With these words, the 89 year old Godfather of Newsletter writers, Richard Russell went Bullish the Dow on March 11th. 

“Yes, I know that this market is uncorrected during its long rise from the 2009 low, and I know that there are risks in buying an uncorrected advance that is becoming uncomfortably long in the tooth, but my suggestion is that my subscribers should take a chance (after all, Columbus took a chance) and take a position in the DIAs.”

“My intuition tells me that there will be an early period [around now] of erratic and uneven scary advance, this to occur while formerly battered investors work up the nerve to enter this market,” Russell predicted.

“Then the action will smooth out as the crowd gathers courage and confidence.Finally, in the last stage of this advance we might see the stock averages rise in parabolic fashion.This will be the time to pack our bags and get out.”

One of the toughest things to do is buy when it is the ideal time to do so. When it is terrifying. For most people that would have been at Dow 6,547 after the shocking 2007-2009 collapse,

For old experienced market hounds like Richard Russell, buying stocks right here at Dow 14,455, up 7,908 points or more than double from the 6,547 low in 2009 must be about as terrifying as it gets! Thats probably why Ben Gersten, Editor for Money Morning, has probably written the article below questioning Russell’s conversion.

The writer of Dow Theory Letters, clearly one reason for Russell’s change of mind was his use of the 100 year old Dow Theory. A theory that is said to have formed the basis for all modern technical analysis through its definition of a trend and its reliance on studying price action. 

You can read Ben’s analysis of Russell’s decision HERE, or click on the link below:

Should Investors Still Trust the Dow Theory as a “Buy” Signal?