A look at The Dines Letter
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Everything Bug A look at The Dines Letter |
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James Dines is an institution. Publishing since 1960 - that's forty years - the Dines Letter is one of the oldest financial newsletters around. And it stands out in a number of respects.
First, it is probably the most erudite newsletter around. Dines writes with flair and style, incorporating historical perspective, technical analysis and psychological insight into every issue.
If you're looking to improve your vocabulary, read Dines. Every issue contains at least one, and often two or more historical discussions of the etymology of some word. For example, in discussing the possible end of the Major bull market in the October 20, 2000 issue, he starts by noting that German burial squads in the Middle Ages counted each corpse as a "head" - in Latin, caput. The French used the term capot to mean "having no tricks at cards". In any event, whether from the French or the Germans, the word evolved into the English kaput, meaning "finished, done for". Only after this discussion of the origin of the word does Dines ask "Is the bull market kaput?"
Secondly, Dines is heavily into psychology. His most recent book is How Investors Can Make Money Using Mass Psychology (1996). He uses his own indicator - the Dines Greed/Fear Oscillator - extensively in determining buy and sell points.
Thirdly, he covers a broad range of topics - from precious metals to currencies to the Internet to market analysis to health. The health articles have little to do with the stock market but are sort of a pet interest of Mr. Dines. The aforementioned October issue discusses "Do Cell Phones Cause Brain Cancer?". His conclusion? We don't know for sure, so be prudent and cautious.
Historically Dines began as a precious metals devotee. He is keen on being first in discovering new trends and calls himself The Original Goldbug. To this day he maintains a solid core position of precious metals stocks as a safety net in his recommended portfolios.
He also lays claim to having pushed Internet stocks long before they were discovered by the general public and calls himself The Original Internet Bug. He has long promoted four key stocks - Amazon.com, America Online, CMGI and Yahoo - as The Four Horsemen of the Internet - a core portfolio he says everyone should have and hold for the long term.
And more recently, he has been keen on palladium and calls himself The Original Palladium Bug.
The psychological factor is uppermost in most of Dines's analyses today. In his book he introduced what he calls "Dinesisms", aphorisms of psychological insight into the workings of the mass mind. He also introduces certain Dinesian jargon, such as "the Herd" - the mainstream thinking of investors, and "the Hive" - the mainstream thinking of society. As a contrarian, Dines urges readers to go opposite a stampeding Herd or Hive.
He is extremely fond of acronyms and, unfortunately, this is the one annoying feature of the Dines Letter. His more than 35 Dinesisms all have acronyms. And while you get a handbook with your subscription which lists all the Dinesisms and their acronyms - it is really hard to remember them all (or even just a few).
For example, Dinesism # 1 is "A trend in motion will continue until it actually ends" which he shorthands to DITREND. Or Dinesism # 4 - "An uptrend is bullish and a downtrend is bearish; don't think, look" or DILOOK. Or # 12 - the Dines Theory of Positive Negativism - "When nearly everybody's stock market opinion is unanimous, go the other way" or DITPON. There's DITREMO, DROLL, DIRGS, DIGFOI, DIBLASTCAT, DIBRAIN, DIGPLAT and DINPIVOT amongst others. You get the picture.
The annoying thing is he uses the acronyms in the articles all the time without extending the acronym. So he writes in the March 31 issue, for example, "There has been a subtle shift in Mass Psychology. Near last October's Bottom, many asked 'Why should Internet stocks go up?' But now many ask 'Why should Internet stocks go down?', a classic example of DIMAPSO in the Mass Psychology book". Heck! DIMAPSO isn't even one of the Dinesisms included in the handbook!
In spite of all that, the Dines Letter is an interesting, if somewhat long-winded read. And he has proven to be remarkably perceptive. He correctly predicted the Internet bull market years before it happened. And in January he wrote that "we must now regard the increasing optimism toward the Internets as a cautionary sign - by Dinesism #12, the Dines Theory of Positive Negativism (DITPON)". In fact, he predicted that the subsequent pullback could be precipitous, which it was.
Because I like my newsletters to CATTP (concise and to the point) and I find EUOUA (extensive use of unexplained acronyms) to be AITE (annoying in the extreme), I'll have to think twice when it comes time to renew the subscription. But since I do get it fairly cheaply since I buy it as POAPOFWAMJ (part of a pool of fellow workers at my job) I probably will renew. After all, there is only one James Dines!
Click on the link below for an overview of what you get with the Dines Letter as well as links and subscription information.
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