The Market Top Reading List

Every past market crash looks like an opportunity, but every future market crash looks like a risk. 

Morgan Housel 

We’ve recently passed six months since the April 2025 market low.  And when the market has risen this far for this long, investors often get super anxious about that next correction which could wipe out all of those previous gains.

In the course of my work I get to speak with lots of knowledgeable market practitioners, whether it’s a formal interview for the Market Misbehavior podcast, or just an informal chat over Zoom about charts and ideas.  

The general consensus of those recent discussions, the essence of which I totally agree with, is that over the long-term there are plenty of reasons for this market to go much higher.  Innovation drives growth, and it’s easy to get the sense that we are in the early stages of a dramatic growth curve driven by AI and related technologies that could last for many years.

But here’s the thing.  If I told you in 1999 that the internet was the future, and that we’d all have devices in our pockets that would have more computing power than our laptops, and that social media was going to be huge, I would have been right.  Eventually.  Because in 2025, the S&P 500 and Nasdaq are way higher than they were in 1999, driven by all of the above.

But that does not change the fact that 2000-2002 was a pretty rough cyclical bull market, where the companies that were the early predecessors of today’s Magnificent 7 giants got absolutely crushed.  And we also had a fairly painful global financial crisis, along with a number of other tough bear phases along the way, even though the market eventually went much higher.

My point is that the long-term history of the equity markets is a story of economic growth, innovation, and new technologies.  I don’t think that long-term trajectory for stocks is going to change any time soon.

But the path matters.  We don’t go in a straight line from where we are today to this bright future of technological awesomeness years down the road.  There can be lots of ups and downs between now and that bright future!  Instead of being proven right when the markets are higher a decade from now, I’d rather avoid participating in as many of those painful drawdowns as I can.

That’s the real benefit of an investment process rooted in technical analysis and trend following.  You can still believe in the long-term growth trajectory for the stock market.  But you can also believe that there will most likely be plenty of corrections, some going way lower and lasting way longer than most investors will think possible, and that those corrections are avoidable.  Or at least manageable.

I’ve included some book recommendations below if you’re struggling to get your head around the balance between long-term optimism and short-term pragmaticism.  And hopefully by reading and learning lessons from past market cycles, by educating yourself on the tools of behavioral investing, and by tuning in faithfully to my daily market recap show, you’ll be able to navigate whatever happens between now and that distant tomorrow.

Mindless investors assume that an uptrend will last forever, then are completely caught off guard when the market goes through normal corrective moves where the market digests previous gains and sets up for the next uptrend phase.

Mindful investors know that being a long-term bull does not mean you have to sit idly by, watching your portfolio lose value during the speed bumps along the way.  They know that the path matters.

RR#6,
Dave

PS- Need help becoming a more mindful investor, well prepared for the next major market correction?  Our Market Misbehavior premium membership can help, through a combination of courses, commentary, and community!  Use code MMWEEKLY for 30% off the first 12 months on any plan.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice.  The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.  

The author does not have a position in mentioned securities at the time of publication.  Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.