Heretics of Finance: Conversations with the Leading Practitioners of Technical Analysis

Andrew W. Lo

Unless you are a Puritan, a sadist, or a masochist, there is very little one can say that is positive these days about the stock market. However, in time a new bull market will be born and we all want to be as careful as we can to preserve our capital until that time and then be prepared to profit from the next “new era”.

Stock and market analysis has his been divided into technical and fundamental analysis. Both tools should be used to optimize results. For 35 years or so I have been looking for the “magic bullet”, the “Rosetta stone” which would be the key to unlock the secrets of recognizing critical patterns that would allow me to invest and trade with perfect success. I am pretty sure there is no such thing. However there are numerous useful tools and techniques and especially mind-sets that can help one to optimize one’s results as an investor or trader.

The Heretics of Finance: Conversations with Leading Practitioners of Technical Analysis, by Andrew W. Lo and Jasmina Hasanhodzic, is a “must-read” for anyone who is interested in investing and/or trading markets.

It is not so much the specific techniques discovered and utilized by the thirteen technicians who are interviewed that make this book so readable and so important. What is timeless is the wisdom of the professionals, and their sophistication. For example, this single observation, by Walter Deemer, provides the kind of insights invaluable to everyone: “Whenever you think you’ve got a key to Wall Street, somebody comes along and changes the lock. Whatever indicators work, however well, however, long, something will come along to change them, and you always have to be alert for new things to do.”

Another brilliant insight is provided by Paul F. Desmond: “People tend to get too specific about theories and say that it doesn’t matter what the market is doing, this is what the market is going to do. That’s really dangerous. They’re saying that their theory is right, and the market is wrong. The market is always right.”

This is another very informative book that is easy and fun to read. I am so glad I have had the opportunity to read it, and I hope some of you will enjoy it as much I did, and also find it quite useful.

Review by Len Oppenheim

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