The Stock Trader's Almanac with Jeffrey Hirsch

Sure, of course. Well, I mean, as you alluded to, you know, nature has cycles to it. There's lots of other cycle work out there. You know, we just lost Peter Eliades, who's one of the main cycle guys out there, and my mentor, one of my other mentors, Larry Williams, you know, a big cycle guy. But the seasonal cycles exist. We all revolve around them ourselves, whether it's weather or travel or family or cultural. And people are, you know, human beings are creatures of habit. And they are also creatures of habit with their money and their investments and their finance. And you know, institutions have patterns, have cycles. They're creatures of habit as well. There's a few particular things there, but to go back to the beginning, you know, my father, who passed away in 2021 at the ripe old age of 98 years old. It was a full, impressive life.

Back in the '60s, he was called to work with his late cousin, our cousin who ended up being my godfather, Sam Coslow, who was a songwriter and a movie producer. He produced Copacabana with Carmen Miranda and Groucho Marx, and wrote 'My Old Flame' and 'Cocktails for Two.' He was my godfather. But Sam had sold his... my first child after him, Samson Coslow. He was a student of the market. He had sold his publishing company to RCA for stock way back. Stock went down, lost some money. He became a student of the market. Over the years, he did a bunch of things, and then in '61, I believe it was, he put out an ad in Barron's to start this new service called Indicator Digest.

You know, one of those A/B split ads, you know, two different headlines. It hit. He called on my father to run operations set up out of Palisades Park, New Jersey, and it ended up being a proving grounds for analysts, writers, you know, market commentators. And a few years later, my father had the epiphany to take all of these market cycles, patterns, indicators, trends, and seasonality and put them together in a calendar format so that he, along with everybody else, could follow his own schedule along with the markets. And he incorporated in '66, just before I was born, with my mother, what, six months pregnant with me. And then, you know, spent the next 18 months developing the almanac and compiling everything. And lo and behold, I was, you know, born, bred, weaned, raised on seasonalities, patterns, and trends. And it hit with Wall Street. It's been on the desk of top money managers for seven decades. We are in our 60th year, the 60th anniversary edition, 2027, is coming out imminently. And the fact that it's been around so long is kind of a testament to the veracity and efficacy of seasonals and cycles and patterns, and, you know, I guess, you know, an endorsement of the work that we've done over the past 60 years.

Yeah. Well, you know, he had a degree in music at Brooklyn College on the GI Bill from World War II. He never saw action. His brother did. His brother was in the Battle of the Bulge, but Yale was bounced around from training school to training school, you know, where they had too many air traffic controllers, and then went to this and that. Anyway, ended up at the officers' club cleaning up, and there was a piano there. And, you know, I mentioned his cousin, you know, was in the business, and he ended up, you know, getting a degree in music. And there's a pattern I've seen, pun intended, a pattern I've seen with, you know, technical analysis and psychoanalysis with music being, you know, part of their discipline. And so he did see patterns. And there was a point when I started working for him in the early '90s full-time, when we were sitting around the conference table with some different analysts and writers, and he was making—I forget what the observation he was making was—but nobody else got it, and I got it, and it clicked, and I understood how Dad was thinking. And that was sort of the beginning of me really becoming enamored with the whole discipline of seasonality and cycle study.

Let's see. I was under 30, late mid-20s.

Yeah. And it was just sort of an awakening for me that I got, you know, it clicked with me more than whereas it didn't for anybody else in the room. And they were all, you know, smart, bright, seasoned analysts and market commentators and observers. So, it made me feel good.

I'm not sure he realized it at the moment in there. I think it was kind of personal, but, you know, as he would say, he would say, 'Not bad.' You know, that was his great or excellent side of Seal Brew. Not bad. Not bad, son.

I'm more of like an A&R man, aficionado. It's kind of maybe skipped the generation. My younger son's a very talented guitar player. He's studying music industry. And his brother can carry a tune as well, but I'm sort of a music historian.

And just a fan of all kinds of, you know, genres.

Well, the best six months and the six-month switching strategy, you know, and the September weakness that we're, you know, living right now, and the October phobia. I mean, these are a couple of the things that are in the 2027 Stock Trader's Almanac. Like, I have a retrospective page about, you know, the top five seasonal patterns that have stood the test of time, and the best six months and October are two of them. Even though September is really the worst month, but for me, like the things that I remember discovering and, you know, latching on to is some of the more, you know, down in the weeds kind of stuff. Some of the things that have shifted, like the monthly cash flows, the daily, you know, patterns between each month, the best days of the month, the best hours of the day. I mean, that was some of the work I did by hand with a pen and paper, graph paper and an adding machine and running numbers. And those were like my earliest memories. I did that even before I started working for him full-time. And that was... some of those patterns have shifted a bit more than the best months. But that discipline, that exercise of discovering these things by hand and really doing the calculations was invaluable to me as to how to observe and how to be accurate. And, you know, like especially in this day and age with AI, you know, it's helpful, it's great, but there's a lot of erroneous data, there's a lot of, you know, assumptions that are made. They pull up stuff that's dated, whether even if you're looking for a little background on the economics or the war developments or whatever, just for some background, and it's dated and late. So, you really got to check facts and check numbers. And those are a couple of the half-hourly data patterns, which is also something that is consistent and has persisted despite high-frequency trading and algorithmic trading and the 24/7, you know, market with crypto and everything. We still see similar patterns where you get a weak point around 2:00, 2:30 East Coast time, New York time, when everyone, you know, comes back from whatever break for coffee or Diet Coke or something, and the market tends to bottom there. The afternoon rallies are still there. So there's some of those half-hourly trading patterns that are still persistent. And that was one of the first things I ever did, and I did it by hand.

It's a reminder and constant refresher course of the times of year where, you know, the market's more likely to be very positive and then when it's likely to be weaker. And September is a quintessential example. Back, you know, after Labor Day, traders come back to work, back to school, they clean house, there's end of third-quarter portfolio window dressing. Yes, there was some news developments from, you know, the Middle East and the bond market and the Fed. But a lot of that stuff was still going on before Labor Day. And what happens when the month turns and people are looking to make changes and clean up portfolios and people actually come back? I mean, we notice, you know, in the communications we make with clients and subscribers and followers that it's very quiet until, you know, especially late August and through most of the month people are away. I mean, this is the habitual behavior of human beings. It keeps getting repeated. So people come back after Labor Day and the stuff hits the fan. You know, the same things were happening. What changed September? And part of it is the quarterly behavior of institutions. And I've had this discussion with some institutional people that, you know, they have to do things on a quarterly basis. That's the way the rules are set up. And then there's the October 31st 40 Act fund or mutual fund deadline where funds, ETFs and the like, most of them are October 31st fiscal year where they have to reconcile accounting ahead of year-end calendar and the previous year's 12 months ending October and the current year's 10 months. And it creates this vortex of selling where they're cleaning house and tightening up portfolios. And then, you know, that creates this September of work tasks, this end of third-quarter portfolio addressing and the mutual fund deadline.

This reminds me of another institutional-driven behavior. You know, when funds are set up, they have to be invested, you know, by law and by, you know, ERISA, they have to put money in the market. So what I, one of the things I noticed way back in the '90s, where my father and I were looking at the monthly cash flows, I'm just going to go back to this, is one of the things I did by hand, where, you know, it used to be the last trading day of the month and the first few of the next month was the monthly five-day bulge, was where most of the market's gains were made. Rest of the month, the market went nowhere or went down. Then we see this mid-month spike around the 9th, 10th and 11th trading days of the month. What's going on there? This is the automatic payroll deductions going into the 401ks, retirement accounts going into the market. The fund managers get money, and what do they have to do? They got to put it into the market. So that's one of the sort of habitual types of repetitive behaviors as an example that creates these seasonal patterns. And each month has its own personality. You know, we talked about August, beginning of August is very weak. The turn of the month right around the end of October, beginning of November, one of the best trades of the year for the bulls. You know, there's certain things like that that stick out on the calendar.

Yes, I pretty much eat our own cooking. What we publish in the newsletter with the stocks and the best six-month switching strategy and the sector trades. I'm not a day trader. Unless I'm taking a position or exiting a position, then everyone becomes a day trader to some extent. I use buy limits, good-to-cancel orders outside real-time trading hours. I pick the numbers. I try to stick as close as possible with, you know, real-world events to what we publish in our newsletter, Almanac Investor, and we do pretty well. So, I let the market do it. You know, you don't get everything, but over time it works out and we do pretty well. So, yeah, I'm sort of a swing trader, I guess you'd say. I trade the best and worst months, the sector seasonality trades, and our stock picks, which are a combination of seasonals, fundamentals, and technicals.

There's still a lot of skeptics. There's still a lot of naysayers. And then the other reason is that people are creatures of habit. We still do the same things. We go on our summer vacations the same time every year. We have our, you know, Rosh Hashanah holiday, Thanksgiving holiday, Christmas holiday, Easter holiday around the same time. We get up around the same time every day. We pay our bills around the same time every month. You know, there's a cyclical pattern to how people operate financially in their own home finances, their own business finances, and then with their investments.

I'm a fan of the naysayers. They keep me in business.