I’ve been reading the realmoney.com fundamental vs. technical analysis discussion, including your latest, note with interest. I find myself in some agreement and some disagreement with all parties there. I’ll throw in a few miscellaneous comments on those exchanges follow below.

1) I agree qualitatively with Rev Shark’s views that individuals have an advantage in the ability of smaller portfolios to quickly enter and exit positions, and they have a disadvantage of less access to proprietary research. In practice, the former advantage is probably greater than the latter disadvantage.

2) Your points about implicit restrictions on many professional investors fit with my observations. Another point in that same direction is that most professional investors are not able to zero out their quarterly/yearly profit/loss and start each day with a fresh take. I believe the answers to your two questions about TA are “no” and “no”.

3) I’m planning to check out Hewitt Heiserman’s book.

3) My impression, based on reading Rev Shark’s columns, is that he is not an example of a pure TA-based trader. His discussions must mix in close to 50% of content based on his informal fundamental analysis of the market and particular industries/sectors. He’s a lot different than someone like Gary B. Smith.

4) I’m an individual who picks stocks and trades them somewhat like Bob Marcin (i.e. value based bottom fishing, informed by macro views) rather than Rev Shark or Joshua Hayes (i.e. based on price momentum and trends). I don’t agree with Shark and Hayes that this type of trading is inherently harder (or easier) for an individual. I’m about 30% ahead of the S&P 500 over the past 12 months and my stock picking per se has been quite mediocre. Some authors advise that people should find a trading style that fits their personality. But I believe the more important issue is to only trade based on methods that one understands and has sufficient conviction in. One way to gain conviction is by test. But paper trading is a notoriously poor simulation and trading experimentally with real money could be very expensive. So perhaps the main role of personality relates to what people first try while they are learning? A good followup question about a recommended approach to TA would be “Can one realistically make good use of this approach prior to a lot of real world practice or apprenticeship?”

As Galbraith said once: we have far more people selling derivatives, mutual funds and financial innovations than there is intelligence for the task.

Thanks for filling the gap.

Looking forward to another year.

(and as a former Alsin turnaround/value subscriber I echo what Rich said, but would include Howard Simon, too)