Henry Pruden, who heads up Golden Gate University's Institute of Technical Market Analysis, mixes the classic technical methods with the new and promising ones. S&C spoke with him to find out what he has to say about technical analysis making inroads on respectability in academia.
How did you first become
interested in technical
In 1974, while I was
teaching at the University of Texas at
Austin, I invested in the stock market.
Unfortunately, I lost more money in my
portfolio that year than I was earning.
So I looked into the study of securities
and realized something: My colleagues
from the school of finance were lost.
They were relying on an economic
model that had long been discredited;
the market had outgrown it. When I
started looking around for methodology
with which to analyze the market, I
gravitated to technical analysis.
Because technical analysis is based
on the realistic assumption that people
are motivated by their emotions, as well
as accounting for the group influence at
work. Thatís how I originally became
interested in technical analysis. Later, I
left full-time academia and moved out
to San Francisco, but in the back of my
mind, I still liked teaching ó but I
didnít want just to teach marketing,
which is what I had been doing.