Our Rodge has this week posted a spray at technical analysis, describing it as ‘rubbish”. I wish he hadn’t.
In my experience technical analysis works extraordinarily well. I know chaps who make a very hansom living using nothing else.
The secret is that these same fellows never tell anyone that they do it. On the contrary, they weave elaborate tales of macro insights and value formulae to disguise the fact that they using technicals.
They are forced to behave in this way because fundamental analysts like Roger Montgomery have been so successful in spinning their own myths about value investing. Despite there’s being little evidence that active value investing does any better than indexing, and plenty of evidence that shares just take a random walk, chaps like our Rodge trade on their expertise.
I’m no technician myself but I know empirically that technicals are a very valuable tool for investors who understand it. Finding yourself a quant savant to wield this tool will do you know harm at all.
Conversely, listening to Roger on this occasion quite possibly will.
