“I’ve spent two-thirds of my life studying and writing about the markets,” Russell wrote on his website. “And I’d say that without a shadow of a doubt the material which has served me best are the books and papers written by the great Dow Theorists -- Charles H. Dow, William P. Hamilton, Robert Rhea and E. George Schaefer.”
Watching Yields
Russell said the Dow Theory was really a set of observations that boiled down to “buying great values and selling those values when they become overpriced.” Dividend yields are the “classic test” of market valuation, he said in a 2002 newsletter.
Richard Lion Russell was born on July 22, 1924, in New York City. His father was a civil engineer, his mother a novelist, according to Prechter.
After graduating from Horace Mann School in New York, he studied for one year at Rutgers University, then enlisted in the U.S. Army. During World War II he was a bombardier on B-25 bombers in Italy. After the war, he earned a degree in English from New York University.
He was working as a textile designer when he inherited money from an uncle who had committed suicide not long after the 1929 market crash, Prechter wrote. Reading up on the markets at the New York Public Library, Russell came across the writings of Rhea, who had refined Dow’s market principles. Russell was sold on using Dow Theory to read stock patterns.
Exhuberant Praise
“I’ve studied every work and sentence that Rhea ever wrote, and in my opinion, Rhea was the greatest market trader of his time,” Russell wrote.
As a result of his studies, Russell became so bullish in late 1957 that he invested all his money in the market.
In 1958, Russell began writing down his market observations as the Dow Theory Letters and sending mimeographed copies to friends. A bullish article published by Barron’s brought hundreds of new subscribers, who paid $30 a year for Russell’s biweekly commentary. The number of subscribers was estimated at 7,500 in 2002.