Liz Ann Sonders and Dying on Euphoria

My favorite quip about the stock market was by Sir John Templeton: 'Bull markets are born on pessimism, they grow on skepticism, they mature on optimism and they die on euphoria.'
— Liz Ann Sonders

Liz Ann Sonders once met Sir John Templeton and never forgot him. She returns often to his most enduring idea: that markets follow a psychological arc, from fear to greed, then back again.

As Managing Director and Chief Investment Strategist, Charles Schwab & Co., Sonders is one of the most powerful women on Wall Street. So she has plenty of opportunity to reflect on Templeton's message.

She believes that Templeton's quote is even more important today, given the lofty valuations that stocks have achieved. It's fine to rejoice in bull markets, but remember that markets don't rise in a straight line.

Sonders doesn't tell us to sell or to buy. She asks us to observe. What’s the sentiment right now? What stage could we be in? And if we’re honest with ourselves, are we acting in response to data or just emotion?

Sonders hasn't published a book, but she shares that her favorite is one that My Daily Oracle covered in an earlier post: Edwin Lefevre's funny and insightful Reminiscences of a Stock Operator.

It has been called the most entertaining book ever written on investing, and the ebook costs less than a dollar.

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