V.11:7 (277-284): John Bollinger Of Bollinger Capital Management by Thom Hartle

John Bollinger Of Bollinger Capital Management by Thom Hartle

John Bollinger, C.F.A., C.M.T., former market analyst for CNBC/FNN, president and founder of Bollinger Capital Management, author of the "Capital Growth Letter" a market letter for the average investor employing a technically driven asset allocation approach began as a cameraman for the movies before he switched to the quickly expanding world of computerized investing. From there, he went on to form investment techniques for which he gained renown, including the Bollinger Bands, in which moving standard deviations are used to plot trading bands around a moving average. Stocks & Commodities spoke with Bollinger on topics ranging from those trading bands to his philosophies on going long and going short.

How did you get started in the business? Originally, I was a camera man in the motion picture business. In the late 1970's, I purchased one of the early microcomputers and started thinking about how the early computer technology could be married with investment technology, such as it was in those days. The technology was rapidly evolving at the time. Over the next few years, I slowly switched my focus from the film business to the investment business.

What an unusual beginning!

And out of that beginning came a logical theme that continues to dominate. When you look at the capacity of a computer, even the early microcomputers, you see how they could help in the investment process. The calculation of even the simplest indicator was done by hand then, and it was a time-consuming task; but it was easy to write a basic program that could calculate the indicators that we used at the time. So by using this little microcomputer — pre-IBM PC, I might add — I was really able to make a lot of progress and do some things that weren't being done widely because computationally they were too complex. It allowed me to get a leg up on the rest of the market participants .

Did you look for the Holy Grail of investment, like everyone else?

I started off as probably everyone does, as a fundamentalist, and then became very frustrated with that approach. I would find time and time again that the fundamental stock facts would indicate you should own this stock or- that stock and then that stock would go down, or the fundamentals would say that you should sell the stock and when you did, the stock would go up!

So what did you do?

I tried to add some value with technical analysis, and over the years I've developed an approach that marries the two disciplines. The buzzword I would hope that's a rare event. What that I use is rational analysis, which is a would look good? combination of technical and fundamental analysis.