Develop a Search Strategy 71some of the lowest valuations in decades, the markets can start
advancing before the slightest hint of good news from the media.
Investors should rely on the media as one source of information.
Similar to the analogy regarding the stock markets, let the media
inform but not guide you in what to do. As investors, we need accu-
rate and honest journalism. We are fortunate to have many excel-
lent sources, including BusinessWeek. But investors must remember
the role of the media: to provide news commentary, not investment
guidance. The media is staffed by journalists, not market analysts.
And lest we forget, by the time information reaches the front
cover or front - page news, it ’ s already well known by the market.
Annual issues proclaiming next year ’ s hottest mutual funds or hot-
test stocks are not new or original ideas. Investors are rewarded for
fi nding value when everyone else is leaving the party. By the time
the media gets hold of investment ideas, the smart money has
already been there. Excitement is an investor ’ s worst enemy; it leads
to paying high prices to participate with the herd mentality. An effec-
tive search strategy relies on knowing where not to look just as much
as where to look. Let the media do its job of providing up - to - dateTable 5.2 Secular Bull/Bear Market Returns, 1900–Present
Market DJIA Start DJIA End Starting P/E Ratio Ending P/E Ratio
1901–1920 Bear 71 72 23 5
1921–1928 Bull 72 300 5 22
1929–1932 Bear 300 60 28 8
1933–1936 Bull 60 180 11 19
1937–1941 Bear 180 111 19 12
1942–1965 Bull 111 969 9 23
1966–1981 Bear 969 875 21 9
1982–1999 Bull 875 11497 7 42
2000–???? Bear 11497 ???? 42 14:?
Copyright 2005, Crestmont Research (www.crestmontresearch.com).CH005.indd 71CH005.indd 71 9/2/09 11:08:04 AM9/2/09 11:08:04 AM