>Dow Theory for the 21st Century

A person watching the tide coming in and who wishes to know the exact spot which marks the high tide, sets a stick in the sand at the points reached by the incoming waves until the stick
reaches a position where the waves do not come up to it, and finally recede enough to show that the tide has turned. This method holds good in watching and determining the flood tide
of the stock market.

Charles H. Dow wrote those words over 100 years ago on January 31, 1901, and they are as true for the twenty - fi rst century as they proved to be for the twentieth century. No book on the Dow Theory should start or fi nish without his classic quotation, as it is the very essence of the theory . For the record, the rest of the quote that appeared in the Wall Street Journal that day continued: “ The average of twenty stocks is the peg which marks the height of the waves.
The price - waves, like those of the sea, do not recede at once from the top. The force which moves them checks the infl ow gradually and time elapses before it can be told with certainty whether high tide has been seen or not. ”

I wrote this book so that a serious investor will be able to find almost all he or she needs to know about the stock market and how to become fi nancially successful in one place. I don ’ t pretend to know all there is to know about either subject, but I have been an avid market student and successful personal investor all my professional life. If you have aspirations to know the important things about the stock market and are not interested in the fl uff, then this book is for you.

You will soon recognize that most of this book is not sexy or even exciting, and some of it may not even be interesting to you, but it contains a wealth of valuable insights, historical precedence, and useful and usable information. I am not a writer by trade, so I apologize up
front for any shortcomings in that department. I have spent a lifetime with the stock market, starting in college and extending through a short military career, a full financial business career, and even longer “ working ” retirement. I started writing a market timing letter to colleagues in the stock brokerage business in 1977 at the behest of senior
officers in my fi rm, a letter that I continued after I retired. Out of that grew an Internet subscription letter that has attracted subscribers from most of our United States and numerous foreign countries. The purpose of my market letter and of this book is not to make
money personally — the Web site www.TheDowTheory.com is owned by other members of my family who are occasionally surprised by a dividend. My wife and I have been fortunate to have been financially secure for many years, and now it is time to share the “ family secrets ” with the rest of you.

Do not be afraid to skip over segments of the book (such as the background of Charles Dow or William Peter Hamilton ’ s Editorial, or my own, and other perhaps tedious subjects); you can always come back to them. Concentrate on the big picture and review those areas that don ’ t at first sink in. In the end, I think you will feel much better prepared to face the stock market than ever before. I sincerely hope this book will show you the way to a better understanding of
the ingredients that make up the world of finance, specifically the American stock market, and that understanding will lead you further to great investment success.

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