 surged 66% since march low, PE at 23 vs historical average of 15, CNN Fear and Greed index at the extreme greed level of 92 and the National Associate of Investment Managers is carrying above 100% exposure to stock, these statistics certainly put us at the euphoria stage of a bull market. This kind of extreme market level is hard to sustain as the rule is market returns to the mean over time. Excess are never permanent and excess leads to opposite excess.
2. "When all experts agree, something else tends to happen" ---Bob Farrell
My interpretation: Most market analysts are now expecting the arrival of Covid-19 vaccines will fix everything and push the stock market even higher, now is the time for us to worry for something bad to happen.
3. "Price is what you pay. Value is what you get" ---Warren Buffet.
My interpretation: When you buy a stock such as NIO with no PE and, Price to Sales of 38, Price to Book at 53 and stock price has risen 2095% in the past year, you are paying a very dear price hoping that things will go perfectly smooth in the future. When the current stock price already reflecte d developments that can only be achieved many years later, you are definitely not getting a good deal. No, I am not forgetting to mention TSLA with Forward PE at 150, Price to Sales of 19, Price to Book at 34 and stock price has risen 784% in the past year. Other EV stocks are also in the same over stretched situation. Paying at high price for a stock when sentiment is euphoric means investment return will likely be lower in the future as sentiment return to normal. FOMO (fear of missing out) to buy a stock is dangerous.
4. "Be Mindful of Experts and Forecasts"---Bob Farrell
My interpretation: When most market experts are saying sell, sell, sell—or buy, buy, buy— everyone has sold or bought, there's nothing left to sell or buy. By the time you jump in, the opposite will likely happen. Analysts and economists have to predict because that's their job. However, no body can predict what happen in a year's time. When somebody tells you what will happen in the market or stock one year ahead, don't believe it. Believing is admitting that future can be known ahead of time. Through out time, an analyst become hot and get popular because he predicted something right, but his/her accuracy won't last for long. Some time later, another analyst will become hot and and take the place of the previous hot one.
5. "Public Buys Most at the Top and Least at the Bottom" ---Bob Farrell
Interpretation by Barklay Palmer from Investopedia: The typical investor reads the latest news on his mobile phone, watches market programs, and believes what he's told. Unfortunately, by the time the financial press gets around to reporting a given price move, that move is already complete and a reversion is usually in progress. This is precisely the moment when John Q decides to buy at the top or sell at the bottom. The need to be a contrarian is underlined by this rule. Independent thinking always outperforms the herd mentality.
1.“牛市生于悲观，因怀疑而成长，因乐观而成熟，并因欣喜而死亡”-约翰·邓普顿 （John Templeton)
我的解读：自3月低点以来，标准普尔500指数已飙升66％，市盈率上升至23而历史平均水平则只是15，CNN恐惧与贪婪指数处于92的极度贪婪水平，国家投资经理人协会成员的股票投入率超过100％ ，这些统计数据无疑使我们进入了牛市的极度欣喜阶段。这种极端的市场水平很难维持，因为市场规律是随着时间的推移市场将回归到平均水平。过度永远不会永久存在，而过度却会导致相反的过度。
2.“当所有专家意见都一致时，其他事情就会发生” ---鲍勃·法瑞尔 （Bob Farrell）
我的解读：大多数市场分析师现在都认为Covid-19疫苗的到来能够解决所有问题并推动股票市场继续走高，现在是我们担心坏事快将到来的时候了。
3.“价格就是您所付出的，价值就是您所获得的”-沃伦·巴菲特（ Warren Buffet)
我的解读：当您购买NIO之类没有PE，38的价格对销售比率，53的价格对帐面价值，并且在过去一年中股价已上涨了2095％的股票时，您付出了非常高的价格，希望将来公司会发展完美的事事顺利。当现在的股价已反映了多年后才达到的发展时，您肯定不会得到好的回报。不，我不会忘记提及TSLA，其前瞻PE为150，价格对销售比率为19，价格对帐面价值为34，股价在过去一年中上已涨了784％。其他电动汽车股也处于过度高涨状态。当市场情绪高涨时，以高价买入股票意味着随着市场情绪恢复正常，未来的投资回报不会很高。因为 FOMO（怕错过）而买股票是危险的。
4.“不要过分相信专家和预测” ---鲍勃·法瑞尔 （Bob Farrell）
我的解释：当大多数市场专家都说卖或买时，每个人都卖或买了。当您跳入时，可能会发生相反的情况。分析师和经济学家必须做出预测，因为那是他们的工作。但是，没有人能预测一年后会发生什么。当有人告诉您未来一年市场或股票会发生什么时，请不要相信。相信就是承认未来是可以提前知道的（没可能的事情）。市场上经常发生的事情是是一位分析师会因为预测正确而变得炙手可热，并因此受到欢迎，但他/她的准确性不会持续很长时间。一段时间后，另一位分析师将变得炙手可热，并取代之前的分析师。
5.“公众在顶部买入最多，在底部买入最少” ---鲍勃·法瑞尔 （Bob Farrell）
Investopedia的Barklay Palmer的解读：典型的投资者在他的手机上阅读最新消息，观看市场节目，并相信他所告诉的内容。不幸的是，等到金融媒体报道给价格变动时，该变动已经完成，并且反转已在进行中。这正是某散户决定在顶部买入或在底部卖出的时刻。这时就需要成为逆势者。独立思考总是比盲目跟随强。
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