Most Popular ArticlesHoly Grail or Fairy Tale, Part I
Mr. Wong,
Very interesting article about MA’s.
Back in my early days as an investment advisor in Southern California, I was introduced to Dick Fabian. If I recall correctly, he used an extremely simple 29- or 39-week moving average trading system for all funds and he tried to get clients (subscribers) to make the trades for themselves.
After a while he began managing the money for the clients, as he found that they would not follow through on the discipline for one reason or another.
Curious if you ever looked at his record?
In any event, I’d be very interested in your response.
I was on the track to using a similar management technique when the brokerage firm I worked for then (Prudential Bache) strongly advised against any “market timing” device and basically put an end to my plans. I’ve often wondered what would have happened had I been allowed to pursue that technique.
I really enjoyed the simple way you laid your research out…very readable.
Blessings,
Mark Hollingsworth
Ted Wong replies:
Mr. Hollingsworth,
Yes, I am familiar with Dick Fabian's work (I believe his son took over his "Telephone Switching" business, which should be renamed "Internet Switching" to reflect the era of technology). I didn't follow his records but heard rumors that his subscribers were warned about the October 19, 1987 crash, but were a bit too late to act that Friday.
You are right that the most difficult part of any active management approach is the discipline on the part of investors to adhere to the signals without questions. It's hard to do!
I used a major discount brokerage firm, and ran into similar resistance due to their "market timing" policies. I since have switched over to fund families such as ProFunds, which welcomes active investors.
Thanks again for your kind comments. I'm glad that you enjoy the articles.
Ted
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