V.16:9 (434-442): Henry Pruden of Golden State University by Thom Hartle

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 analysis?

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.

Why?

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. That’s 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 — but I didn’t want just to teach marketing, which is what I had been doing.