Thoughts from the Frontline

Why Investors Fail

By John Mauldin

October 11, 2002

How to Know When the Next Bear Market Rally Begins
It’s a Cruel, Cruel Investment World
Why Investors Fail
Where are the Bull Market Geniuses?
Tails You Lose, Heads I Win
Ergodicity
I’ve Got A Secret System for You
Baggage Claim Blues

Exactly what use is past performance? How can you spot a trend before it starts, and determine when it will stop? And when will the next big bear market rally start? This week we examine why so many investors fail, and why a few succeed over and over again. While I am sure that none of my regular readers make these mistakes, this will be a useful column to send to your friends who have not been as successful as you. Oh, yes, and I tell you how to know when the next big rally starts. Let's keep that detail to ourselves. No use tipping your friends on this one.

But first, I must admit a BIG mistake. Last week, after several pages of detailing why deflation is a big problem in our near future, I ended by writing that the Fed must begin NOW to fight inflation. I meant the Fed must begin NOW to fight deflation . Many of you wrote, asking me to explain. As my friend Mac Ross wrote: 'John, there are now 1 million plus readers taking Excedrin trying…

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