Soon after Jeffrey Hirsch joined his father's firm in 1990, he peppered him with ideas to improve the business. It drove his dad — "Stock Trader's Almanac" creator Yale Hirsch — crazy.
"I was interrupting him constantly," the younger Hirsch recalled. "Son, why don't you write a few things down," his father, Yale, kindly suggested. "Then we can go over them every so often."
The story shows Yale's high regard for the written word. Expressing ideas, opinions and insights in print helped him analyze the facts, organize his thoughts and clarify his message.
Yale (1923-2021) launched the Hirsch Organization, an investment research firm, in 1966. Through his groundbreaking research, he founded a publication that he called "Stock Trader's Almanac."
"Stock Trader's Almanac" examined the effect of election cycles and other seasonal behaviors on the financial markets. Harnessing his keen intellect and curiosity, Yale spotted patterns that gave investors and traders an edge in making investment decisions.
Draw On Disparate Interests Like Yale Hirsch
Hirsch's love of music enhanced his ability to identify patterns in the stock market, says his son, Jeffrey, 57. He's chief executive of Hirsch Holdings and editor-in-chief of "Stock Trader's Almanac."
Serving in the U.S. Army Air Corps during World War II, Yale noticed a piano in the officer's mess — where they ate and relaxed — and started to play.
"He had a passion for music," Jeffrey said. After his Army service, he graduated from Brooklyn College with a bachelor's degree in music.
Use Detours To Find Your Focus, Like Hirsch
Yale decided to join his cousin, Sam Coslow, in Hollywood. Coslow was a successful composer and songwriter who won an Academy Award in 1944 as a producer of a short musical film, "Heavenly Music."
But Coslow grew fascinated with the stock market. He launched a stock market technical analysis firm, Indicator Digest, in 1961. And he asked Yale Hirsch to join him as vice president. Five years later, Hirsch came up with the idea to launch "Stock Trader's Almanac."
"It all started when Yale had an epiphany in the early 1960s while he was at Indicator Digest," Jeffrey said. "He said, 'I'll take all the market indicators, cycles and patterns and put them in a calendar format so that I can follow the market's schedule along with my own.' "
Build Onto Others' Knowledge
Some of those market indicators existed at the time. Hirsch discovered many others and integrated them into his calendar.
Today, his discoveries are well known. Examples include market phenomena such as the so-called January Barometer (a now widely followed market theory that stock performance in January predicts the rest of the year) and the Santa Claus Rally (the tendency of the market to rally in the last five trading days of the year and the first two trading days of January).
The first edition of "Stock Trader's Almanac" debuted in 1968. Updated annually since then, it has grown into an influential resource for investors. The firm now offers books, newsletters and other informational tools to help its readers make more profitable trades and investments.
Find Musical Rhythms In Your Words
Hirsch's flair for writing flowed from his love of music. Both involve acuity for composition and rhythm.
"He was a perfectionist in getting things to look and sound right," Jeffrey said. "A lot of it stems from musical theory, the organizational structure of writing songs."
His interdisciplinary approach gave him an edge in formulating his patterns and rules about the stock market. Often called a Renaissance man by friends, Hirsch sought to extract lessons from economics, finance, science and other fields.
But the key to his success was his distinctive writing style.
"He had a way with words," Jeffrey said. "The man could coin a phrase. It helped that he was a songwriter and he wrote ad copy," which honed his skill in crafting catchy messages.
To describe what happens in the absence of a Santa Claus Rally, for example, he famously wrote, "If Santa Claus should fail to call, bears may come to Broad and Wall."
Historical data support his maxim, according to LPL Financial. The S&P 500 tends to underperform in January and over the following year when the Santa Claus Rally does not occur.
Enjoy Brainstorming About Your Field
Hirsch cut an imposing figure. He was nearly 6'2" with "huge hands and size 13 shoes," Jeffrey says. When he walked into a room, people took notice.
Sam Stovall, a longtime friend, once told Yale, "You remind me of (actor) Jack Palance." "He loved that," said Stovall, chief investment strategist at CFRA Research.
Author of "The Seven Rules of Wall Street" and other books, Stovall often brainstormed with Hirsch about investment strategies, patterns and rules. They batted around ideas and market theories.
"Yale would call me and say, 'I wonder if this holds true' and we'd talk about it," Stovall recalled. "He knew I had sector-level data" that would help him test his hypothesis.
Stovall credits two people — Yale Hirsch and Robert Stovall, his father — with shaping his career and influencing his work. Robert Stovall, a Wall Street legend, was a longtime panelist on the popular PBS television show, "Wall Street Week With Louis Rukeyser."
"With Yale, the gears were always moving," Stovall said. "He was always thinking."
Collaborate Generously Like Hirsch
Thanks to Yale's inquisitiveness, Stovall would dig deeper to formulate and refine his rules.
"Because his mind was always working, Yale taught me, 'Could you take this one or two steps further?' " and build a new rule, Stovall said. "And he knew how to inject humor into his writing. He understood that people are more likely to remember something if they get a chuckle out of it."
Stovall also admired how Hirsch liked to spread the credit around. In "Stock Trader's Almanac," Hirsch often cited colleagues who shared their insights.
"That's how you gain trust," Stovall said. "He'd give me credit and write, 'Our friend, Sam Stovall, says …' You want to share ideas when you know you'll get credit for them."
Reflecting on five decades of success for "Stock Trader's Almanac," Stovall marvels at how Yale and Jeffrey Hirsch conveyed complex ideas in plain English.
"They're both quants but they're also students of the audience," Stovall said. "They don't overwhelm people ... they do a very good job of keeping it simple and keeping an audience's attention."
He also highlights their humility as an asset. They presented concepts such as their "tactical seasonal switching strategy" as alluring and worthy of consideration in making investment and trading decisions.
"But they also admit that no strategy works 100% of the time," in their writings, Stovall said.
Yale Hirsch's Keys:
- Creator of "Stock Trader's Almanac" along with newsletters and books on investment cycles and patterns.
- Overcame: Challenge of finding hard-to-detect investment rules that required intellectual curiosity and an interdisciplinary approach.
- Lesson: "Six words that spell business success: create concept, communicate concept, sustain momentum."
