V.10:9 (370-375): Real Life: Shearson's Jeffrey Weiss by Thom Hartle

Real Life: Shearson's Jeffrey Weiss by Thom Hartle

Some people get a start on their careers early, but Jeffrey Weiss, a Chartered Market Technician and a first vice president with Shearson Lehman, began earlier than most, at age 13. The technical analysis risk management approach (Tarma) he pioneered was developed from his own trading experiences, including the disastrous 1973-74 bear market. His opinions have been widely solicited outside Shearson and he has been a guest on such well-known financial and investment shows as "Wall $treet Week," CNBC's "Inside Opinion" and "Business View" and CNN's "Business Morning" and "Moneyline." He is frequently quoted in the print media as well. Stocks & Commodities interviews Weiss on topics ranging from trading perspectives to the philosophy behind Tarma.

How did you get started following the markets and with technical analysis?

Well, it all began when my sixth-grade mathematics teacher gave me and the other pupils in the class 50,000 hypothetical dollars each to invest in the stock market and I managed to make quite a bit of paper money Ñ so to speak. Around that time was my 13th birthday and my dad gave me $400 to do the real thing. I doubled my money over the next year and my fascination with the stock market was born. It all seemed too easy, though, and it led me down

A garden path?

It led me down a false path, you might say. It was that easy to double my money in one year, in Mattel Toy, from 1968 to 1969. I made 100% and sold the stock at the equivalent of $160 per share. But I learned my real lesson in the market after I had piled up some profits, purchased a bicycle with my profits from Mattel and began peddling after school every day up to the Shearson Hammill Ñ that's what Our firm was called back then Ñ brokerage office in the late 1960s. I kept on wheeling and dealing, and things were great until 1973-74, when I experienced what was at that point the most devastating bear market in many, many decades. Out of that I was able to transform a financial loss into a real-life gain, the essence of which was a discipline to help me cope with capital preservation and not just capital appreciation. That's called TARMA, or technical analysis risk management approach, which is what I'm known for today at Shearson Lehman Brothers.

What did you do after suffering this string of losses?

I did something that I don't see done enough today. I dwelled on my losses. I forgot about the times I made a profit because I didn't learn too much from those times, but I consistently analyzed my losses in depth. And I realized that if we were in a bear market the way we were in 1973-74, no matter what I purchased, the chances were that I was going to lose money. So I began to look less at specific stocks but instead incorporate these specific stock analyses into market segments and then the market as a whole. And I also learned about the uses of a stop order and that capital preservation should always precede capital appreciation in any sound, comprehensive investment discipline.