Dancing with the Trend

Survivorship Bias

by Greg Morris

The story about Abraham Wald’s work as a member of the Statistical Research Group during World War II can shed some light into money management (widely disseminated as Abraham Wald’s Memo).  Wald was tasked with damage assessments to aircraft that returned from service over Germany, and determine which areas of the aircraft structure should be better protected.  He found that the fuselage and fuel systems of returned planes were more likely to be damaged than the engines.  He made a totally unconventional assessment: Do not focus on the areas that sustained the most damage Read More 

Dancing with the Trend

Article Summaries 4-2016 to 7-2016

by Greg Morris

Most blog authors on StockCharts.com are writing about the current markets and do an exceptional job.   I do not write about the current markets as I wanted to share my experiences after 40+ years as a technical analyst.  Not only experiences with trading and investing, but model building and money management.  I also share the details of all the Master’s degrees I have – those expensive learning experiences that hopefully I learned something from.  Since I rarely go back into the archives of other’s blogs that I read, I wondered if that is common or not.  Read More 

Dancing with the Trend

Know Thyself III

by Greg Morris

This is the third article dealing with cognitive biases that totally screw up your decision making.  The first article, Know Thyself, covered anchoring, confirmation bias, herding, hindsight bias, overconfidence, and recency.  The second article, Know Thyself II, covered availability, calendar effects, cognitive dissonance, disposition effect, and loss aversion/risk aversion.  Most of my education on behavioral investing came from books by James Montier, Hersh Shefrin, and Thomas Gilovich.  Two great websites for this stuff are from Tim Richards and Martin Sewell Read More 

Dancing with the Trend

WHY the Gap Between Analysis and Action?

by Greg Morris

When I started getting interested in technical analysis, there was no internet, no Amazon, only bookstores.  The investing section was usually quite small and the technical analysis sub-section only had a few books.  Fast forward today and things have changed considerably.  Fewer bookstores and most available online.  Amazon seems to dominate.  Technical analysis books are everywhere; you have your giant bible-like tomes from Kirkpatrick, Pring, and Murphy.  There are hundreds dedicated to a single discipline and there are still many in the “get rich quick” Read More