DaveJB said:
Yes,
it does rather suggest that 'professionals' need to employ TA analysts, as 'professional investors' and 'Technical Analysts' are distinctly seperate groups, doesn't it?
Hello Dave,
Yes that is absolutely on the button.
Now here is a riddle you can crack immediately but not if you are on the wrong side.
Many years ago when I was working in broking in the city, the firm had a research department that was rated top of the bunch month in and month out. It produced reams and reams and reams of bumff extolling the merits and demerits of a whole range of Industrials, mines & oil companies.
These were churned out weekly, in vast quantiities.
I was not on the dealing side at the time, I was busy in the office upstairs, waiting and hoping for a slot to go on the floor.
But as these were my green as a salad days, I was very keen to investigate everything.
I set about doing a little research of my own, in my spare time. I very soon discovered a very curious anomaly, not withstanding the fact that the "Analists" who produced the bumff were revered and cherished.
I discovered by statistically examining market prices, that there was an INVERSE relationship between the shares tipped in the bumff and consequentl lack of results and the shares not tipped in the bumff and favourable results, sparkling.
I also deduced that the major activity was in the shares not tipped whereas the tipped were ignored by the dealers, who were supposed to be supported by the reseach department analists (the spelling is deliberate, Bramble, by the way) This I found cynical and curious.
This to me was an early clue that all is not as it seems, hence my fondness for Alice, In Wonderland. But I digress. I then proceeded to develop a smallish portfolio with the consent and permission of my employers who thought my antics arcane, in which I only bought shares not tipped, and they all went up ! This by the way, was not insider trading.
Insider trading constitutes taking advantage of inside information relating to sensitve matters with regard to a company's affairs or inside information in advance of a release of news or statisical information or results in advance of them being made available to the public. This was just contrarianism for the sake of it.(TIC) I say this because the Broker's role is to render a service to his clients and not to get involved with sensitive company matters.
I found the cynical game quite fascinating, because the bumff was hyped more and more by the very clients who were participating profitably by doing the opposite. Now isn't that interesting ?
And so, this was 1972 here is where the first dawning of a faint realisation that markets are not driven by news, brokers' opinions, statistics, results, but by other forces, rather like hidden magnets playing tricks (bit of physics there) baffling the uninformed and unaware.
Hence my fondness for allegories and their use in illuminating and inspiring members.
Kind Regards As Usual.
