Thread by @DavidTaggart

1/one thing the fundamental people can learn from the technical people is the art of trend following and mean reversion as it pertains to having a rules based way to try and get better entries and stick with the position as long as you can.

2/if you want to be WarrenB 2.0 with lower drawdowns then you might want to read a bunch about the CTA/managed futures/LTTF crowd and how they run their systems. A LOT of value there imo. If you have the tendency to want to close out profits this can help you ride that trend

3/st mean reversion is not a bad way to get better entries or even better add on buys/shorts. You know the momentum lit that looks at 12m momo and then buys a month later? That is because there is a reversion factor in there.

4/for add on buys it could be something as simple as buying more of XYZ when it hits the bottom Bollinger Band. Not saying that is perfect but it is a way to systematically add to your position at a lower average cost then you probably get by just saying "buy more once a month"

5/but to think that technical factors cant help you is ludicrous. You dont have to use it to "forecast" but you can use it to tighten up your portfolio management a LOT.

6/For those who say "price is just the past," well that is laughable at best.

Earnings=the past
Revenues=the past
10k=the past
everything we know for sure=the past

So we are always extrapolating a bit regardless of our strategy or tool. Price is no different.

7/but price has one thing that is really nice...it does not get revised. So at least it is firm.

primarily fundamental investors dont have to get their CMT (but its not a bad idea) and primarily technical investors dont have to get their CFA (but its not a bad idea)

8/But there is a lot of value in both and even an intermediate understanding of either can help you make better decisions.

The great JAB-John A. Bollinger @bbands calls it "rational analysis" And I think he is 100% correct.

@bbands 9/

Go make a bunch of money

xoxo