TrendWatching: Don't Be Fooled by the Next Investment Fad, Mania, or Bubble [Hardcover]

Ron Insana (Author)

Book Description

Publication Date: November 5, 2002

Plummeting stock prices. Decimated 401(k) accounts. Shocking corporate scandals.

Thus is the beginning of the twenty-first century. The boundless prosperity of the 1990s is now a remnant of history. With the turn of the millennium came a national reversal of fortune. In a period of under twelve months, the Nasdaq Composite index lost over 60 percent of its value, costing average Americans billions of dollars.If only we could've seen it coming.

But perhaps it wasn't our lack of vision that blinded us to the approaching disaster. Perhaps all we needed to do was change our perspective. Too often we invest on whims and headlines, instincts and hot tips. We focus on the short-term possibilities and ignore the long-term picture.

In this groundbreaking account, best-selling author and renowned CNBC anchor Ron Insana proves that we can profit from the best of times while preparing for the worst. Through an impressively illuminating investigation of financial market bubbles, manias, and trends, Insana shows how to predict confidently the seemingly erratic financial market booms and busts, getting in while the getting is good and getting out before we are gotten.

We've all heard the adage: History repeats itself. In economic terms this truism could not be truer. Delving deep into the history of American investing, Insana’s enlightening study charts both well-known and widely overlooked events, proving definitively that the ups and downs of financial markets follow astonishingly similar patterns. Bubbles replicate those before them, trends imitate other trends, and the cycle repeats itself time and again.

With keen insight, Insana, one of the world's top business journalists, will teach you how to recognize key signs and indicators so that you can determine when a bubble is forming, how long it will continue growing, and at what point it's going to burst.

Too often, the public is the last in and the last out of the game. We lose money because we react to the decisions of others rather than anticipating fads on our own. Insana's eye-opening investigation will teach you how to stop following the herd and start finding your own way to investment success. Drawing on concrete evidence from the past to forecast the real-world changes of the future, this fascinating study paves the path for more secure, more dependable, and more profitable investing. It's your money.

Editorial Reviews

From Publishers Weekly

Insana has worked as a CNBC anchor throughout the stock market's boom and bust, sharing the good and bad news. But who knew the avuncular personality was such a history wonk? Insana's latest is a breezy overview of investment bubbles through the ages. Thankfully, the author has a skill for boiling down complex events-e.g., currency crises in Asia or the collapse of Long-Term Capital Management-into digestible nuggets. He apparently developed this talent from his television experiences, where he often has 30 seconds to talk about such mind-bending topics as Enron's off-the-books partnerships. Insana's not in the business of predicting bubbles, though, although he does hint that real estate may be in trouble. Rather, this is primarily a history book, and a timely one at that. Perhaps the best proof that Insana knows what he's talking about? He never left his plum CNBC anchor job during the dot-com bubble, even when it was considered old-fashioned to be collecting a paycheck.
Copyright 2002 Reed Business Information, Inc.

From Library Journal

CNBC anchor Insana (The Message of the Markets) has chronicled past investment fads and bubbles to provide lessons to prospective and current investors. He asserts that it's "not enough to study, observe and comment on financial folly." Investment fads will continue to happen, and by using historical information investors may recognize the signs of an impending bubble. The author devotes most of the chapters to describing the fads and bubbles that have occurred over the years, such as the Dutch tulip mania of the 1630s, the feverish interest in plank road companies in the 1840s and 1850s, the surge in closed country funds in the late 1980s, and the bull market of the 1990s. The chapters "Trendwatching" and "Endwatching" offer advice on how to identify a mania while it is happening and describe the effects on the investor and the stock market when a bubble bursts. The last chapter contains questions and answers for analyzing the possibility of a future "hard asset" bubble. While well written and offering valid suggestions, this work is better as an historical read than for its predictive value. Recommended for public and corporate libraries.
Stacey Marien, American Univ., Washington DC
Copyright 2002 Reed Business Information, Inc.

See all Editorial Reviews

Product Details

• Hardcover: 272 pages
• Publisher: HarperBusiness; 1 edition (November 5, 2002)
• Language: English
• ISBN-10: 0060084626
• ISBN-13: 978-0060084622
• Product Dimensions: 8.7 x 7.2 x 0.9 inches
• Shipping Weight: 1.2 pounds
• Average Customer Review: 3.5 out of 5 stars  See all reviews (6 customer reviews)
• Amazon Best Sellers Rank: #1,740,419 in Books (See Top 100 in Books)

More About the Author

Discover books, learn about writers, read author blogs, and more.

Customer Reviews

Most Helpful Customer Reviews

6 of 6 people found the following review helpful:

5.0 out of 5 stars Watch out for the road signs - they won't steer you wrong, March 2, 2004

By 

Thomas Mongle (Houston) - See all my reviews
(REAL NAME)   

Amazon Verified Purchase

This review is from: TrendWatching: Don't Be Fooled by the Next Investment Fad, Mania, or Bubble (Hardcover)

CNBC anchor Ron Insana's "Trendwatching," his third examination of the stock market after "The Message of the Markets" in 2001 and "Traders' Tales" in 1996, should have been entitled "How not to lose your bundle the next time around." His stated purpose is to save the individual investor from him/her self during the next investment bubble that's sure to come. And he delivers his message loud and clear, whether it will be heeded or not. Throughout this work, Insana strains to point out that although bubbles occur, you do not have to be a victim; that with the historical knowledge he presents, you can arm yourself to go forth and do battle with market forces to survive and prosper through the bubbles' wild rides.This book is a revealing trip down investment-history lane and should be placed beside every investor's phone or electronic communications device as a reminder not to get caught up in the emotional mania that might be brewing right around the corner. He begins by defining what a bubble is, and borrowing strongly from Charles Kindleberger's (who died recently) "Manias, Panics, and Crashes," Insana traces bubbles starting from our most recent stock market debacle all the way back to Holland's Tulip Craze in the early 1600s. He finds that they all follow the Kindleberger (and Hyman Minsky) script: an invention or discovery sets off "a new era," then easy profits (speculation) fueled by easy credit or monetary conditions lead to the eventual parabolic blow off. Revulsion and recrimination set in as prices plunge back to earth. The insiders will have made out like bandits but the little guys get left holding a worthless bag of stocks. Reforms are instituted to correct the excesses. Then the stage gets set for the next bubble which will be of a different variety but of the same nature as the one before.The writing is crisp and the language is lucid. It's as interesting as it is educational. Where I would have wanted more insight concerns Insana's statement, "Bubbles, while useful in the building of transformational industries, are destructive when it comes to the financial well-being of the individual investor." That sounds like he's a bubble buster. Yet, he frequently references high-tech venture capitalist Robert McNamee who contends that without bubbles nothing is ever accomplished. So which is it? Can progress really happen without these manias in which we literally throw money at the "new, new thing" of Michael Lewis fame? Thinking along the lines much like the ongoing debate about what part adversity plays in human accomplishment, Insana raises the question of whether we can build new infrastructure without hurting the losers who invariably get in too late and stay in too long? The question remains to be answered.Another inquiry comes to mind while rummaging through the canal building, railroad building, automobile making, radio broadcasting...and Internet bubbles of the past couple hundred years: What part does politics play in the care and feeding of the "good times" so necessary for bubbles to form and spread. Did political elites of yesteryear encourage earlier bubbles? Although LBJ's Fed chairman, William McCesney Martin, said that the Fed's job was to "take away the punch bowl" just as the party gets started, would politicians sit idly by and watch the Fed (or some other monetary authority) squash a bubble, and with it the jobs and business conditions necessary for their (re)election? Well, we know George Bush did in the early 90s. But more recently, would Clinton have paid no mind to the Fed if it had begun raising stock margin requirements after Greenspan's famous December 1996 "Irrational Exuberance" speech? Did Clinton not learn something from the Republican sweep of Congress in 1994 after Greenspan goosed short term interest rates 100% earlier that year, and long term rates followed by rising 25%? Toward the end of the book, Insana ventures into the future by taking the precepts he has established for the creation of a bubble and plugs them into today's market. It isn't very difficult for him to make the case for hard assets being the next mania. Referring back to Kindleberger, he finds that just about all the ingredients necessary for a hard-asset bubble are in place: easy monetary policy, a weakening dollar, war, high oil prices, strong real estate demand, and an escalating gold price. The only thing missing to set off this bubble is the recognition of the presence of "inflation." When that gains currency in the media, then it's "everybody into the pool" and off we go again. Perhaps the true worth of this book is the graph on the last page - a picture of what Insana has been defining, chronicling, and warning against. Taken from The Bank Credit Analyst newsletter, it is a composite chart of the path all bubbles take. Just fit in whatever current mania is climbing skyward, and if it resembles this pattern...GET OUT! For Insana, that's the real payoff for keeping an eye on the trend.

10 of 13 people found the following review helpful:

5.0 out of 5 stars If You Own Stock, Read This Book, November 20, 2002

By 

Brent Budowsky (Washington, District of Columbia USA) - See all my reviews
(REAL NAME)   

This review is from: TrendWatching: Don't Be Fooled by the Next Investment Fad, Mania, or Bubble (Hardcover)

While millions of Americans might feelbewildered by the confusion aroundthe market and turned off by muchof the media hype surrounding themarket, this book and its author arethe antitode.Ron Insana comes from the first tierof financial journalists who taketheir work seriously and provideperspective and insight that areuseful to anyone navigating reallife investments with real lifeconsquences for their financialsecurity. Lou Dobbs of CNN, NeilCavuto of Fox and Lou Rukeyser ofCNBC join Insana in this smallhigh quality circle of first ratemarket commentators and thinkers.This is a book about perspective andhistory. It is the history of megatrend market forces such as theTulip Mania from centuries ago andthe Japanese crisis that continuestoday, that Insana discusses andexplains. And its this historythat Insana reminds us offers theperspective so often missing today,a world of market bubbles andcrashes and scandals and confusion.Yes, they went crazy buying andselling Tulips and real estate atdifferent times in disparate partsof the world, just as they (we)went crazy buying and selling techstocks during the Nasdaq craze.As Insana reminds us, the marketevents we go through in our lifetimes,the good and the bad and theemotional frenzies up and down,are not unique to us. These kindsof megafrenzies have happened beforeand there is much we can learn fromhistory, to avoid mistakes thatseem to be repeatedly made, and tounderstand opportunities that maynot seem apparent in the heat ofthe moment and the emotionalism ofthe crisis.If you're disgusted with the marketand vow never to invest again, readthis book. And if you get thatcrazy feeling that you just haveto buy some stock today, thisminute, right now, you should alsoread this book. Because in the end,as is often said and as Insanareminds us well, those who learnfrom history are less likely torepeat its mistakes, and morelikely to prosper. In the meantimeread these true tales of marketmanias, remember that anything toogood to be true usually isn't,remember that fear and panic arenot the best ways to build financialsecurity. As you plan your financialfutures this book is invaluable byentertaining us, and reminding usof the obvious, which we so oftenforget.

3 of 3 people found the following review helpful:

4.0 out of 5 stars History repeats itself, March 18, 2006

By 

Pitt Swimming (Austin, TX) - See all my reviews

This review is from: Trendwatching: Don't be Fooled by the Next Investment Fad, Mania, or Bubble (Hardcover)

Mr. Insana wrote this book to inform investors that history does repeat itself over and over again. He is specifically referring to "investment bubbles."

He shows graphically and textually the similarities and causes of many of the great speculative bubbles throughout history. Some of them include: Mississippi, South Sea, real estate, Japan, NASDAQ, etc.

Many "bubbles" are described. They are easy to understand although most don't go into a lot of detail. Mr. Insana quotes many other references to clarify the stages of investment manias.

The book was easy to read and would recommend this book to someone who wants more clarity on investment bubbles and wants general overviews of famous investment crashes throughout history.