December 17, 2004 was a very important day for the MTA. On that Friday, at 11 am a final oral presentation on the CMT and the series 86 exam was made to the NYSE and the NASD.
In attendance were 6 lawyers from NYSE, 3 lawyers from NASD plus our own lawyer, four members of the MTA, two psychometricians and myself.
David Krell served as master of ceremonies, and led off with introductions of everyone and a frame for the presentation. He was followed by Barry Sine, who discussed the differences between fundamental and technical analysis. Next came Ken Tower speaking about the MTA and the CMT, and finally Ralph Acampora finished the presentation with concluding remarks. Stuart Kaswell was there to answer legal questions and Linda Montgomery was there to field questions on our just completed BOK study that was made available to them.
Each member of the presentation team was chosen very carefully. David Krell was master of ceremonies because he himself is the President of an SRO and is a colleague of these people. Barry Sine is a CFA CMT and spoke eloquently on the differences between the two disciplines. As a past President of the MTA Ken Tower knew and presented well the background of the MTA and the CMT, and Ralph Acampora was at his articulate best presenting the conclusion. If you would like a copy of the just completed BOK study and or a copy of the power point presentation made that day. Let me know and I will send them out to you.
With Ralph Acampora’s permission, his concluding remarks are reprinted below.
“Good morning ladies and gentlemen,
I would like to take the last few minutes of your time to summarize what you have just heard and then to ask that the subject of technical analysis be treated as a separate discipline. A discipline that is neither better nor less than the discipline of fundamental analysis. They are both equally important but very different. To begin, I took the liberty of going to the dictionary to retrieve the definitions of three words: ‘discipline’, ‘art’, and ‘science.’
“Discipline” means instruction; a subject that is taught; a field of study.
“Art” means a skill acquired by experience, study, or observation.
“Science” is a body of knowledge with its own axioms, rules, and language.
Ladies and gentlemen, the subject of technical analysis fits neatly into all three of these definitions. We are very disciplined, we make many many observations, and we surely have our own rules and language. I know that there are some lawyers with us here today. And I would like to ask them a rhetorical ‘what if’ question. What if they were asked to study and pass the medical boards? Would this subject be relevant to their current practice of securities law? I suspect that the answer to these two queries would be a resounding no!
Well, this is what technicians are being asked to do—we are being legislated to study and pass a subject that is irrelevant to what we do: a subject that we will definitely never use in the future.
Here are the basic differences: fundamental analysts try to determine the financial well being of a company, plain and simple, while technical analysts try to time the purchases and sales of that company’s stock, two very distinct objectives but obviously both are extremely value added to the investor.
In my firm, Prudential Equity Group, we take a practical approach to combining both disciplines. Our fundamental analysts consult with the technical department in order to make a more informed decision. Due to my seminary background we call this product “Twice blessed”. Our clients love it when the “what” (the fundamentals) and the “when” (the technical) agree. The clients absolutely love it!
I am proud of my fellow technicians for meeting the challenge to become more professional 35 years ago by creating the Market Technicians Association; they met another challenge, about 15 years later, to become more professional by creating the Chartered Market Technicians designation; and now they are responding to protect the public against incompetent technicians.
I ask on behalf of the public, that the SROs identify, recognize and separately test the differences between technical and fundamental analysis.
And I end by saying that the most expedient way to accomplish our goal is to allow the CMT Level 1 and 2 to serve as an alternative to the Series 86 examination. And that, ladies and gentlemen, is what we are asking for today. And on behalf of me and my colleagues, we thank you for your time and your consideration”.
Following that conclusion, a few questions were fielded and our group left. I cannot tell you if we won or lost, only that the volunteers representing you gave a truly wonderful concise and thorough presentation that day. It was one of which you all can be proud. We will know the answer from the NYSE and the NASD soon.
Sincerely yours,
John R. Kirby, Project Manager
PS: The MTA is changing. Along with that my title is changed. Please be assured that as long as I am with the organization, you will continue to receive my best efforts. Thank you.
