Customer Reviews

The Heretics of Finance: Conversations with Leading Practitioners of Technical Analysis (Bloomberg)

5 star:		(4)
4 star:		(3)
3 star:		(3)
2 star:		(6)
1 star:		(1)

 

 

I can't help but feel that much more could have been done with and asked of the incredible pool of talent that the authors spoke to in putting this book together. While I can understand that coming up with a list of standard questions probably made it easier to write--it would have been so much more interesting for the reader had the questions been specific to the work each of these technicians does. Still, this book will be for many a wonderful introduction to the men and women who have been working in this field for several generations. Insights and experiences are shared--and if you are truly interested in technical analysis, as I am, and want to hear from some of the people who have forever changed the work we do--I don't see how you can resist buying this book.

What a gem of a book, especially for a new or intermediate level investor who is looking for a broader perspective on the type of investment methods they might want to follow. There are no charts in the book, and only a few techniques or systems get described in any detail. This is a "why" book more than a "how to" book, although some of the analysts have written books on their techniques if you find something that lights a bulb for you.

The basic flow is a set of common questions asked of leading technical analysts, like John Murphy, Stan Weinstein, Bob Farrell, Paul Desmond and Ralph Alcampora (similar to the "Market Wizard's" books). The questions and the complete set of answers provides a rich look inside the thoughts and beliefs of some of the giants of technical analysis, like insights on why technical analysis is a study of market psychology as analyzed through the filter of supply and demand, that technical analysis is really the best way to "time" a trade, even if fundamental analysis is used to find better potential candidates, on how to increase the "signal to market noise" ratio to improve performance, and the critical differences between an analyst/investor and a trader, and how you better find out which suits your personality best if you hope to succeed in the markets.

Some of the questions take the analysts back to the start of their career to see how they found their way to becoming leading analysts, and why they made some of the choices that they did. For someone who wants to know "why" someone did what they did in the investing world, this is a great read. If you still think that fundamental analysis is the only way to analyze markets and that technical analysis is voodoo, this book will open your eyes.

Enjoy!

I had hoped this book would be similar to "Market Wizards", or a more recent book like "Hedge Hunters". These books contained *interviews* with successful traders. Unfortunately this book doesn't really contain interviews, it's more like a single questionnaire that was sent out to a bunch of people, and this book collects all of their answers. It makes for pretty boring reading, because there's no conversation between interviewer and interviewee, no followup questions or any kind of reaction to the answers given.

Technical analysis is rejected by most academics and many practitioners, considered a black art by many others. Still, technical analysis has grown in popularity. "The Heretics of Finance" is a compendium of the responses to a questionnaire by 14 experts in the field, aimed at opening up the "black box."

Unfortunately, the authors provide no synthesis of the material, and with the alphabetical response listing ends up jerking readers' minds all over the map. About all one learns is that experts do not rigidly apply their rules.

As a practicing technical analyst for the last 18 years, I can relate to and understand the intent behind the set questionnaire used by the authors to bring out insights from the current masters; the answers to the same question by all the leading practitioners do offer remarkable insights for a practicing technical analyst like me. The commonality of answers for some set questions like in what kind of market when you make most mistakes tell you that those would be areas where you are also likely to make mistakes if you try to force things...

Briefly put, I have got lot of insights and also an understanding of how personal biases affect even seasoned and celebrated technical analysts featured in the book especially in their views on Elliott and Gann. While I completely disagree with most of the experts featured here especially on Gann's theory and methodology, I would still highly recommend the book.

I would also like to thank the authors for taking a scientific approach to bring the insights into art and craft of technical analysis to a wider reading public. You have to get beyond the dismissive attitude to get a proper understanding of a valuable tool for market analysis.

It is promising and refreshing to see a finance professor of Andrew Lo's status give serious attention to technical analysis. As academics veer from the efficient market hypothesis, and more research is done under the tenets of George Soros' Institute for New Economic Thinking, there is increasing hope that economics will for once prove itself both plausible and useful as a science.

While this book is a step in the right direction, it is an unapologetically half-assed effort. Lo is clearly resting on his laurels and looking to make a quick buck. Each interview is based around the same generic questions - I'm not even certain if Lo is doing the interviewing. Given that he was granted an audience with such notable traders and investment managers, one would assume he'd tailor specific questions to each of them, to ensure their wisdom is documented - and to keep the book interesting.

Unfortunately, no such attempt was made. This book could have been written by sending each interviewee a generic Q&A and then publishing their feedback. Anybody hoping for a volume with the color, insight, and variability of a classic like "Market Wizards" will be sorely disappointed, and would be better served reading or re-reading a book in that series. Technical practitioners have been interviewed and published before, and more successfully.

The only reason I give this book 2 stars - instead of 1 - is that Lo's (feigning) interest in them offers them a new shred of credibility. I hope more research - and more serious research - is directed towards technical analysis.

This book consists of interviews with around ten technical analysts. Most of the analysts get the same questions and there are no follow up questions. The questions are of the following kind:

- How did you get interested in technical analysis?

- Do you have a mentor?

- Do you share your methodology with other people? Why?

- How much of your work is intuitive?

- Is astrology bad for technical analysis?

- Is it a good idea to draw the charts manually by hand?

Maybe this is a poor student term-paper that was turned into a book. The questions are simplistic and dull beyond belief. They could easily have been put down on a piece of paper and just mailed to the interviewees. I don't know whether the authors have zero experience of technical analysis or their target audience is absolute beginners. Probably the former, because their biographies do not highlight much trading experience. If I were one of the analysts interviewed I would get irritated and make sure I wouldn't say anything of real value.

Technical analysts are often seen as very bookish types far removed from the action of the market. People used to ask where the technical analysts' yachts were. They assumed that if you do not make money, technical analysis is meaningless. That is exactly the image I get when I read the book. A bunch of people sitting in some ivory tower far removed from reality. What I can't fully make out is whether it is the interviewers or the interviewees that sit in the tower.

I love the question and answer format if the interviewer is knowledgeable and ask interesting questions. A great example is Drobny in Inside the House of Money: Top Hedge Fund Traders on Profiting in the Global Markets. He connects with the people and he doesn't ask them a predetermined set of silly questions. He goes with the flow and probes where needed. That is a book I can heartily recommend. The Q&As in the magazine "Technical Analysis of Stocks and Commodities" are also much more interesting that the scribblings in this book.

The intellectual history of the finance field going from a simple belief of efficient markets in the 70s to a much more nuanced picture today is described in The Myth of the Rational Market. That book doesn't directly deal with technical analysis but it is infinitely superior to current book.

In conclusion a clear one star book. Stay away

Do not buy this book if you are interested in learning about performing technical analysis.

Do buy this book if you are interested in reading a questionnaire answered by several technical analysts. Also, if you are interested in the history of technical analysis, this may be for you. This book does not contain actionable intelligence.

The only thing I learned from this book is when John Murphy plugged his book "Intermarket Technical Analysis", which I subsequently read, and it is excellent.

A little bit disapointed. The book makes an impression of a series of interviews with profesionals but for an unsophisticated audience - which is a bit strange considering who the authors are. Some of the questions asked are from a trader's perspective insignificant, like What led you to interest in TA?, or What did you learn first?, or did you learn by yourself, literature or a teacher? - any serious-profitable trader developes his own market analysis methods - studying TA with a teacher is a concept I find pittyful. People who are deeply involved in the subject might be disapointed as the book leaves very little to think about and reasearch yourself - which is really the only activity that makes us better traders.

Maybe because I had higher expectation on this author's book after I learned about his research studies on technical analysis from a featured interview, "The Chronicler Of The Heretics, Andrew Lo And The Future Of Technical Analysis", by Jayanthi Gopalakrishnan, the editor of Technical Analysis of Stocks & Commodities magazine. When I saw this book in the bookstore, I was eager to find out what he has uncovered through his years of scientific study of technical analysis. After all technical analysis need some deep and thoughtful analysis by someone like Professor Lo to show the world that technical analysis is something that works in real world and that can be explained through scientific theory. Technical analysis is not voodoo art or just empirical collections of many successful technical traders. With that kind of expectations, I opened the book and went through each chapter. The more I read, the more I felt disappointed. There was nothing in this book that really gave me anything new regarding technical analysis. It is simply a bunch of questions and answers that are not even fun to read. If you have read the book, "Market Wizards: Interviews with Top Traders", by Jack D. Schwager, you will understand what I meant. This book does not provide the details of technical analysis like the book by John Murphy, nor provide deep insights into those who succeeded in the market using technical analysis. I hope his next book, if there will be one, will be more useful and worth the time and money for the traders like you.