Why are value investor types so rigidly opposed to TA?
 

I mean, I get that they are philosophically very different (if not opposed), but I really do not understand the immediate dismissal of all things TA by a lot of value investors I have come into contact with recently.

Friday I met with a group of analysts at a value investing firm, and when I told one of them about my interest in TA, he chuckled and said to not even mention it to the other analysts.

That is just one anecdote, but it seems like I have been getting this a lot lately - and I am hardly an opponent of value investing.

Why are those types so ready to dismiss TA as worthless? How could so many people use it so successfully if it is really all smoke and mirrors? And why do valuation and TA have to be mutually exclusive when it comes to making buy/sell decisions? What's wrong with using a combination of the two?

Any insight would be appreciated.

Re: Why are value investor types so rigidly opposed to TA?
 

[ QUOTE ]
Why are those types so ready to dismiss TA as worthless?

[/ QUOTE ]

because they are poor value investors and have a strong need to validate themselves.

Re: Why are value investor types so rigidly opposed to TA?
 

I'm going to assume that "TA" means technical analysis.

The first problem is that while there are many value investors with documented good track records, there are hardly any technical (not quantitative, but technical) investors with documented good track records. Most of the stuff you see on bookshelves is written by people who claim to have good track records, but usually have a conspicuous lack of documentation. The field is nonintuitive and arcane and there are few people who everyone can agree have been successful.

Another reason is that many people who practice this "art" are certifiably unsophisticated. That makes it easy for most professionals to look down on TA practitioners.

At best, I'm agnostic about the subject.

Re: Why are value investor types so rigidly opposed to TA?
 

Also, I think many fundy types assume TA exclusively involves involves looking at charts and deciphering the patterns and predicting where prices are going to next. I buy and sell based on pretty basic TA but very little of my time is spent staring at the chart. It works and has worked satisfactorily for me so far and has been proven to be robust during testing.

I think much of the value investor's resistance to TA is often ignorance on TA methodology and people like to shun things they don't fully understand or have an interest in. I'm sure most/all TAs accept that FA works well in the right hands, but perhaps many FAs think that a successful TA is just running hot.

I think being a stubborn value investor and ignoring price and volume can really sting. There is a lot to be said in combining the two disciplines. A value investor can find companies whose valuations provide a set-up (can be short, too) and a TA can find an entry point whereby they can avoid buying over-sold companies still in the grip of a long-term bear move, or avoid shorting overbought companies still in a bull market frenzy. - shorting "overvalued" tech stocks during thelate 90s would have left a nasty scar, just as not buying the same overvalued companies could have resulted in a missed opportunity.

There have obviously been famous value investors (and I'm sure Desert Cat will chime in soon) and some perhaps less famous TA traders. I prefer what interests me. I find TA fascinating, but FA to be a frustrating trip into tedium.

There are a million and one ways to extract money from the market, but the trader's or investor's psychological methodology is more more important than their trading/investing methodology (IMO). Besides, I think FA is more suitable for investing whereas TA is more of a trader's tool. Apples and oranges.

Re: Why are value investor types so rigidly opposed to TA?
 

[ QUOTE ]
I find TA fascinating, but FA to be a frustrating trip into tedium.

[/ QUOTE ]

dingdingding!

Re: Why are value investor types so rigidly opposed to TA?
 

[ QUOTE ]
I mean, I get that they are philosophically very different (if not opposed), but I really do not understand the immediate dismissal of all things TA by a lot of value investors I have come into contact with recently.

Friday I met with a group of analysts at a value investing firm, and when I told one of them about my interest in TA, he chuckled and said to not even mention it to the other analysts.

That is just one anecdote, but it seems like I have been getting this a lot lately - and I am hardly an opponent of value investing.

Why are those types so ready to dismiss TA as worthless? How could so many people use it so successfully if it is really all smoke and mirrors? And why do valuation and TA have to be mutually exclusive when it comes to making buy/sell decisions? What's wrong with using a combination of the two?

Any insight would be appreciated.

[/ QUOTE ]

Most people I encounter actually use both, they try to figure out good entry and sell points from "technical" indicators while selecting investment vehicles using FA.

Valuing equity using FA is a mathematically sound endeavor, just have to be accurate about the parameters that are used (not necessarily easy). Not so sure about TA though but TA covers such a wide range of things I suppose it would be good to talk about what people do in using TA.

Re: Why are value investor types so rigidly opposed to TA?
 

I buy and sell based on pretty basic TA but very little of my time is spent staring at the chart. It works and has worked satisfactorily for me so far and has been proven to be robust during testing.


So what is your definition of TA?

Re: Why are value investor types so rigidly opposed to TA?
 

lol TA

Re: Why are value investor types so rigidly opposed to TA?
 

I always favored T/A as trader,but def. used fundamentals alongside as well.
Esp. on news info like EPS release,management changes,takeover speculation/arbitrage opps,an FDA drug being approved or rejected,...or even SEC related issues.

I always felt using both was a positive

SF [img]/images/graemlins/cool.gif[/img]

Re: Why are value investor types so rigidly opposed to TA?
 

[ QUOTE ]
I mean, I get that they are philosophically very different (if not opposed), but I really do not understand the immediate dismissal of all things TA by a lot of value investors I have come into contact with recently.

Friday I met with a group of analysts at a value investing firm, and when I told one of them about my interest in TA, he chuckled and said to not even mention it to the other analysts.

That is just one anecdote, but it seems like I have been getting this a lot lately - and I am hardly an opponent of value investing.

Why are those types so ready to dismiss TA as worthless? How could so many people use it so successfully if it is really all smoke and mirrors? And why do valuation and TA have to be mutually exclusive when it comes to making buy/sell decisions? What's wrong with using a combination of the two?

Any insight would be appreciated.

[/ QUOTE ]

There is no imperical eveidence to show that TA can give an investor an edge in the market. With computers it would be very easy to back test any theory you want, why is there no proof that TA works?

Value investing meanwhile has a strong argument for its success:

http://www1.gsb.columbia.edu/valuein...ves/DOC032.PDF

Re: Why are value investor types so rigidly opposed to TA?
 

Hard core value investors view the markets short term movements as mysteries and don't feel they, or anyone else has special insight into them. If you want to work for one bear that in mind. Review Buffetts comments for detail, his quote about he stopped using TA when he got the same predictions when he turned the chart upside down, but most importantly the Mr. Market parable that is the basis of value investing.

And no one mentioned one reason TA is so popular. Value investors are lousy clients for brokerages, TA driven traders are great clients, so brokerages hire TA types to provide free research to clients because it promotes trading, same as they hire Abby Cohen macro predictors to get you to rebalance your portfolio.

I have had a few times where I felt I had special insight into price movements, basicly when I knew a large shareholder would be forced to sell lots of shares. Beyond that I don't have a clue and its led me to scoff at TA in the past. But as I get older I realize that some large quant operations have so much data and smarts they might have an edge over many securities, and a smart two plus twoer might be able to find a single stock where they can focus on they can develop an edge. But lots of what I hear from TA types seems too simple to be useful. I buy or sell illiquid microcaps ever day, and I create discernable patterns in their price movements because I typically push to close orders at days end. But if you try to use this predictively you will fail because you won't know when I start, when I am done, and when I was too hung over to open my laptop or when I had to take my daughter to her gym class. Multiply that by hundreds of participants and it seems almost impossible.

Re: Why are value investor types so rigidly opposed to TA?
 

[ QUOTE ]
[ QUOTE ]
Why are those types so ready to dismiss TA as worthless?

[/ QUOTE ]

because they are poor value investors and have a strong need to validate themselves.

[/ QUOTE ]

Neither of this applies to Buffett or dozens of value managers with multi-decade records of beating the market. These guys don't use TA, and don't need any more validation. Whether TA works or not, they'll tell you they never needed it.

Re: Why are value investor types so rigidly opposed to TA?
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Why are those types so ready to dismiss TA as worthless?

[/ QUOTE ]

because they are poor value investors and have a strong need to validate themselves.

[/ QUOTE ]

Neither of this applies to Buffett or dozens of value managers with multi-decade records of beating the market. These guys don't use TA, and don't need any more validation. Whether TA works or not, they'll tell you they never needed it.

[/ QUOTE ]

i don't consider buffett et al "those types" - and (correct me if i'm wrong) i don't think buffett would claim that TA is worthless to everyone.

Re: Why are value investor types so rigidly opposed to TA?
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Why are those types so ready to dismiss TA as worthless?

[/ QUOTE ]

because they are poor value investors and have a strong need to validate themselves.

[/ QUOTE ]

Neither of this applies to Buffett or dozens of value managers with multi-decade records of beating the market. These guys don't use TA, and don't need any more validation. Whether TA works or not, they'll tell you they never needed it.

[/ QUOTE ]

i don't consider buffett et al "those types" - and (correct me if i'm wrong) i don't think buffett would claim that TA is worthless to everyone.

[/ QUOTE ]

How come there are value investors in the Forbes 400 but no TA types?

Re: Why are value investor types so rigidly opposed to TA?
 

The are a few problems with TA (all of which are really the same thing):

1) There are a variety of definitions of TA, many of which contradict each other.

2) No one can ever explain why TA (regardless of definition) should work, only that "it just works". Which by the way, is a viewpoint sorely lacking in evidence.

3) As mentioned, it is kind of curious that all of the long term great investors practiced some variation of FA.

Re: Why are value investor types so rigidly opposed to TA?
 

[ QUOTE ]
The are a few problems with TA (all of which are really the same thing):

1) There are a variety of definitions of TA, many of which contradict each other.

[/ QUOTE ]

this is the one i have the most trouble with. wtf is TA? lol.

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2) No one can ever explain why TA (regardless of definition) should work, only that "it just works". Which by the way, is a viewpoint sorely lacking in evidence.

[/ QUOTE ]

well on some definitions of TA there is definitely documentation and studies that prove it works over time but can't be expected to in the future. the reason is because it has been documented to have worked over time LDO.

my favorite viewpoint on the subject is from Benoit Mandelbrot. he is arguably one of the smartest people of the century (20th) and certainly contributed a ton to mathematical and statistical undertakings.

he wrote that with is methodology of replicating price charts, he fooled many technical analysts who immediately showed him supports, reversals etc. etc. etc. thinking that the price charts were actual market data instead of a totally made up random simulation.

he refused to believe that TA is worth while simply because he could so easily fool its practitioners.

he did concede though, and i do as well, that TA seems to work in some instances and there is one logical reason i can think of: one unchanging factor of TA seems to be human reaction to price movements. there are psychological factors that imo cause humans to act a certain way and TA uses proxies (unknowingly possibly) of those traits in its practitioning.

[ QUOTE ]
3) As mentioned, it is kind of curious that all of the long term great investors practiced some variation of FA.

[/ QUOTE ]

yet some great hedge funds use TA and are killing it (here you have to include quantitative strategies as TA since they are based on arguably non- fundamentel factors) ... i.e. renaissance, shaw etc.

it doesn't take mathematicians to do fundamental analysis but simons only hires the absolute creme de la creme from the math/stat world (for the most part he doesn't even look at US PhDs...which says something about our education in that subject). so i think he's pretty much a TA type, but again, goes back to wtf is TA???

great post btw spider.

Barron

Re: Why are value investor types so rigidly opposed to TA?
 

There are people killing the lottery too.

Re: Why are value investor types so rigidly opposed to TA?
 

[ QUOTE ]
There are people killing the lottery too.

[/ QUOTE ]

horrible analogy for the guys killing the markets i mentioned. simons isn't some lottery winner. neither is shaw. there are TONS of TAs though that of course this analogy could very aptly apply to ... but simons and shaw aren't two of them.

Barron

Re: Why are value investor types so rigidly opposed to TA?
 

I use a lot of technical analysis. Not so much from an investing standpoint (although I do look for support and resistance levels for entries/exits) but more from a trading standpoint. Then again I am a trader. You can't really play the swings and use fundamental analysis for market making? Momentum, support, resistance, trendlines etc. are all technical and the weapons that market makers use. Crude oil for example is down more than 4 bucks right now. What fundamentally changed from yesterday? Who the hell knows! But technically you can see the weakness and get a hellova ride!

Re: Why are value investor types so rigidly opposed to TA?
 

[ QUOTE ]
I use a lot of technical analysis. Not so much from an investing standpoint (although I do look for support and resistance levels for entries/exits) but more from a trading standpoint. Then again I am a trader. You can't really play the swings and use fundamental analysis for market making? Momentum, support, resistance, trendlines etc. are all technical and the weapons that market makers use. Crude oil for example is down more than 4 bucks right now. What fundamentally changed from yesterday? Who the hell knows! But technically you can see the weakness and get a hellova ride!

[/ QUOTE ]

News, not noise

Re: Why are value investor types so rigidly opposed to TA?
 

News AND noise. It was down 3 bucks yesterday before this news. The momentum player has no interest in why. Where does the fundemental guy get in or out? Nobody knows except maybe Boone Pickens [img]/images/graemlins/smile.gif[/img] How does a fundamental guy make markets? He doesn't! Crude is ultra volatile right now with many huge dips and spikes intraday. Technicians can profit greatly from this kind of action. The fundamentalist sits on his hands and position and takes whatever the market does to him.

Re: Why are value investor types so rigidly opposed to TA?
 

[ QUOTE ]

yet some great hedge funds use TA and are killing it (here you have to include quantitative strategies as TA since they are based on arguably non- fundamentel factors) ... i.e. renaissance, shaw etc.

it doesn't take mathematicians to do fundamental analysis but simons only hires the absolute creme de la creme from the math/stat world (for the most part he doesn't even look at US PhDs...which says something about our education in that subject). so i think he's pretty much a TA type, but again, goes back to wtf is TA???



[/ QUOTE ]

While in some places there is a tenuous relationship between quant and TA, it is in their practice that they tend to be quite different and partially explains why TA is an easy target. How much TA have you seen that is tested with any scientific rigor? To compare the overwhelming majority of TA participants to RenTech is to compare top modern physicians to ancient blood letters.

Re: Why are value investor types so rigidly opposed to TA?
 

The value investor believes he represents the respectable (lol) side of the market, and that the TA types are the schemers.

IMO, TA is of value because it allows a trader to see what the specialists and MMs are up to.

Re: Why are value investor types so rigidly opposed to TA?
 

Apparently using quantitative statistics is TA now days.

Re: Why are value investor types so rigidly opposed to TA?
 

[ QUOTE ]
there is one logical reason i can think of: one unchanging factor of TA seems to be human reaction to price movements. there are psychological factors that imo cause humans to act a certain way and TA uses proxies (unknowingly possibly) of those traits in its practitioning.

[/ QUOTE ]

Yeah, I'll admit I could see TA working for psychological reasons, which I think is roughly like saying some people can make money with momentum investing or short term timing the market. However, I suspect this is probably specific to individuals (i.e. can't be taught).

Good Mandelbrot story.

Re: Why are value investor types so rigidly opposed to TA?
 

TA only care about when they are buying.
Value investors care about what they are buying and when they are buying.

Both think they have an edge over the other.

Re: Why are value investor types so rigidly opposed to TA?
 

[ QUOTE ]
I use a lot of technical analysis. Not so much from an investing standpoint (although I do look for support and resistance levels for entries/exits) but more from a trading standpoint. Then again I am a trader. You can't really play the swings and use fundamental analysis for market making? Momentum, support, resistance, trendlines etc. are all technical and the weapons that market makers use. Crude oil for example is down more than 4 bucks right now. What fundamentally changed from yesterday? Who the hell knows! But technically you can see the weakness and get a hellova ride!

[/ QUOTE ]

Good points. An investor should know the fundamentals in order to take a position. A trader should know all the TA in order to best day trade. It wouldn't hurt to be knowledgable in both areas and in fact I try to be as a trader.

Re: Why are value investor types so rigidly opposed to TA?
 

[ QUOTE ]
[ QUOTE ]
there is one logical reason i can think of: one unchanging factor of TA seems to be human reaction to price movements. there are psychological factors that imo cause humans to act a certain way and TA uses proxies (unknowingly possibly) of those traits in its practitioning.

[/ QUOTE ]

Yeah, I'll admit I could see TA working for psychological reasons, which I think is roughly like saying some people can make money with momentum investing or short term timing the market. However, I suspect this is probably specific to individuals (i.e. can't be taught).

Good Mandelbrot story.

[/ QUOTE ]

momentum investing is definitely important though and the psychological factors are part of the fundamental drivers of it.

my old employer constructs a buy/sell signal totally on fundamental relationships (doesn't day trade...takes long view positions etc.) and 1/3 of that signal is basically momentum indicators.

Barron

Re: Why are value investor types so rigidly opposed to TA?
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Why are those types so ready to dismiss TA as worthless?

[/ QUOTE ]

because they are poor value investors and have a strong need to validate themselves.

[/ QUOTE ]

Neither of this applies to Buffett or dozens of value managers with multi-decade records of beating the market. These guys don't use TA, and don't need any more validation. Whether TA works or not, they'll tell you they never needed it.

[/ QUOTE ]

i don't consider buffett et al "those types" - and (correct me if i'm wrong) i don't think buffett would claim that TA is worthless to everyone.

[/ QUOTE ]

I'm pretty sure Buffett would tell you its worthless to him, that he doesnt think it has predictive value. But I don't think he would be presumptuous as to say something can't work for everyone.

And the problem with big successful funds like Renaissance is that no one really knows what they do. There are many trading strategies such as statistical arbitrage, pairs trading, other arbitrages, etc that have little to do with TA as most people define it, but they are quick to include the successful practitioners as evidence of TA's success.

Re: Why are value investor types so rigidly opposed to TA?
 

[ QUOTE ]
News AND noise. It was down 3 bucks yesterday before this news. The momentum player has no interest in why. Where does the fundemental guy get in or out? Nobody knows except maybe Boone Pickens [img]/images/graemlins/smile.gif[/img] How does a fundamental guy make markets? He doesn't! Crude is ultra volatile right now with many huge dips and spikes intraday. Technicians can profit greatly from this kind of action. The fundamentalist sits on his hands and position and takes whatever the market does to him.

[/ QUOTE ]

I'd guess that oil has no easily determined fundamental value, it's value is totally dependent on some very complex supply demand curves of a variety of disparate producers and consumers as well as the value of the U.S. Dollar. This is pretty much true of any commodity, a decade or so ago Buffett tried to predict the bottom for silver based on replacement costs and industrial demand and just succeeded in showing how hard it was.

Re: Why are value investor types so rigidly opposed to TA?
 

[ QUOTE ]
I buy and sell based on pretty basic TA but very little of my time is spent staring at the chart. It works and has worked satisfactorily for me so far and has been proven to be robust during testing.


So what is your definition of TA?

[/ QUOTE ]

The classical definition would probably refer to drawing trend lines and looking for classic chart patterns representing the footprints of the bulls and bears.

I've tried this, but it's too subjective and you need some serious discipline and emotional control to be successful. If you think/want/hope the market will go up then the trendlines you draw will have an upward slant and you'll probably look for bullish patterns.

I am only concerned with price and not value. Put simply, I plug the EOD data into a spreadsheet and this filters out 1 of 3 positions (long/short/aside), creates trading channels, entry/exit points, sizes positions (and whether my account can afford the position's risk), and suggests stops. I don't need a chart to do this, but I use the chart for some creative input which on the whole is probably -EV. Without this creative input however, trading would be just too boring.

Re: Why are value investor types so rigidly opposed to TA?
 

[ QUOTE ]
EOD data

[/ QUOTE ]

By this you mean what exactly?

[ QUOTE ]
I don't need a chart to do this, but I use the chart for some creative input which on the whole is probably -EV. Without this creative input however, trading would be just too boring.

[/ QUOTE ]

Interesting. Didn't expect to hear you say that.

Re: Why are value investor types so rigidly opposed to TA?
 

eod= end of day.

Re: Why are value investor types so rigidly opposed to TA?
 

[ QUOTE ]
[ QUOTE ]
There are people killing the lottery too.

[/ QUOTE ]

horrible analogy for the guys killing the markets i mentioned. simons isn't some lottery winner. neither is shaw. there are TONS of TAs though that of course this analogy could very aptly apply to ... but simons and shaw aren't two of them.

Barron

[/ QUOTE ]

Do you have any links to verified track records and description of methods used?

Something like this one used in support of value investing:

http://www1.gsb.columbia.edu/valuein...ves/DOC032.PDF

Re: Why are value investor types so rigidly opposed to TA?
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
There are people killing the lottery too.

[/ QUOTE ]

horrible analogy for the guys killing the markets i mentioned. simons isn't some lottery winner. neither is shaw. there are TONS of TAs though that of course this analogy could very aptly apply to ... but simons and shaw aren't two of them.

Barron

[/ QUOTE ]

Do you have any links to verified track records and description of methods used?

Something like this one used in support of value investing:

http://www1.gsb.columbia.edu/valuein...ves/DOC032.PDF

[/ QUOTE ]

Look at footnote 17 in the wiki on technical analysis.

Cliff notes: 56 studies show economic profits from TA, 20 studies mixed, 19 studies show negative economic profits from TA. More recent studies are more favorable toward TA than older studies.

Re: Why are value investor types so rigidly opposed to TA?
 

Also, wasn't there a really long FA v. TA thread in here a while back? I searched for it but couldn't find it...anyone have a link?

Re: Why are value investor types so rigidly opposed to TA?
 

Another reason TA is popular, it provides action. There is no action in value investing. This morning I was telling my wife about this great stock I found that I'd trading at one third book an will likely take two years to reach book value. So I have to wait around for a couple years, checking and rechecking to make sure I didn't make a mistake.

Contrast that with analyzing minute to minute movements of a stock, trying to predict its next action. TA is exciting, FA is boring. If they produced equal results no one would ever do FA. But even though the great long term track records are FA based, smart people still get drawn to TA because of the greater challenges and thrills.

Me, I invest very boringly but try to play poker every afternoon to fill my action void.

Re: Why are value investor types so rigidly opposed to TA?
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
There are people killing the lottery too.

[/ QUOTE ]

horrible analogy for the guys killing the markets i mentioned. simons isn't some lottery winner. neither is shaw. there are TONS of TAs though that of course this analogy could very aptly apply to ... but simons and shaw aren't two of them.

Barron

[/ QUOTE ]

Do you have any links to verified track records and description of methods used?

Something like this one used in support of value investing:

http://www1.gsb.columbia.edu/valuein...ves/DOC032.PDF

[/ QUOTE ]

Look at footnote 17 in the wiki on technical analysis.

Cliff notes: 56 studies show economic profits from TA, 20 studies mixed, 19 studies show negative economic profits from TA. More recent studies are more favorable toward TA than older studies.

[/ QUOTE ]

I went to Wiki and found this:

[edit] Lack of evidence
Critics of technical analysis include well known fundamental analysts. For example, Peter Lynch once commented, "Charts are great for predicting the past." Warren Buffett has said, "I realized technical analysis didn't work when I turned the charts upside down and didn't get a different answer" and "If past history was all there was to the game, the richest people would be librarians."[1]

Some academic studies say technical analysis has little predictive power, but other studies say it may produce excess returns. For example, measurable forms of technical analysis, such as non-linear prediction using neural networks, have been shown to occasionally produce statistically significant prediction results.[18] A Federal Reserve working paper[7] regarding support and resistance levels in short-term foreign exchange rates "offers strong evidence that the levels help to predict intraday trend interruptions," although the "predictive power" of those levels was "found to vary across the exchange rates and firms examined."

Cheol-Ho Park and Scott H. Irwin reviewed 95 modern studies on the profitability of technical analysis and said 56 of them find positive results, 20 obtain negative results, and 19 indicate mixed results: "Despite the positive evidence...most empirical studies are subject to various problems in their testing procedures, e.g., data snooping, ex post selection of trading rules or search technologies, and difficulties in estimation of risk and transaction costs. Future research must address these deficiencies in testing in order to provide conclusive evidence on the profitability of technical trading strategies."[19]

However, a comprehensive study of the question by Amsterdam economist Gerwin Griffioen concludes that: "for the U.S., Japanese and most Western European stock market indices the recursive out-of-sample forecasting procedure does not show to be profitable, after implementing little transaction costs. Moreover, for sufficiently high transaction costs it is found, by estimating CAPMs, that technical trading shows no statistically significant risk-corrected out-of-sample forecasting power for almost all of the stock market indices."[5]

Re: Why are value investor types so rigidly opposed to TA?
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
There are people killing the lottery too.

[/ QUOTE ]

horrible analogy for the guys killing the markets i mentioned. simons isn't some lottery winner. neither is shaw. there are TONS of TAs though that of course this analogy could very aptly apply to ... but simons and shaw aren't two of them.

Barron

[/ QUOTE ]

Do you have any links to verified track records and description of methods used?

Something like this one used in support of value investing:

http://www1.gsb.columbia.edu/valuein...ves/DOC032.PDF

[/ QUOTE ]

i guess this really goes back to the #1 thing that spider said: wtf is TA??

define it for me in a way you'd like to discuss so i can better understand how you'd like to bucket some of hte strategies and i'll do my best to respond.

overall though i think "chartists" are the least likely to produce anything (i.e. mandelbrot's suckers) excess return wise. but i don't know whether you group in highly quantitative trading rules that seek out small differenciations in prices and how they react to things over time. is that TA?

Barron

Re: Why are value investor types so rigidly opposed to TA?
 

[ QUOTE ]
that technical trading shows no statistically significant risk-corrected out-of-sample forecasting power for almost all of the stock market indices."[5]

[/ QUOTE ]