The Bear Book: Survive and Profit in Ferocious Markets [Paperback]

John Rothchild (Author)

Book Description

Publication Date: October 9, 2000 | ISBN-10: 0471348821 | ISBN-13: 978-0471348825

"Rothchild finds some compelling evidence that a Bear might be lurking in the woods. [He] addresses the subject with candor."-The Wall Street Journal

"In a timely antidote to the fever now raging in the markets, Rothchild's new book dishes a long dive when investors least expect it." -Washington Post Book World

April 14, 2000. The Dow drops over 600 points. Investors the world over receive a startling reminder that "what goes up, must come down." Today's exceptionally volatile markets exemplify the hair-raising financial instability that most analysts see as a continuing trend. More than ever before, investors deserve a sound explanation of how to profit-or minimize loss-in such a climate, and be prepared for the inevitable dips. In Survive and Profit in Ferocious Markets, bestselling financial writer John Rothchild provides a rare understanding of profit making when the markets are tenuous, with volatility at every turn. Here is specific, comprehensive, and timely information on:
* Where the economy is going and how exactly to invest in it
* How investors can negotiate the awkward terrain between the new and old economies
* Investment strategies at different stages of a volatile market
* The psychology of investing, a history of the markets, and biographies of prominent investors, including Roy Neuberger and Philip Carret

With wit, wisdom, and a penchant for telling a good story, Rothchild provides all investors, from novices to pros, with the tools to protect their investments and prosper.

Editorial Reviews

Amazon.com Review

A recent New Yorker cartoon shows a corporate CEO type addressing his lieutenants with the words, "And, while there's no reason to panic, I think it only prudent that we make preparations to panic." That man might be John Rothchild. One of America's most elegant and witty writers on money, Rothchild offers prudent advice on preparing to panic in The Bear Book. It is an amusing disquisition on the history and psychology of the U.S. stock market, offering useful suggestions on how to survive and even thrive when the stock market enters a free fall.

Note that's not "if," but "when." Rothchild makes clear that steep and prolonged market drops have long been a regular occurrence, except in the '90s so far. History shows that when optimism reigns as it seems to now, the carnage is likely to be all the worse. Not a happy message, but maybe an important one. Looking back on past bear markets, Rothchild suggests where to find safe harbor, pointing readers toward certain stock sectors, some foreign markets, and bonds. Perhaps surprisingly, gold does not make the list, and Rothchild explains why. Even the most bullish will enjoy Rothchild's acerbic observations on market psychology and his good-humored tweaking of various famous market commentators and other Wall Street emperors whose nudity, when it comes to foreseeing the future, Rothchild is happy to point out. --Barry Mitzman --This text refers to the Hardcover edition.

From Library Journal

This book is not about warm, furry animals who inhabit Yellowstone National Park but about "bears" who roam a far different place called Wall Street, along with other animals called "bulls." In simple investing terms, bulls are buyers of stocks and bears are sellers. While everyone (well, almost everyone, according to Rothchild) loves a bull market, not many relish a bear market. Bearish investors have never had an easy time of it historically, and some notables like "Sell 'em" Ben Smith have even been vilified. But the author provides plenty of statistics to show that bear markets are inevitable. What's an investor to do? Rothchild (Learn To Earn, Wiley, 1997) presents a number of options, and while his advice is solid if not terribly original, the haphazard organization and leaden prose may leave the casual investor even more confused than before. To paraphrase the author, if this book were a stock, it would deserve to be shorted. Not recommended.?Richard S. Drezen, Washington Post News Research Ctr., Washington, DC
Copyright 1998 Reed Business Information, Inc. --This text refers to the Hardcover edition.

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Product Details

• Paperback: 304 pages
• Publisher: Wiley (October 9, 2000)
• Language: English
• ISBN-10: 0471348821
• ISBN-13: 978-0471348825
• Product Dimensions: 6 x 0.7 x 9 inches
• Shipping Weight: 13.6 ounces (View shipping rates and policies)
• Average Customer Review: 4.0 out of 5 stars  See all reviews (13 customer reviews)
• Amazon Best Sellers Rank: #406,467 in Books (See Top 100 in Books)

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Most Helpful Customer Reviews

12 of 12 people found the following review helpful:

4.0 out of 5 stars Every individual investor needs to read this book, July 19, 1998

By 

S. Sudhindranath "sudhi" (California, USA) - See all my reviews
(REAL NAME)   

This review is from: The Bear Book: Survive and Profit in Ferocious Markets (Hardcover)

John Rothchild has done a great job of outlining and explaining what bear markets are, what leads to them, what to expect in bear markets, and when to expect them, and what to do to survive and profit when faced with a bear.

Rothchild explains under what circumstances the mantra of "buy and hold" would work and when it doesn't work. He also destroys another present-day myth that earnings and stock-prices march in lockstep (they don't -- surprise!)

There are sections devoted to the various other players in the markets -- the Cassandras, the Doomsday best-sellers, New Era thinkers, eternally bearish newsletters, Fed Watchers, and the "Magazine Cover Jinx" phenomenon. I think Rothchild does a very fair job in evaluating all the above.

Rothchild comments at length on whether or not there is any truth to statements that the world's fortunes are linked as never before (something the investors kept hearing repeatedly until the Asian crisis in 199! 7, when "the tune changed").

Next, Rothchild goes on to suggestions on how to "bear proof the portfolio". He lists sectors that are expected to do better than the market when things turn bearish. He also examines the relative merits of cash, bonds, gold and stocks that pay dividends, and how they can be expected to fare when things get tough.

And coming out of a bear, where should one invest? There is an interesting chapter, titled, "Jumping On The Next Bull" that has some very useful advice on what to do in such a situation.

Rothchild also demolishes the myth that is harbored by many of today's investors that their mutual fund managers know how to bail them out. Most of them will fail to do so. However, Rothchild provides information on how mutual fund investors can improve their chances, in the chapter "Bear-friendly funds"

Finally, the book has interviews with three "survivors" from the Crash of '29 ! -- three nonagerians who are still actively managing money ! today!

On the downside, the author seems to overstate the bearish case. Whenever he refers to market indexes making highs and then getting back there after a downturn lasting several years, he uses the raw index numbers and doesn't take dividends into account, even though he doesn't forget to take inflation into consideration. Bear markets are scary enough that Rothchild needn't have made them look any scarier!

Also, some of the figures seem to be inaccurate -- the graphs and the explanations don't seem to agree with one another. And there are a few typos here and there.

All in all, this book is very useful as it helps investors get a glimpse of the darker side of the markets and deserves to be on the bookshelf of every investor.

6 of 7 people found the following review helpful:

3.0 out of 5 stars History of the stock market; don't take too seriously, enjoy, August 21, 1998

By A Customer

This review is from: The Bear Book: Survive and Profit in Ferocious Markets (Hardcover)

I had the chance recently to read "A Fool and His Money" by the same author, and enjoyed it: he described a comic series of mishaps as he sought to replace employment by investing. (A similar book about a pilot investor losing all in a few years appeared around 1960).

I tend to be a bear by now, so I thought I would agree with this book. The surprise for me was the anecdote-filled journey through markets of the last century - the ups-and-downs come alive in this book. He has a wry chapter where he points out that "Profit from the coming collapse" books appear every year or two, rain or shine, for the last 15 years; in that sense 1998 is more of the same. The author is a Harpers/Atlantic type journalist who aims to be erudite and entertaining at the same time.

No, he doesn't have secret advice on how to make a killing by shorting stocks now (he covers the most recent bear funds like 'Prudent Bear' of David Tice). He explains why hedge funds may not work, may soak huge commissions, and why bears & shorters are tax-disadvantaged.

Another witty chapter is "Where are the Bears' Yachts?" - even the brightest <can't> consistently pick the sorriest guaranteed future losers and win millions by shorting them.

10 of 13 people found the following review helpful:

1.0 out of 5 stars This book is completely worthless., August 14, 1998

By A Customer

This review is from: The Bear Book: Survive and Profit in Ferocious Markets (Hardcover)

I am an attorney who specializes in reorganizing publicly-held companies under chapter 11 of the Bankruptcy Code. So I tend be be cautious by nature when it comes to investing and do in fact believe a bear market is imminent. However, I was terribly dissapointed with this book and found it to be a complete waste of time.

It's level of analysis consists of:

1. Stocks go up in bull markets. 2. Stocks go down in bear markets. 3. Nobody knows when a bear market will come.

Well, duh.

The book does not purport to advise readers how to predict a bear market, how to invest in anticipation of a bear market, or even what to do in a bear market. (On this point, the book says, in effect, sometimes bonds are good, sometimes they aren't).

So what was the point of the book? To cash in on the current wave of interest in books on investing.

Save your money.