By James Dines
The Dines Letter

       It has taken us many years to think out some of the market’s deepest and most elusive secrets, culminating in the 65 Dinesisms and other principles laid out in your editor’s book Mass psychology and the DVD Video Master Course of Investment Strategy. We have also recommended Mackay’s book Extraordinary Popular Delusions to be read alongside Mass Psychology, its modern version. Some of our principles fly in the face of the so called “consensus” and current wisdom. For example, we credit Mackay’s work, and also that of your editor’s friend Humphrey Neill, whose pioneering Theory of Contrary Opinion helped lead us toward the Dines Theory of Positive/Negativism (Dinesism #12, DITPON).
       Specifically, for many years TDL has been writing about the unusually frequent declines in Octobers, a phenomenon of which the public first really became aware in the 1980s, but these days is widely bruited on business TV. Yet, even now the Mass still has it wrong: declines usually end in Octobers, which is why TDL baptized it “the bear-killer month.”
       For the record, we note that there is still not even the slightest public awareness of Dinesism #29 (DINPIVOT) discussed in the Mass Psychology book (page 333). The most important “rule” in the stock market is that there are no rules. However, these are guidelines, which is all that Dinesisms are, playing percentages, better than nothing, in the trackless wilderness of hauntingly lonely, being first, stock-market forecasting.
       Stocks: We count that the Dow in the 61 Octobers since 1950 has been up 36 times (59%) and down 25 (41%). As noted previously, we baptized Octobers (beginning the fourth quarter of the calendar year) as “bear killers,” and the up months were very significant indeed. Out of a total of 35 bull markets since 1900, October has been the pivotal upturning point after 12 bear markets: 1923, 1946, 1957, 1960, 1962, 1974, 1987, 1990, 1998, 2001 and 2002. Seven of these 12 pivot points mark the beginning of a bull market. This is statistically significant because next to October, the most bull market starts are in July, September and November, with only four each. In view of this record October is usually an advantageous time to buy on weakness.
       Precious Metals: For the past 30 years, both the Dines Gold Stock Average (DIGSA) and Dines Silver Stock Average (DISSA) have been bearish in Octobers, 77% and 70% of the time respectively. DIGSA was up 7 and down 23 times, while DISSA was up 9 and down 21. Around October is usually a good time to start buying them on declines, before gold’s seasonally bullish first quarter.
       Editor’s Note: James Dines is editor of The Dines Letter, P.O. Box 22, Belvedere, CA 94920, 1 year, 14 issues, $295. www.DinesLetter.com.