The Message of the Markets: How Financial Markets Foretell the Future--and How You Can Profit from Their Guidance (Hardcover)

by Ron Insana (Author) "Professional investors know, both in their hearts and in their minds, that markets know things..." (more)
Key Phrases: smart money crowd, bond market interest rates, weekly range, Wall Street, United States, Federal Reserve (more...)

Editorial Reviews

Amazon.com Review
CNBC's Ron Insana is one of the founding fathers of TV biz-news punditry, and his analytical strength and fondness for puns do not desert him in The Message of the Markets, the followup to his book Traders' Tales: A Chronicle of Wall Street Myths, Legends, and Outright Lies. But despite his trademark perky tone (the section on the Gulf War is titled, "Oil's Well That Ends Well"), Insana writes to fulfill an extremely serious ambition: he wants you to learn to use the fluctuations of the financial markets to actually predict the future.

He's not kidding. Insana insists that the market leaves coded messages, "breadcrumbs on the road to the gingerbread house." With a few charts and a bit of technical explanation, he shows how you could have profited in the Great Salad Oil Swindle of 1963, the crash of 1987, the Asian crisis of 1997, and other riveting fiscal dramas. Insana makes his points convincingly. There's his anecdote about President Kennedy's assassination, when the market began to tank before the news got out. One broker sparked the selloff, saying it "had something to do with the president." The possibly apocryphal explanation: Disappointed dealers at a Dallas brokerage house go back to their office when JFK's parade is halted without explanation. Though nobody suspects the truth, their manager can think of no bullish reasons such a parade would be cancelled, only bearish ones, so he sells early and saves big.

While this story remains unverified, Insana has plenty of verified market-message examples: the 1990 oil spike that heralded Saddam Hussein's Kuwait invasion two months early, the Thai baht crisis that presaged the turning of Asia's tigers into whipped kittens, and the 1993 Dow Jones Utility Average warning preceding the 1994 bond crash. A notable anecdote: one trader deduced a 1980s spat on the border of Egypt and Libya based strictly on upticks in U.S. based oil companies and defense stocks and dips in two international oil stocks and a designer-jeans company dependent on Egyptian cotton.

Can you really predict Greenspan by reading Insana's book? Or is it all just Monday morning quarterbacking? Hard to say. But Insana's book is as fun as the investment game itself. --Tim Appelo END

From Publishers Weekly
Significant world events and financial markets' movements are closely aligned, says Insana, anchor of CNBC's Street Signs and frequent contributor to Imus in the Morning and The Today Show. Among his most notable examples are the precipitous drop in the stock market right after President Kennedy was shot, but before the news of the assassination attempt appeared on the wire services, and the odd spike in oil prices before Iraq began massing troops at the Kuwaiti border. Insana emphasizes the importance of reading market statistics, including index charts and records of stock market performances around the world over time. He wants investors to understand that, like successful stock pickers, they must learn to play detective and look for the reasons for economic up and down turns in order to make more intelligent investments. In the concluding chapter, Insana briefly mentions some of the signs that pointed to a market correction in 2000. By late last year, he notes, only a handful of stocks were going up while many other stocks and indices were declining. Insana's writing is lively, and the book offers insights into the complex machinations of the stock market and a thoughtful historical perspective, but he doesn't offer a prescriptive plan for investment mastery, and readers expecting a guaranteed method of predicting future stock market winners will be disappointed. Agent, Arthur Klebanoff. Author tour; 25-city national radio campaign; 15-city NPR radio campaign. (Oct.)
Copyright 2000 Reed Business Information, Inc.

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Product Details

• Hardcover: 224 pages
• Publisher: HarperBusiness; Stated 1st Edition (10 9 8 7 6 5 4 3) edition (October 3, 2000)
• Language: English
• ISBN-10: 0066620457
• ISBN-13: 978-0066620459
• Product Dimensions: 9.3 x 5.9 x 1 inches
• Shipping Weight: 1.1 pounds
• Average Customer Review: 3.3 out of 5 stars See all reviews (17 customer reviews)
• Amazon.com Sales Rank: #1,766,085 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

18 of 18 people found the following review helpful:

4.0 out of 5 stars Good point - wrong emphasis in presentation, April 30, 2001

By	David D. Yang (Alexandria, VA, United States) - See all my reviews

This is a well-informed and very readable book on the informational value of the financial markets. However, this is not a how-to book on stock picking. What Mr Insana is concerned with in this book is not so much what price movements can tell us about an individual stock, but the macro information that the financial markets can tell us about the economy, geopolitics, major news events etc. There's almost no advice on individual stock picking based on price movements (too noisy), but there are advices on how to choose a job, time the purchase of a new home, move cash in and out of the market etc. based on the message of the markets.

In retrospect, some of the messages from the markets identified in the book are quite prescient. A good example is the rapid deterioration in the A/D line at the height of the Internet bubble. Of course that phenonmenon did not go unnoticed by the market pros. I clearly remember numerous analysts assuring viewers on CNBC that the stock market was not over-valued (and therefore in no danger of collapsing) because so many stocks were in the doldrums!

The book was filled with anecdotes about how major economic and geopolitical events (from Fed rate cuts to border wars between Egypt and Libya) are foreshadowed by unexplained market movements. Had Mr. Insana focused on the rationale behind these movements his argument would've been a lot more convincing. Instead, the book had a tendency to ascribe a sort of magical, oracular power to the market and the "smart money" that makes the market. Of course the real reason is a lot more mundane. Sometimes it's rampant insider trading (as in the oil futures mkt). At other times anyone who has bothered to read a newspaper would have seen it coming from a mile away. A good example is the collapse of the Thai baht. Any regular reader of the Far Eastern Economic Review would not have needed the markets to send a msg - for months the magazine was filled with dire warnings of imminent collapse in its op-ed pages.

Another issue that Mr. Insana did not address is the very important question of how to separate the signal from the noise emanating from the market 24 hours a day. As someone who had (foolishly) dabbled in the futures market, I know first hand that wild swings in the market can be triggered but nothing more dramatic than a 1/2-hr T-storm in downtown Chicago. (I always susepct that if I wait at a 2nd fl. window at the CBOT and sprinkle water on the head of a particular trader as he leaves the building, I can make a killing in soybeans.) In the days of old when the market was almost the exclusive domain of the Smart Money in the know, the msg. of the mkts was probably a lot more reliable than today, when the unwashed masses can steamroll the smart money based on the most ludicrous rumor posted on Pump-n-dump.com. How to separate the grains from the chaff is something we'll have to leave to another CNBC author.

BTW, there really is a web site called pumpanddump.com.

21 of 22 people found the following review helpful:

5.0 out of 5 stars 2 Books My Investment Club Profited From, December 1, 2000

By	Gin "investclub2002" - See all my reviews

This book and Nancy Lloyd's book, "Simple Money Solutions," have turned out to be investing bibles for my investment club. Both CNBC's Ron Insana and Nancy Lloyd have a deep understanding of financial issues and the integrity to present it in an objective way (unlike so many other "experts" who are trying to turn their infomation into a quick buck by appearing on television). Fortunately, my investment club started reading both of these books a few weeks ago and took the time to rebalance our portfolio before it was too late. If we had not read these books we would have taken a huge and avoidable financial loss. Bravo to Ron and Nancy for giving loads of thoughtful information and without a lot of fanfare. We profited from it and I'm sure others can too.

39 of 45 people found the following review helpful:

5.0 out of 5 stars Extraordinary Book, November 22, 2000

By	Jamie - See all my reviews

Whether stock or bond prices are rising or falling there is always some pundit who will be more than happy to attribute it to some canned response like disappointing earnings or political uncertainty. But what these pundits rarely own up to when they make their observations is that they are guessing and usually don't know any more about the real reasons than the rest of us at home. Or, even worse, many pundits will hype a financial offering because they stand to make money if they can stir interest. Not so with Ron Insana or his masterful book. Ron's book does dole out great information and a behind-the-scenes look at what's really going on in the markets from someone who isn't working for a financial services firm. The editors at Amazon made a good call when they named this book one of the 10 best of the year. I also liked one of their other choices: "Simple Money Solutions" by Nancy Lloyd. After seeing Ron interview Nancy on CNBC I bought her book and it is the best Personal Finance book I have ever seen. These two books should be rquired reading for anyone who hopes to achieve financial security.