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{{Short description|Bob Farrell's 10 rules of investing}} |
{{Short description|Bob Farrell's 10 rules of investing}} |
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'''''Market Rules to Remember''''' is a list of ten cautionary rules for investors that was written in 1998 by the then-retired Chief Market Analyst at [[Merrill Lynch]], Bob Farrell. The rules |
'''''Market Rules to Remember''''' is a list of ten cautionary rules for investors that was written in 1998 by the then-retired Chief Market Analyst at [[Merrill Lynch]], Bob Farrell. The rules became iconic on Wall Street and are frequently reprinted in leading financial advisory publications.<ref name=MW>{{cite web | website=[[MarketWatch]] | url=https://www.marketwatch.com/story/this-wall-street-legend-has-lived-through-every-bear-market-since-the-1950s-he-says-the-one-coming-could-hit-the-s-p-500-with-a-30-loss-11652111307 | title=This Wall Street legend has lived through every bear market since the 1950s. He says the one coming could hit the S&P 500 with a 30% loss | first=Jonathan | last=Burton | date=14 May 2022 | accessdate=3 June 2023}}</ref><ref name=BI/><ref name=MS/><ref name=CNBC/><ref name=GM/> |
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==Background== |
==Background== |
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Market Rules to Remember is a list of ten cautionary rules for investors that was written in 1998 by the then-retired Chief Market Analyst at Merrill Lynch, Bob Farrell. The rules became iconic on Wall Street and are frequently reprinted in leading financial advisory publications.[1][2][3][4][5]
In 1955, Robert "Bob" J. Farrell graduated from Colombia University with a master's in investment finance, where he was taught by Benjamin Graham.[6][7] After a 2-year period in the US Army, he joined Merrill Lynch in 1957.[2][7][8] By 1967, was made Chief Market Analyst (CMA), a title he held for 25 years until stepping down in 1992, aged 60.[9][10] For 16 of his last 17 years as CMA, Institutional Investor voted Farrell as America's best analyst in forecasting equity market direction,[9][8][10] and he was inducted into the "Hall of Fame".[6][7] Farrell is considered a pioneer of technical analysis, and the first to use "sentiment analysis" in financial forecasting.[2][7][8] In 1970, he was made the first president of what became the CMT Association.[3][11][7][10]
After stepping down as CMA, Farrell stayed with Merrill as a senior investment officer writing regular reports for clients.[9] In September 1998, as the dot-com bubble was nearing its peak, Farrell published a list of ten "Market Rules to Remember" on the back of one of his reports.[3] The rules received little attention when they were first published, and Farrell retired fully in 2002 after 45 years with the firm.[2][3] Merrill Lynch chief North American economist David Rosenberg re-published the rules in 2003, after the dot-com bubble burst, and they have been quoted by financial advisors ever since.[4][3]
In 1998, Farrell laid out his "Market Rules to Remember" as follows:[3][4][5]
In 2020, CNBC said: "Some would say Farrell was immortalized by his rules of investing that remains widely quoted today".[4] In 2021, Morgan Stanley said to their clients about Farrell's rules: "... they are pinned to the wall or taped to the screen of market professionals all over the world. A Google search of “10 Market Rules to Remember” reveals 305 million results. They are timeless".[3] In 2022, Bank of America wrote to their clients saying: "You can't change human nature and Mr. Farrell's rules seem as relevant today as when he retired from Merrill Lynch 20 years ago".[2] Farrell's rules are not only used on Wall Street, in 2020, India's The Economic Times said: "Although Farrell retired long back, his years of wisdom summarized in his famous book, titled 10 Market Rules to Remember, has lived on and is always referred to when investors get into difficult market situations".[12]
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