Respectfully, I’m sure you receive hundreds of mail and that this particular email will be met with a generic response or be hidden down under the multitude of responses you already receive. Either way, I admire you sincerely and this engaging request has caught my attention enough to give what I’m sure will result in a “too much information” response.
I have read all (currently in between various chapters of each of your books as I do enjoy the “flip and jump” nature of how you write) so this is directed towards the Michael Covel who I have come to appreciate in his writings.
A little personal history (its relevant I promise)…
I have studied undergrad and advanced graduate in the fields of Tax, Accounting and Corporate law, I am a Chartered Accountant and went on to work from intern to manager in a big four accounting firm for 8 years in 5 countries across the globe.
I mean when I say this, in no way do I mention this history proudly, I actually rather sheepishly admit this to you because I know based on your books that this will clearly highlight my biggest challenge I have faced with my trading. I have spent my entire learning life under the EMT and Fundamental analysis framework that it almost made me physically ill picking up a book on “Technical analysis” (which was vehemently rejected and crucified from all of my professors and managing partners). But the simple question I never asked was, why? and why did it keep coming up that those successful investors that I read about or studied were either directly or indirectly proponents of trend following.
I left the firm to begin “investing” which in reality was my attempt at analysing companies that showed significant weakness or strength on fundamental factors based on my own insight and experience. Identifying pricing ineffeciencies between my analysis and the market. Without humbling myself further, I think now we both agree that markets are irrational and are more than happy to remain that way regardless of what balance sheet, earnings or macro economic factors clearly uncover. I think the hardest thing was being right but no one else in the market thinking so…
Obvious humor aside, now pennyless (over dramatised, but that feeling is right there) I began my own research on what seemed so obvious before, why not flip the process by starting the analysis with the price (empirical) and identify its movement before the hours and weeks of endless fundamental back office analysis (or better yet without it whatsoever as it clearly means nothing to Mr. Market) “ahhhhhh so this is technical analysis…” so here we go…
Biggest challenge: for me, picking up this book and starting from zero…
Regardless of the response, I appreciate the question Michael.
Start here. That will connect you to a ton of insights.
And make sure to read all of the links in my site nav bar.