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Chartered Market Technician

what do you think about this?

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this has been discussed before. use the search function.

I’ve never done the CMT but plan to do it at my leisure in a few years. It’s a good way to get proof of learning Technical analysis in-depth but not much else.

Gosh (!), this has already been discussed. I can’t believe this (uh, search function?). From now on, if what you are saying isn’t pushing human knowledge into new frontiers, please do not bother posting.

Give him a break! If he’s interested in technical analysis how can you expect him to use a search function or do any real research?

I am nearly certain that my firm would not consider hiring anybody at any level of seniority who had a CMT designation and advertised it on his resume.

Seriously, how can we expect him to have done the research that would have shown him that this has been discussed and our opinions on the matter have not changed, rendering it useless to even broach this topic. Jeez he might as well have claimed that technical analysts and quantitative analysts are two different manifestations of the same underlying assumptions.

newsmaker Wrote:
——————————————————-
> I am nearly certain that my firm would not
> consider hiring anybody at any level of seniority
> who had a CMT designation and advertised it on his
> resume.

Why is that? Is a “CFA, CMT”, bad?

I see the CMT as harmless “study-aid” for technical analysis, not a potential “maxim”.

I think what he means is that if one is like myself, constantly scratching and clawing to gain recognition and move to the top, said one’s given name does not carry enough weight just standing alone. Perhaps more senior individuals (and those born into the upper classes) do not need such torque to gain career traction.

Seriously, I think people at the top will laugh at you for studying what amounts to “monkey see, monkey do”

There’s a lot of really rich monkies out there, virginCFAhooker.

sternwolf Wrote:
——————————————————-
> newsmaker Wrote:
> ————————————————–
> —–
> > I am nearly certain that my firm would not
> > consider hiring anybody at any level of
> seniority
> > who had a CMT designation and advertised it on
> his
> > resume.
>
> Why is that? Is a “CFA, CMT”, bad?
>
> I see the CMT as harmless “study-aid” for
> technical analysis, not a potential “maxim”.

As you know, CFA and CMT are at odds in terms of philosophy. So having both kinda says you’re willing to swing both ways. Nothing wrong with it, you’re privileged to your own philosophy, but if they’re in contradiction you have to explain why.

CMT isn’t a hard exam to my knowledge so getting it won’t really prove anything. in the words of Prop Joe, “proof is hard to come by in the streets”.

Yeah, obviously. The CMT is just an education tool.

But Technical analysis is often used as a short-term reference for many analysts.

No one gets seriously rich doing technical analysis. You daytrade, you buy a porsche, you move on.

virginCFAhooker Wrote:
——————————————————-
> No one gets seriously rich doing technical
> analysis. You daytrade, you buy a porsche, you
> move on.

my fellow DBers would argue with that statement. some on here like JDV also believe TA will get your riches beyond your wildest dreams.

If wealth is all that matters then remember the wealthiest investors are value investors. End of discussion.

virginCFAhooker Wrote:
——————————————————-
> If wealth is all that matters then remember the
> wealthiest investors are value investors. End of
> discussion.

that was also my reply.

I know this post is probably dead, but I just stumbled on it, and thought I’d offer my humble opinion. I studied a variety of fundamental approaches to the market back in the day as part of my CFP preparation…certainly and admittedly not at the depth of a CFA preparatory program. What disturbed me over the past few years was how little trust one can put into a balance sheet, and how outliers can crush a financial model quickly. I began dabbling in TA, and obtained the CMT which was for me simply a way to educate myself on alternative approaches to trading securities. I joined the MTA, and was surprised to find many CFA charterholders who had embraced TA as a valid discipline of risk management. I remember a CFA charterholder telling me, “After I couldn’t figure out why the S&P moved the way it did in my financial model, I began doing trend and momentum analysis.” A simple fact is that some of the most mathmatically brilliant models (perhaps LTCM’s) can fall prey to hubris and the inability to compensate for swings in investor psychology. I am no expert, but TA has opened up a new world of investing to me. I can now look at a wide variety of investments without having to be intimately familiar with each balance sheet and each assumption made in the footnotes. I don’t call this laziness in anyway…it just allows me to sift through more alternative investments with more speed, and cut my losses quickly if I am wrong on an entry point. It also can be a lot of fun, especially when applying fibonacci sequences of time and retracement. I don’t need someone to take me too seriously, but I take my investing much more seriously now than I did before - I am not a day trader. Nothing personal against the fundamental approach. I’m taking an investment management course now which many of my classmates are using as CFA level 2 prep/review, and interestingly enough the professor is planning to spend an entire class on the TA approach. Hopefully he will do it more justice than Reilly and Brown’s Portfolio Management text does. Sorry for my verbocity, but I was a little surprised at the arrogance of some of the earlier posts.

firstly, don’t confuse a CFA charterholder with a value investor.

by and large, most people who pass the CFA just studied. they can end up being porno actors/actresses for all that matters. passing the CFA only says you know a bit about securities/investment analysis. i don’t think passing the CFA says anything more than you can study.

i find it troubling when people treat stocks as pieces of paper to be traded rather than as ownership in pieces of a business.

As to your assertion that you can’t trust the balance sheet, well, it is your job to determine the integrity of the management who produce this report. Also, it is crucial you understand the basics of the business and evaluate the validity of what is being reported.

TAs are to me people who look to get rich quick. As to its effectiveness, i have no comment.

haggis Wrote:
——————————————————-
> I know this post is probably dead, but I just
> stumbled on it, and thought I’d offer my humble
> opinion. I studied a variety of fundamental
> approaches to the market back in the day as part
> of my CFP preparation…certainly and admittedly
> not at the depth of a CFA preparatory program.
> What disturbed me over the past few years was how
> little trust one can put into a balance sheet, and
> how outliers can crush a financial model quickly.
> I began dabbling in TA, and obtained the CMT which
> was for me simply a way to educate myself on
> alternative approaches to trading securities. I
> joined the MTA, and was surprised to find many CFA
> charterholders who had embraced TA as a valid
> discipline of risk management. I remember a CFA
> charterholder telling me, “After I couldn’t figure
> out why the S&P moved the way it did in my
> financial model, I began doing trend and momentum
> analysis.” A simple fact is that some of the most
> mathmatically brilliant models (perhaps LTCM’s)
> can fall prey to hubris and the inability to
> compensate for swings in investor psychology. I
> am no expert, but TA has opened up a new world of
> investing to me. I can now look at a wide variety
> of investments without having to be intimately
> familiar with each balance sheet and each
> assumption made in the footnotes. I don’t call
> this laziness in anyway…it just allows me to
> sift through more alternative investments with
> more speed, and cut my losses quickly if I am
> wrong on an entry point. It also can be a lot of
> fun, especially when applying fibonacci sequences
> of time and retracement. I don’t need someone to
> take me too seriously, but I take my investing
> much more seriously now than I did before - I am
> not a day trader. Nothing personal against the
> fundamental approach. I’m taking an investment
> management course now which many of my classmates
> are using as CFA level 2 prep/review, and
> interestingly enough the professor is planning to
> spend an entire class on the TA approach.
> Hopefully he will do it more justice than Reilly
> and Brown’s Portfolio Management text does.
> Sorry for my verbocity, but I was a little
> surprised at the arrogance of some of the earlier
> posts.

you go to CBS?

note: just because it doesn't make sense doesn't mean that it's not merry.

Trading is a perfectly legitimate way to make money. It just requires a different skill set. I personally think it is harder to do right, but that’s probably because of my emotional makeup and educational background that prioritizes more fundamental (typically macro) types of thinking.

I’ve been thinking about doing the CMT, not for the letters, but just to have a better structured understanding of how technical analysis works. I think there are plenty of asset classes - currencies, commodities, and broad equity indices for which TA is a highly plausible system.

You want a quote?  Haven’t I written enough already???

How many of you have ever purchased a stock without looking at a chart first? Very few.

CFA and CMT charterholder here. I can’t believe there’s anyone that believes fully in rational markets after the real estate bubble and the dot com bubble. Unless, of course, you never actually watched the markets on a full-time basis.

At a minimum, TA gives fundamentally-biased investors some checkpoints on their analyses…if a stock is such a good investment, why is it going down, huh? hmm? well?

Cmt or MBA?

__________

"good personality ... or he was known as Lt. Mandingo during his army days."

#1 Gunner Wrote:
——————————————————-
> How many of you have ever purchased a stock
> without looking at a chart first? Very few.

You’re my #1 Gunner because I agree.

note: just because it doesn't make sense doesn't mean that it's not merry.

Both aren’t mutually exclusive. You should be able to do both. Right now I’d say the CMT requires half the study time of the CFA, but I expect in a couple of years that’s going to change dramatically. There is a trend towards statistical evaluation of trading systems and rules.

#1 Gunner Wrote:
——————————————————-
> How many of you have ever purchased a stock
> without looking at a chart first? Very few.

I’m guilty of looking at charts before I buy. But its always over a long period. how the stock trades within the year or 3 years i can ignore and I do.

However, i look at the chart to see guage the market value changes of the firm and how well the fundamentals have tracked the stock. i can basically do without this piece of information.

However, i do look at how how the P/E multiple has changed and guage sentiment over the years.

TA from my understanding, uses the chart as the main source of information in buying a stock. Their definition of “expensive’ or “cheap” is based purely on the trading pattern. I’m not guilty of this whatsoever.

just in the same way you can’t assume that a CFA charterholder is a value investor, you cannot assume a CFA charterholder believes in EMH, whether it be weak, semi or strong form. technical analysis is taught in the CFA cirriculum and my year’s books (2007-2009) included maybe 100 pgs of TA material. compared to my boss’s books (1991-1993), which had none allocated to TA, its a big step up. i agree with CFAI’s stance to keep TA as a small portion as in the greater scale of investing, it should be a minor part of the decision making process.

sure, momentum might tell you to sell a stock, but if its trading at 20% of fair value, it’d be stupid to sell if there is a good probability of it returning to fair value within a reasonable time frame. the bottom line is that the big money needs to focus on the fundamentals b/c they’re moving millions and billions, not thousands like us normal folks in our trading accounts, or for us more talented traders, a few million in our prop trading accounts, and their market impact can often change momentum.

fundamentals will almost always fail in bubble and depressionary periods (times of investor panic and euphoria), but will almost always prevail in normal periods. if you’re trading bubbles and panics, technical is best. if you’re trading a normal market, fundamental is best.

This past decade…how many periods of “normal” did we have? Correlations changed, and almost went to 1 last year. Accounting practices have been under scrutiny. Firms that had a positive fair value went out of business. MPT & EMH have been criticized, asset allocation called into question.

I don’t think we need to throw all these things out, but perhaps we need to rethink how we manage our investors’ risk especially during periods of market volatility. For example…in a conservative portfolio there are now wealth advisors who add small VIX components…taking a small bet on volatility could help to create alpha in a low rate environment.

I’d be curious to know what components of fundamental analysis have changed or are being changed given the past decade? Or do we assume that the past decade can be eliminated from required or expected return calculations as it was simply an outlier?

Thanks in advance for your thoughts…

In general, i don’t think anything has really changed except for the time the market took to recover. Warren Buffet is still right and the value approach still works.

there were basement bargain prices for stocks in march, too bad the markets didn’t stay at those valuations forever.

“The value approach still works”

It does, well, until it doesn’t. Wait’ll you try selling a value methodology to someone when the market is in go-go mode (1993-2000). You will starve, just like your clients, if they don’t leave you. They are probably hedging their bets by investing with a growth manager, though, while still listening to you spout happy cr@p about your philosophy.