There is a current movie entitled Eternal Sunshine of the Spotless Mind. It is about a man who has had a painful love affair and will do anything to rid his mind of those pain thoughts of a former love. He sees an advertisement that offers just such a service. It seems his former lover has the exact thoughts and she goes through the same treatment. Guess what? They meet again, do not recognize each other, and fall in love again.

Does any of this sound familiar?

May I gently remind you of what happened to your stock portfolio in 2000 to 2003? Please. Dont shoot the messenger. You fell in love with the stocks or mutual funds in your 401K and became wildly emotional about all the money your were making and how you thought about buying one of those islands in the Bahamas for early retirement. Then came the road crunching detour and you are left with a broken down portfolio by the side of the road.

Along came a shiny red tow truck and a mechanic who said he could fix everything. Slowly you began to forget the previous gut-wrenching journey and your car is now running (not as well as it used to) and seems to be getting better as this mechanic from Maul Street is working on it. Hey, I think Im in love again.

If you cannot remember what happened in the past you will repeat those same errors in the future. Every great statesman has been a student of history. Every great investor has studied the history of the stock market to try to determine what the future will bring. Cycles continue to repeat and repeat because people forget the past. Those who are smart enough do not fall into the repetitive trap and instead take advantage of it.

One of the most predictable is the long cycle of the stock market. It usually runs about 16 to 18 years. There is the up cycle which is invariably followed by a down cycle of equal length. Within each long cycle are several short cycles of 6 month to 2 years with a resumption of the downward move until the cycle is completed.

Do you realize we just completed an 18 year up cycle in 2000? Now the market is completing a one year advance within that cycle and may be getting ready to head down again. How is your spotless mind doing? Have you forgotten your lesson from 2000? Are you willing to make that same mistake again?

If you choose to forget you are doomed to repeat your losses. This time use your whole mind to learn from a past mistake so you will not see your money disappear again.

Al Thomas

Albert W. Thomas has spent most of his life in the field of finance. In 1965 he founded an insurance holding company, Security Dynamics Investment Corporation, after having been an agent and General Agent for several life insurance companies. In 1970 he became cofounder and president of Real Life Estate, Inc., that marketed a unique real estate and life insurance package.

After he became interested in commodities he bought a seat for his personal trading on the Chicago Open Board of Trade, which is now known as the MidAmerica Commodity Exchange. Later he became a full time trader and also acted as a commodity broker for a few select clients. By fellow floor traders Al is considered to be an excellent technical analyst much of which is outlined in his book IF IT DOESN'T GO UP, DON'T BUY IT! It became a best seller on Amazon.

In 1981 he sold his membership on the Exchange and with his wife, Carolyn, lived full time aboard their 41' ketch, the Aumakua (which means guardian angel in Hawaiian). They sailed in Florida and the Bahamas for two years.

He founded World Trading Group in 1984 that grew to the seventh largest introducing commodity brokerage firm in the U.S. with 35 offices from coast to coast, Alaska and Canada. It was sold in 1992.

Al is a graduate of Northwestern University with a B.S. degree in Commerce and is a member of MENSA. He is now president of Williamsburg Investment Company that syndicates his weekly financial column since 1999 to more than 300 newspapers and writes a financial market letter called Over My Shoulder that is quoted in Barron?s and many other publications. A 3-month trial subscription is available on his web site. He is a regular guest on several financial radio talk shows.

His favorite pastime is fishing.

Mr. Thomas is available for speaking engagements. Please call 321-453-5300 for more information.