I-Ching

(6-96) There may not be too many Chinese who truly understand I-Ching, the Book of Change. However, the simple idea about the relationship between change and permanency, between yin and yang, has permeated the daily lives of many Chinese without them knowing it.

The common phrase "wu-ji-bi-fan" (meaning when something goes to the extreme, it must bounce back) can be traced back to the Book of Change. And there is no place better to illustrate such a principle than the stock market in our modern day life. Actually there is an American idiom with a similar meaning, namely "what goes up must come down." However, few of us follow it religiously as a way of life.

But for those of us who follow the stock market, it is the single most important rule to remember. Correction always follows after a rise in price. Often, the sharper the rise, the deeper the correction. No stock expert will dispute the validity of this simple truth. Why then are so many people are losers in the market? The answer is people are too entangled in their emotional attachments. Try to practice the detachment of a fortune teller, and the spirit of Zen. You will be armed with such powerful tools that I bet you will perform better than most of the mutual fund money managers. You can be loaded with tons of information, without the detachment of a fortune teller, you will still be a mediocre market player. 1