NEW YORK (MarketWatch) — A top letter says go with the flow — but wait for the sell signal.

James Dines’ The Dines Letter (TDL) has a multi-decade record of rallies, routs and triumphant reinvention. Dines is also perhaps the most arrogant, egotistical, aggressive and abrasive of all the investment letter editors monitored by the Hulbert Financial Digest, which is saying a mouthful. ( See Jan. 1, 2010 column.)

But, hey, you don’t pay investment letters to be nice. Over the past 12 months through January 31, TDL is up 81.5% by Hulbert Financial Digest count versus 23.93% for the dividend-reinvested Wilshire 5000 Total Stock Market Index.

Over the past three years, TDL is up 12.64% annualized vs. 0.86% annualized for the total return Wilshire 5000. This is particularly remarkable because Dines was very hard hit by the Crash of 2008.  ( See Dec. 23, 2008 column. )

“In conclusion, our bullishness of the last two years remains intact as of today. For TDLrs who had been willing to keep an iron hand on the tiller, satisfying profits continue to grow, and our focus must be on doing our best to determine when to flash our ‘Sell’ signal, hopefully anywhere near a Top.” But Dines is obviously concerned that the “Top” might be imminent. His equity section is headed: “DESULTORY MARKETS AHEAD.”

Dines is very far from being a simple sky-is-falling, inflation-is-coming gold bug. His most recent coup has been to anticipate the rare earth trace-element frenzy. ( See Sept. 23, 2010 column.) About rare earths, he now writes:

“We do not detect the gambling element in Rare Earths as of today. Indeed, the opposite appears to be true, exemplified by the intense short selling of Rare Earth stocks that should lead to the most profitable phase of the Supercycle due to short covering by the final holdout buyers near the Top.”