Bob Farrell’s Rule #9

Legendary technical analyst, Bob Farrell’s 10 Market Rules to Remember remain relevant regardless of market circumstances.  Here, we feature Rule #9 with the following commentary:

This rule fits with Farrell's contrarian streak. When all analysts have a buy rating on a stock, there is only one way left to go (downgrade). Excessive bullish sentiment from newsletter writers and analysts should be viewed as a warning sign. Investors should consider buying when stocks are unloved and the news is all bad. Conversely, investors should consider selling when stocks are the talk of the town and the news is all good. Such a contrarian investment strategy usually rewards patient investors.