" The industry is more technical than ever"??? Reposting this as last time the query went unnoticed and still confused…
What does it mean by the above statement ? Normally this is statement made by most people when asked about the markets/industry today. Especially used by risk management professionals. Does it mean that
Market can be approached and analysed by using technical analysis in a better way than using fundamentals? (I believe that both are situation and need oriented and both are equally good)
the use and dependence of technology is more than it was ever before ? ( I personally dont feel it as a reason but…!!!)
The industry is better organised and structured so there is a need for structured thinking ,and the use of models for understanding industry is prudent in most of the cases?
any other reason…………
I am sorry if I am making a mistake by posting it under CFA Banner(But I feel this is the most active in this forum). It must be trivial for most of you but need your help as I feel that I need to stop taking things for granted without understanding the true essence.
More context please, and fewer exclamation points/question marks. Where did you hear the quote? Interpretations 1-3 you’ve given are all valid, depending on who said this stmt and in what context.
If you google “The industry is more technical than ever”, you will see:
Nobel Laureate Robert C. Merton feels that quantitative risk analysis will be very much a part of the future of finance. In an interview with Risk (subscription required), Merton said he is “really optimistic” for the future of quantitative analysts, explaining that “The industry is more technical than ever, and there is as much need to understand the risks in the system as ever. This means you need technically minded people.”
My interpretation after reading would be closest to your explanation #1. But he’s not really saying “technical” in the sense of “technical analysis”. He’s saying, I think, “the industry has gotten so technically sophisticated [with quantitative strategies, precise risk management measures, tools, and techniques, greek letters to measure risk/volatility/likelihood of loss, etc], that quantitative analysts [who have been trained in these tools and techniques] will be in great demand in the coming years.”
Sounds about right. Especially in the risk management part.
By the way, technical analysis today doesn’t look and feel very “technical,” compared to the depth in which fundamental analysis goes and the algorithmic technicalities of quantitative investing.
But it’s useful to remember that when technical analysis was introduced in the early part of the 20th century, it was a much more “technical” way to analyze stocks than much of what had preceded it, particularly the calculation of technical indicators before computers were widely available.
So then it means that he is only referring to technicalities of quant finance rather than compare it with fundamental approach… bascially he is referring to growing requirement of quant analysts and the pace at which the technical analysis is developing … Thanks for the info @supersadface and @bcadwick