Do you find yourself wondering why financial market bubbles occur and how to protect your investments from the next crisis? What caused the dot.com bubble in the 90s, the mortgage market meltdown in 2007-08? What role did Fed easy money, high government spending and trade deficits with the Middle East and China play in historical market collapses? Can knowledgeable investors spot the next crisis before it is triggered? These are compelling issues in today's elevated financial market.
To develop insight on these questions, Daniel Moore researched the U.S. financial market from WWII through 2013. He compiled the market history, with emphasis on 14 major market corrections in the period. The research led to the discovery of a consistent explanation of why the stock market historically rises to new highs, only to suddenly reverse course. The revelation provides a theoretical framework that can better equip investors to weather the inevitable next crisis.
The Theory of Financial Relativity is a system of ideas explaining why the U.S. financial market persistently rises to unsustainable levels and then falls sharply. The fine points of the Theory are encapsulated in 8 Guiding Principles derived from the correlated effects that dominant forces have on stock market value. The principles provide the basis for developing warning signals of impending market downturns and indicators of when the coast is clear for investing. The Theory sheds light on why asset bubbles are created and persist far longer than rationally expected. The research provides essential knowledge that can make you a better investor by giving you insights on why the market moves.
Learn from history how the U.S. National Debt has reduced both economic growth and inflation, how policy actions of the Federal Reserve trigger stock market actions, how the oil and gold market are integrally related and how the combination of these market forces drive interest rates patterns that signal whether stocks will go up or down. The book contains full-color graphics throughout to make even the most complex concepts and historical information easy to understand. Whether you are an investment professional or novice, the book contains information that will make you a better investor.
E. Willis, Financial Advisor - Book Review
Daniel is who I like to call The Most Interesting Man in the Financial World. Not because he earned his MBA from from Duke's Fuqua School of Business, but because of his life experience.
You see, Daniel has had ringside seats for the biggest financial freak shows of the past 3 decades- Creation of the Mega-Banks who were 'Too Big to Fail', The Internet Hardware Bubble, the Silicon Valley VC Frenzy of the late 90's, and the California Housing Bubble of the 2000's.This life experience led to Daniel's financial opus - The Theory of Financial Relativity.
Daniel's Theory of Financial Relativity is 8 solid rules that explain the long-term and short-term valuations of the stock and commodity (mostly Oil and Gold) markets. Over the long run, the stock market tracks U.S. GDP, but in the short term stock and commodity markets are manipulated by monetary policy (the Fed), oil production, and perceived health of the S&P 500.
Daniel has some more highly useful market observations, like defining the 'Dow Signal'- Which almost always foretells when a market correction is imminent and when the recovery is imminent.
However, unlike most prognosticators of Market Timing Methods, Daniel is wise enough to state that his Theory of Financial Relativity is solid, but not iron-clad. He recommends to use his Theory rules to re-balance or overweight stocks, but not to time absolute entry and exit points from the stock market. (see more)
