Editor's Note: Lee Adler has more than 44 years of experience trading and investing, as you'll see. You're going to be hearing a lot more from him in the future, because he's taking our newest free research service, Sure Money, "big time" next week. You'll have the chance to join him, but for now, he's going to show you why these four little words just might be the most profitable recommendation you've ever had. Here's Lee...
"Don't fight the Fed" was a refrain I heard often from the old men in the customers' gallery at Walston & Co.'s Philadelphia, Penn., office back in the late 1960s. I was a teenager at the time and sat with them after class.
I tried to understand what these mysterious wise men meant as I watched the ticker tape crawl along, showing a trade from New York every few seconds...
"IBM...200s... GM...1000s... PRD...100s... XRX...10,000..."
The ticker would pause for a few moments, then more trades would come.
Some of these old men were known as "tape readers" or "tape traders." They saw patterns in the movements of the ticker and bought and sold stocks based on those patterns.
They made money, too, and plenty of it.
"Don't fight the tape. Don't fight the Fed. The trend is your friend," they said. I heard it so often, I couldn't stop it from constantly playing in my head.
I still can't, to this day.