Bob Farrell is a Wall Street legend with over 50 years of experience in crafting his investing rules. He spent decades as the head of research at Merrill Lynch, establishing himself as one of the leading market analysts on Wall Street. He has seen and done it all. He became a pioneer in sentiment studies and market psychology, has gained universal respect and admiration, and his insights and market wisdom have stood the test of time. His insights on technical analysis and general market tendencies were canonized as "10 Market Rules to Remember" and have been distributed widely ever since. He was at Merrill Lynch for half a century before he retired in 2004. He was chief market analyst until 1992, when he assumed a new role as senior investment adviser. After retiring from Merrill in 2002, he formed Farrell Advisory Associates and continued to write for a limited group of institutional clients for another 15 years. He credits mentor and head of research William Dunkak with teaching him about the markets.
Excesses in one direction will lead to an opposite excess in the other direction.
There are no new eras – excesses are never permanent.
Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways.
The public buys the most at the top and the least at the bottom.
Fear and greed are stronger than long-term resolve.
Markets are strongest when they are broad and weakest when they narrow to a handful of blue-chip names.
Bear markets have three stages – sharp down, reflexive rebound and a drawn-out fundamental downtrend.
When all of the experts and forecasts agree- something else is going to happen.
Bull markets are more fun than bear markets.
He authored the firm’s Market Analysis Comment which was distributed to individual and institutional clients worldwide beginning in 1971.
He also developed a number of innovative technical analysis tools and techniques, such as the Farrell Put/Call Ratio and the Farrell Three-Year Cycle.
He recognized the importance of investor psychology and contrary thinking to markets.
He was the first to use the term “sentiment” analysis to describe psychological indicators which is used extensively today.
Figuring an Ivy League degree would make him more marketable, he studied under Benjamin Graham and David Dodd.