Stock Trader’s Almanac 2012

The leaves are falling, Halloweeners are readying their costumes, and a new Stock Trader’s Almanac (Wiley) has arrived. The 2012 edition marks the 45th year of this annual publishing tradition. Jeffrey A. Hirsch, Yale Hirsch, and their team at the Hirsch Organization have once again produced an attractive spiral-bound desk calendar chock full of updated statistical data.

This volume follows the standard format. The calendar section takes up about 60% of the book; the rest is devoted to tables, statistical analyses, and personal record keeping.

In the calendar section recto pages are the actual calendar entries, complete with coding for each day. A witch icon appears on options expiration days. A bull icon “signifies favorable trading days based on the S&P 500 rising 60% or more of the time … during the 21-year period January 1990 to December 2010.” A bear icon uses the same parameters to identify unfavorable trading days. To provide even more granularity, beside each date are numbers indicating the probability of the Dow, S&P 500, and Nasdaq rising using the same lookback period. At the bottom of each entry is a quotation. There’s about a five-square-inch space in which to write.

Verso pages provide seasonal data, beginning with vital statistics for each month. Among the wealth of other data analyzed are the January barometer, market performance during presidential election years, market behavior three days before and three days after holidays, the best six months switching strategy, and Wall Street’s only free lunch.

Each almanac highlights the best investment books of the year. This year the top award goes to Ed Carlson’s George Lindsay and the Art of Technical Analysis, which I reviewed in September. The editors are major fans of Lindsay, whom they describe as “a brilliant market prognosticator who made numerous bold and uncannily accurate predictions. He was an intense student of history, market cycles, and repetitive price patterns. From memory, George could reproduce a chart of stock market prices for every one of the previous 160 years prior to his death in 1987.” (p. 114)

Every investor or trader who believes that history provides a guide to the future will do well to have the Stock Trader’s Almanac 2012 on his desk.