1. The Stock Market Presentation copyright© 1997, 1998 by Barry and Deborah Brownstein

2. Forecasting l “..the knowledge of the circumstances of which we must make use never exists in the concentrated or integrated form…” l Q. In a ‘average’ year of interest volatility, if you invested a $1000 in treasury bill futures and were correct about the direction of interest rates for 52 straight weeks how much money would you have?

3. New Era or Mania? l Mania- excessive or unreasonable enthusiasm- stocks?, beanie babies and tulipsbeanie babies tulips l ‘in normal market behavior the long-term direction is up but it is interrupted by setbacks’ l ‘a mania produces powerful persistent rises with fewer setbacks, broad public participation and historic overvaluations by all traditional measures ‘

4. More Ideas To Consider l Markets are a spontaneous order and perhaps are inherently unpredictable, but not random l Do events drive markets? –If you had tomorrow’s newspaper could you predict the market? l Speculation plays a positive role in markets –only coercion creates a conflict between consumers and firms

5. Still More Ideas l Most predictions are based upon past experience and thus miss turning points l That which ‘everybody’ knows has no entrepreneurial value l Limiting markets is generally a bad idea –the complexity of markets is beyond rational planning (the pretense of knowledge)

6. Recommended Reading l The Edge of Chaos by Bernice Cohen l Manias, Panics and Crashes by Charles Kindleberger l Extraordinary Popular Delusions and The Madness of Crowds by Charles Mackay l Money Meltdown by Judy Shelton l America’s Great Depression by Murray Rothbard