All By His Elf: Robert Nurock by Thom Hartle
The most money is made in the market by those who are able to identify trends early and stick with them
— not trade out of issues just because they've gone theoretically too far, too fast." — Robert Nurock
Robert Nurock is perhaps best known for his 19-year sojourn on the Wall Street Week TV program. He
decided, in October last year, to resign as panelist and "Chief Elf " on the respected financial show to
concentrate on his own research. Nurock spoke with STOCKS & COMMODITIES Editor Thom Hartle via
telephone on Tuesday, February 5, 1991.
To start off with the basics for our readers, let's talk about technical indicators, because that's
probably what you're best known for. What would you say are some of the things that indicators can
do for you in terms of your investment analysis?
I think the most important thing that an investor or an analyst should look at when he or she analyzes
technical indicators would be to try to find some sort of objective measurement of the factors that
influence or measure supply and demand for the stock market. The indicators that are traditionally
adopted by a market analyst look at investor sentiment or psychology in an effort to determine whether
investors are overly bullish or overly bearish. Market analysts look at the market's momentum or rate of
change to see if the market has moved too far in one direction, not unlike a pendulum that would then
swing back in the opposite direction.
What about speculative confidence?
We would also look at indicators that reflect speculative confidence, or the willingness of investors to
take on risk. Essentially, when you're at the top of a market cycle, investors are no longer concerned with
risk; they're willing to take any bet whatsoever. On the other hand, when you're at the bottom of a market
cycle, investors are only concerned with risk, they're not concerned with reward, they just want out of the
market. So we look at measures that would signal the willingness of investors to take risk.