Fill the Gap Episode Five, with Special Guest Frank Teixeira

Listen above, or subscribe on your favorite podcast service and never miss an update!


Frank Teixeira’s full CMT presenter biography

Charts mentioned in podcast

Bonus link: Here is a video of Frank working at Starland, demonstrating his “all in” passion for everything he does, including running a successful sports and entertainment complex!


Tyler Wood  00:13

Welcome to Fill the Gap, the official podcast series of the CMT Association, hosted by David Lundgren and Tyler Wood. This monthly podcast will bring veteran market analysts and money managers into conversations that will explore the interviewee’s investment philosophy, their process and decision making tools. By learning more about their key mentors, early influences and their long careers in financial services, Fill the Gap will highlight lessons our guests have learned over many decades and multiple market cycles. Join us in conversation with the men and women of Wall Street, who discovered, engineered, and refined the design of technical market analysis.

Fill the Gap Episode Five, with Special Guest Frank Teixeira - 2023Fill the Gap is brought to you with support from Optuma, a professional charting and data analytics platform. Whether you are a professional analyst, portfolio manager or trader, Optuma provides advanced technical and quantitative software to help you discover financial opportunities. Candidates in the CMT program gain free access to these powerful tools during the course of their study. Learn more at Good afternoon, Dave Lundgren, how are you today?


Dave Lundgren  01:54

I’m doing excellent, Tyler. Good to see you.


Tyler Wood  01:56

Good to see you as well. Welcome to Episode Five of Fill the Gap with a very close friend of yours, Mr. Frank Teixeira. I understand you knew him as a client before you two worked together. Is that right?


Dave Lundgren  02:10

Yeah, I mean, that’s when I really got to know him. But actually – the first time I met him was actually when during my years at fidelity, he and I and our wives were taken to an early showing of one of the Harry Potter films, I believe it was by one of the sales guys at Merrill Lynch. And so that’s when I met him and his wife. And we never really communicated too much after that, when I started my own research firm after leaving Fidelity, Breakaway Research, he was one of my clients. And as you know, interestingly enough, he was my only technically oriented client, all of my clients, other than Frank were fundamentally oriented investors who appreciate the value of technical input. So that’s when I really got to know Frank a lot better. And, you know, we worked together for a couple years. And I think he just saw enough differentiation in my research relative to his own, certainly his own research, but as well, the research he was receiving from the buy side that he had asked me to consider closing down my shop and joining his team formally, and it was hard for me to do that. Because I had my own company, I worked a mile and a half from my house, I had this you know, office right across the street from where the school was when my kids were, and they’d come in and do their homework and stuff like that in my office. So it was really hard for me to give it up. But you know, if you get to know Frank at all, you’ll come to appreciate how persuasive he can be. For a year of discussion, I decided to close it down and join his team and I was there with working with him for 10 years, but I was there for 13 years.


Tyler Wood  03:34

Excellent. What year did you join Frank’s team at Wellington Management?


Dave Lundgren  03:39

I formally joined in November of 2007. And I joined as a senior analyst on the team, and then I think it was in 2015, or 16, I then became the co-manager of the funds we were managing. And then in 2018, Frank after he was 21 years at the firm, he decided to withdraw from the partnership. And with that I took over as the director of technical research until I left back in December.


Tyler Wood  04:02

Excellent. Yeah, Frank was a partner, portfolio manager and the director of technical research at Wellington Management from 1997 through 2018. And he built and lead a really great team inside of Wellington Management.


Dave Lundgren  04:18

Yeah, yeah, he did. It was – I was really fortunate to be able to work with him, of course, but also the team that he assembled: some super talented individuals. So Mike Murphy, has moved on, I think he now has a hedge fund where he’s dealing and it might be – it was either crypto or some other alternative asset, super talented technician. And then Guy Cerundolo, who actually, when I worked with him at Wellington, that was actually our third time working together. We worked together with Fidelity and together along with four or five other guys from Fidelity to found Lyceum Capital, which was the hedge fund. And then I left the hedge fund, and he left the hedge fund to do his own thing, and then we both came back together at Wellington. So it was our third time working together. So Guy now has a very successful research firm, Cerundolo Research, and he provides technical research to I would imagine probably mostly institutional investors at this point. And it’s great research, I get it, read it every day, super talented guy, a great idea generator and you know, one of the nicest guys you could ever meet.


Tyler Wood  05:16

And definitely will be a future guest on Fill the Gap, where we can find out his secret recipe to homemade Italian wine that the Cerundolo family has kept secret for generations


Dave Lundgren  05:28

I’ve had it! That’s delicious. Yeah.


Tyler Wood  05:30

So with most of our guests, we have brought on highly regarded household names, sell side research analysts that people are very familiar with. Certainly anybody who tunes into financial news media has probably seen a lot of our guests. And what was really unique to me, for anybody who does not know Frank Teixeira personally, that excludes most of the Boston institutional community who probably took his class at the Boston society. Frank is just a tremendous educator, great speaker, incredible storyteller. And I’m really looking forward to everyone’s feedback on this podcast with Frank Teixeira, CMT, CFA, partner, portfolio manager and former director of technical research at Wellington Management.


Dave Lundgren  06:18

Welcome to the fifth episode of Fill the Gap, the official podcast of the CMT Association, very proud of all the guests we’ve had on so far, it’s been a very diverse selection of guests. But this one in particular means a lot to me. I know him personally as a friend, as a former colleague, my former boss. I’ve known him for 20 years. And he’s one of the few technicians who has managed actual institutional portfolios for a 20-year period with a very stellar track record to boot. So today, we’re thrilled to welcome to the podcast Frank Teixeira. Frank, welcome to the podcast.


Frank Teixeira  06:54

Hey, guys, thanks for having me. It should be fun. I’m looking forward to it.


Dave Lundgren  06:57

I know you listen to a lot of podcasts. But I think in our prior conversations, this is your first podcast as a guest.


Frank Teixeira  07:03

It is indeed, and I have listened as you accurately stated to all your podcasts. Congratulations, guys. I think you’re both doing a great job, super fun to listen to.


Dave Lundgren  07:11

But that means a lot coming from you. Thanks a lot for that. I think Tyler, you were giving us an update the other day on –


Tyler Wood  07:16

Downloads, we’re approaching 7000 downloads. So our expectations for your episode, Frank, is that we get a good 10-bagger on this. We’re looking for 70,000 downloads. Okay, Frank, do your best.


Frank Teixeira  07:30

Yeah, success comes when you keep your expectations reined in.


Dave Lundgren  07:35

So we of course, can spend the entire afternoon for several hours speaking with Frank about many, many topics, technical experience, portfolio management and things like that. So Frank, you have a, I wouldn’t call it a non-traditional, but you have an interesting path that led you to technical analysis, and you ended up you know, mixing with some of the legends of the day back then. So why don’t you tell us a little bit about how you got into the business, but then more importantly, how you transitioned to technicals?


Frank Teixeira  08:02

Well, it all depends on how far we want to take the story back, we could take it way back and then that’ll – that’ll end the podcast, or we could take it to when I first met up with Ralph Acampora. So I was at the New York Stock Exchange, I was actually a compliance examiner at the time, if you can believe it. I did that for two years, I was a sales practice examiner, I’d invested in the market. Prior to joining the New York Stock Exchange, I was actually investing while I was in college, I went to St. John’s University, I still remember between classes, putting a dime in the pay phone so that I could call my broker and place the order of the day or the order of the hour. So it was a pretty heated market in 1987. If that tells you anything, and I ended up being really, really successful, not because I was super knowledgeable, but because the market was going up in a straight line and I was watching the Nightly Business Report and I was buying whatever I heard on the Nightly Business Report the very next day with my Prudential broker. After that, the market crashed, a lot of lessons to unpack there. Joined the New York Stock Exchange out of college mainly because I was looking to be close to the Street at the time. And my experience when I was in college actually had nothing to do with technical analysis. I was introduced to technical analysis really while I was doing an audit at the New York Stock Exchange out at an office in New Jersey, met a broker. He had a lot of charts and computer screens, big computer screens back in the day, giant TV tubes, but it was super interesting. Of course he didn’t want to meet a sales practice examiner until I told him he wasn’t in trouble. I just really wanted to figure out what was going on in his office because of the pain I endured in 1987. And this experience was in 1989 that led me to investigate technical analysis a little bit more deeply, I took a technical analysis course which this gentleman recommended. I wish I could remember his name. He recommend that we take Ralph’s class at the New York Institute of Finance. I did that – Ralph was the hook. Anybody who’s taken Ralph’s class knows how infectious he can be. He turned the technical analysis in the market into something very vibrant and alive. And I love to tell stories about how I’d wait after class while he was packing his stuff up, and I follow him down to the subway, and I could see in his eyes, he was like, Oh, my God, this guy again, is waiting for me after class. But that was the beginning of the story there. And after the New York Stock Exchange I ended up at Merrill Lynch in the marketing department, I was actually working in the marketing department as close as I could get to the business. And similar story there. I went to the morning meeting, Bob Farrell, who you’ve already had on this podcast, he was presenting his weekly update, it was on Monday mornings, I believe. And I was sitting there and I couldn’t believe it was Bob Farrell at the time. And I was like, wait a minute, I got to meet this guy. So I followed him out of the meeting, all the way down the hall into the elevator, introduced myself, told him how interested I was in technicals. How great I thought his work was, he invited me to his weekly meetings. Few months later, a job opened up. And needless to say, that changed my life. You know, that was the beginning of a career in technical analysis that led to a career in money management and led to really what’s been a life of meeting, you know, a lot of very knowledgeable and interesting people in this field.


Dave Lundgren  11:38

When you entered the business, was it your plan to get more into the fundamental side of the business and try to become a fundamental analyst or fundamental PM? Or were you just looking to get into finance in general? And like so many of us just kind of stumbled upon technicals?


Frank Teixeira  11:54

Well, look, you know, I grew up in Queens, I grew up fairly, fairly poor, but one person in the neighborhood who was the father of still my very best friend to this day. My father was a construction worker, my mother was a seamstress. And this guy’s father’s name is Vincent Glasgow, who is still very good friends to this day, left to work every day in a suit. And I still remember my father saying, that’s what I want you to do, you know, go to work in a suit. So I investigated that like, Alright, how do you go to work in a suit? Right? You know, back in the day, you didn’t have that many people that could influence your life, particularly when you’re living in Queens and learn that he was, you know, a floor broker for Merrill Lynch and the stock market and finance and say, okay, that’s the secret. That’s what I need to do. It was as simple as that. I don’t want it to sound more profound than it was. But it’s basically like, okay, don’t want to do construction, I don’t want to live this life, I’m gonna see what I can do about becoming someone interested in business. I went to St. John’s as an accounting major, actually to start, switched to finance after a year and became hooked on the idea that fundamentals is the reason that stocks go up and down. My 1987 experience while I was in college as a fundamental, well, quote, unquote, “fundamental” investor led me to say, okay, look, I can make a lot of money thinking, I know what I know. And then I can lose a ton of money, knowing that I don’t know. And then that experience with that broker and with Ralph, the whole idea of risk management and being able to manage a portfolio with some idea of how to control risk really appealed to me. So I don’t know if I was went into it thinking, Hey, I’m a fundamental analyst. But I certainly appreciated the idea that stocks can go up a lot over time without some kind of fundamental backing.


Dave Lundgren  13:51

If I remember correctly in that story from ’87, when you had a rather large drawdown, I will say that way. That was family money, wasn’t it?


Frank Teixeira  14:03

You know, too much of the story. Yeah. So some of it was, some of it was my money. It’s a great story, because it’s a great story about sentiment, because when you read the books about madness of crowds, and, you know, and the sentiment indicators that we use, and hey, when everybody’s in, it’s time to get out – all the things that we say, glibly. The reality is if you live it, it’s exactly what happened: I was in, I was making money because, you know, the stock market was going up. My very first stock purchase was Anheuser Busch, you know, all my broker had to say was like, You drink Bud, right, let’s, let’s buy some Budweiser stock. And sure enough, I did, and that was really appealing as the stock kept going up. And then the market got a little heavier that year, if you remember when AIDS was a big thing, led banks and condom companies and things like that, and that was on the nightly business report every night and I got to get a little bit more aggressive in my portfolio. And let me tell my mom and dad. This is the way to really do things. So sure enough, it ended up being some family money as well. And let me just put the cherry on top of the final piece of this story on one of those phone calls in the hallways between classes at St. John’s when I called my broker I said, I want to buy this stock. And he said, Frank, you don’t have any more money. And I said, Oh. So alright, you know he goes, but you can borrow on margin. What’s that? I, I got my first margin lesson in the hallway at St. John’s between classes. Long story short, the account went from 5000 at the beginning to 21,000 at the high, all the way down to 3000 post-crash.


Dave Lundgren  15:44

That’s actually the largest gain ever then right? Percentage wise.


Frank Teixeira  15:46

Pretty big game. Yeah. Sure.


Dave Lundgren  15:50

You’ve got a couple of years in your track record that are just off the charts. And I always thought that those were extreme. But I had forgotten that you had gone up so much in 1987, you had an early, early taste of success, let’s say.


Frank Teixeira  16:03

Yeah, I guess.


Tyler Wood  16:04

That’s an important piece of tuition as, as some traders call it, that as a college student, you lost 25 grand in 1987, that must have felt terrible, that must have put you on the path to really understanding risk management?


Frank Teixeira  16:17

Well, I really do think that actually, what you’re saying now leads me to another point, if I can just transition a bit. I’ve been doing technical analysis since, call it 1989. And I’ve been a pretty active participant with the CMT. And I’ve met a lot of technicians over time, and I’ve listened to a lot of technicians. And I’ve developed, you know, a lot of I don’t want to say – I don’t want to use the word knowledge – I just listened to a lot of the things that people say and how we talk about the discipline. And I think one of the things about being a technician that differentiates us from other disciplines is that we are great risk managers, I think we’re so good at it, that we overemphasize it, in many ways, I think, in some ways that defines us. And I think because we overuse the word risk management, and loss management and risk control, and all of these things is one of the reasons that we miss the idea of being able to actually take risk. And I think it’s important. And again, I haven’t solved this. And I think that that’s the holy grail that’s out there probably for most technicians that want to have, like tremendous success managing money, whether it be for themselves or for others is how do you find the balance between being a risk manager and taking risk? Because a lot of the words I hear from people have been in the business, whether it be a long time or a short period of time are words like failure, and mistakes, and regret, and losses. And while all these words are part of the clearly the English vocabulary, I think it’s one of those things where if you say these things often enough, whether or not you want to you are internalizing a lot of that language. And I think as you internalize that language, it becomes a part of who you are. And it makes it harder to really accept what’s actually going on. I mean, let’s face it, if you’re a technician, right, I mean, I’m a trend follower. That’s what I do. The lot of technicians out there that I think do great work that’s far superior to the technical work that I do. But as a trend follower, you know, you want to buy stocks that are trending and outperforming over time. And when you buy stocks that are trending and following over time, all that says to me is that price is primary, price is always primary. And the reality is almost everything else is an indulgence at this point. So I think that there’s a lot of things that we could do to change the narrative of being so prolific at risk managing just super important, don’t get me wrong, and I’m not even trying to diminish it. But I think because we rely on it so much. It takes away from our really impressive ability as a group of technicians that value trend following and value momentum and outperformance. I think it diminishes what we can contribute on that end of the conversation.


Dave Lundgren  19:16

Yeah, I totally agree with that. And I think the reason I really appreciate hearing you say this specifically is because you have experience in the record to stand on as you say these things, and these people aren’t going to believe I say this, but I know you do hate to talk about this, but I’m going to do it anyway. Just because it’s not important. But in 1999 correct me if I’m wrong, which I think you were up 508%. So that’s a good example of utilizing the style of analysis to really, truly make hay while the sun shines. But as the environment deteriorated in 2000 you were able to recognize that and change with the tides in I think in 2000. Again, I think you were up 25% as the market kind of imploded. So that’s, that’s a good example of walking that fine line between you know, pressing your bets when the investor is right, and not necessarily ignoring risk, constantly paying attention to what’s evolving beneath the surface. But then when when you do see a change that’s meaningful enough, you know, that’s when you got to really let the process kick in and get you out of the market.


Frank Teixeira  20:12

Yeah, I think it’s, you know, we as technicians, and I think the CMT has done unbelievable job of continuously articulating and bringing great speakers to the fore that is talking about process. And the reality is, there are a lot of ways to make money, it’s just a matter of how do you want to make money, you know, if the goal of doing what we do is to make money, I guarantee you, you will struggle over time to make any real significant amount of money. The goal has to be I have a passion for buying and selling stocks, I have a passion for investing. I was asked a great question by an intern that we’re going to have this summer, he called me. It was interesting, because he was interviewing me for an internship here. And he said, Well, what would you? What would you consider yourself? Would you consider yourself an investor or a trader? And I’ve never been asked that question. And I said, You know what, I think I’m an investor with a propensity for trading in and out. And I think that’s really the way that we can think about what we do because we trade when it’s necessary. Although, you know, the whole idea of trading around an uptrend and trading around the downtrend, I think are things that we may overdo in certain markets, when I think sometimes you just got to take a more forest approach to the market rather than a tree approach. Easier said than done. Easier said than done. But look at the forest and say, sometimes I have to give my portfolio a little bit more rope. Because I think we can all agree, and I think I’ve even heard you say this on the podcast before, Dave, that you’ve never ever taken a drawdown that’s large enough to sink your ship, or I didn’t use those words. But I think that that’s one of the things we can all take considerable comfort in is that even if you have to take slightly bigger losses, you’re never going to take enough losses that you’re so to speak out of the ballgame. I think that risk management is nuanced. Because if you say Hey, are you a risk manager or a pain manager? Well, there’s a difference. They definitely, really well. Yeah, there’s a difference, you know, and if you say you’re a, you know, a risk manager, but you’re managing your risk according to your pain threshold, then that’s not really a risk management that you can actually articulate a process around.


Dave Lundgren  22:41

Right. Right.


Tyler Wood  22:42

You talk about managing risk, but I’m very curious about how you define risk. We just talked about late 90s, 1999, you were up over 500%. But you don’t get that far without some pretty concentrated positions. So for you is the benefit of a concentrated portfolio, which inherently exposes you to greater risk. Is that part of your strategy for outperformance let’s dive into how you think about risk?


Frank Teixeira  23:06

Well, you know, that’s actually a very well placed question, because in 1999, I ran a fairly concentrated portfolio, I had 40 to 50 stocks, most of the time, that was very unusual for the money management industry at the time. But I do recall that there were a lot more concentrated funds actually coming on the scene at that time. So concentration became very, very popular into that high. I’ve never been as concentrated as I was then. But concentration worked particularly well in in 1999, because we had a very narrow bubble type of advance. And if you were concentrated on what was working and you were excluding what wasn’t working, well, clearly you could have outsized returns. I mean, Dave alluded to the highs in 2000. And then the market break at that time and what took place in 2000 2001 2002 is that I actually practiced aggressive risk management once the market broke there. Now use trend lines and moving averages very simple tool that was very early in my money management career and I started off with some exceptional numbers and then when the market broke I had very exceptional numbers on the downside as well I my long only accounts I had very heavy cash so I did very well during the decline and then I ended up having a hedge fund as well and I became aggressively short into the decline. Momentum investor is as momentum investor does and I did exactly what a momentum investor would do, press on the upside and press on the downside. I will say that that early experience of money management, I had to spend the next several years if not longer, unlearning what I learned during really what ended up being a once in a lifetime or once in this lifetime, anyway, so far, market environment. But at the time, I will say this, I was internalizing, even though I wasn’t saying it right. I don’t have to go out and say, Hey, I’m a great stock picker. I’m an unbelievable Portfolio Manager. I am a great short seller. I am a great risk manager. You don’t have to say those things out loud to internalize them. But I definitely internalize those things. They became a part of who I thought I was as a money manager. Fast forward to today. And I had to unlearn a lot of that. And how do you unlearn that – the market teaches you the hard way. In 2003, I’ll never forget it, I was running a long only portfolio that was up over 40%, I was running a hedge fund that was down about two or 3% for the year. And the reason was, I internalized the fact that I was a great short seller, I became a partner in 2003. It almost like it’s like a coronation of sorts. You got coronated, you’ve arrived, and I couldn’t help at some level internalizing that I got there, because I made the firm a lot of money during a pretty prolific market in growth. And that was a lengthy unlearning process for the next several years trying to recalibrate how I manage money putting in a new process. And the fact is too, Dave was working for me for 10 or 11 years, I was buying his research. And it was really, really excellent. It was called Breakaway Research. It was something that was completely different than what I was doing. And I needed the toolkit, another toolkit, and it really, really helped enhance the process of money management, not just momentum investing, so to speak.


Tyler Wood  26:40

Do you see a huge difference between your appetite for risk and the way that you run money? Versus let’s just say the institutional Asset Management infrastructure? Did you? Were you at loggerheads ever?


Frank Teixeira  26:53

I wouldn’t use the word loggerheads, I definitely wouldn’t use that word. I mean, it’s interesting, right? As a technician, who was benchmark unconstrained when that was put in place, being benchmark unconstrained was pretty popular until people realize that being benchmark unconstrained meant that you might have some outlier quarters or even outlier years for that matter. So I would say no, not loggerheads. But I would say that over time, as the institutional environment changed, and people wanted returns with very low risk profiles, the risk profile quarter to quarter could look very, very different than the s&p 500. Could like very, very different than that, you know, if you’re down 1000 basis points versus the s&p and a quarter, that’s a lot. If you’re up 2000 basis points versus the s&p and a quarter, that’s a lot. But it’s that wall around the index that only appeals to certain clients. And I learned a lot about institutional money management while I was the Wellington.


Tyler Wood  27:59

I’ve heard you say, Frank, that it’s very dangerous, looking at the fund flows, because after excellent performance, everybody wants to join the party. And that typically, that’s a turning point, the style of trend following momentum investing tends to underperform in the cycle, right, after all the investors to get involved. Has that continued to be your experience, post the 2000 to 2003 time period?


Frank Teixeira  28:23

I would say yes. And no, I mean, I think, again, it’s a well placed question. I think that, you know, human nature wants to go where the performance is wants to, it wants to follow where their success and typically after years and years of success as some kind of regime change or paradigm shift, I would say, I’m only saying typically, because I don’t necessarily think that it happens as often as we think it happens, I think as a technician, right, and as somebody who’s a trend follower, and a momentum investor, you might be “late,” quote, unquote, in latching on to these regime changes. But the only people who are really early and latching on are the people who are already there when they were on the wrong side of the regime to begin with. Right. So yeah, so I think we, you know, we just have to trust what we do that the real meaningful trends, when they’re established, they, they persist. And that’s the beauty of of trend following and trend analysis and momentum investing. That’s, in essence, its beauty. And I think that we should lean into that more than we do. And I think that there’s still time to do that. Because we have I think at our disposal, the resources and the tools that enable people to embrace that that trend and outperform.


Dave Lundgren  29:40

Brilliant, well said. So, Frank, you’ve been on your own, investing your own portfolio for a couple of years now. I’d be really curious, having worked with you managing portfolios for so many years in both struggling with dealing with you know, the client end of things and trying to make sure we match properly with the proper investor in the fund. You know, we talk a lot about making sure that you as an investor are deploying the right tool so that you can navigate through the different cycles. But it’s even more important to make sure you have the proper clients in your account so that they can also navigate the ups and downs with you. And so we struggled with a bit of that over the years, we managed together, so now that you’re out on your own, and you don’t have those sort of shackles around your ankles, I’m curious if there’s anything you’re doing differently when you’re managing money that you just think is the right way to do it. That just was not really something you could do when managing other people’s money.


Frank Teixeira  30:27

Let’s say this, I always thought what I was doing as a money manager was the right thing to do. And you know, and I hope – Yeah, and I think you know, if we memorialize some of the decisions we’ve made in the past, and I know that that’s a popular thing for technicians to do. I’m a big advocate of William O’Neil and his process, and he talks about writing down trades. And I don’t necessarily believe in a lot of the risk management cut offs that he uses in a lot of his writings. But I think if we memorialize things, I think some of the lessons that we want to take away from them are not necessarily the right lessons, I think we always have to be careful about the lessons we’re learning. I’m always reluctant to hear things like, Hey, I write this down, because I made a mistake. And I want to make sure I never make it again. If that’s the case, then get out of this business. Because you will definitely, definitely make that mistake again. And again. And again. It’s like saying you’re a boxer and you don’t want to get punched, you are going to get punched. And it’s just a matter of how hard you get punched. Do you get up? Do you keep moving forward? That’s the key, you know, trying to succeed and win. And I think that now that I’m managing money on my own, I’ve been doing it for almost three years, I actually have a partner – His name is Frank Longman, I have a trend following momentum approach. He has a mean reverting volatility capture approach, we actually complement each other because he’s doing things that I would never do. And I do things that he’s uncomfortable doing. So net/net, it actually reduces the volume of the portfolio. But what’s different is that a lot of the things that you perceive when you’re managing money institutionally, these so called shackles are sometimes real, right? Because the risk management, please, you can have a position that size that’s too big, that’s too risky, those are real. And then there’s the perceived ones of I wrote an email and I told the firm to buy this, or I just bought this stock yesterday. And now I have to sell it next week, there’s all these perceived shackles that whether they’re real or not, they’re there. And sometimes you don’t make decisions that you should, and other times you make decisions that you shouldn’t. And that’s never going to change, again, because this whole idea of managing money as a business of regret. And it’s one of the words that I tried to leave out of my vocabulary, but it is you sell stocks that you wish you hadn’t sold. I know that people say, Well, look, you can sell it, but you can always buy it back. That sounds great. In theory, I want to write that in the book. It’s perfect for literature, right? But in reality, living it moment to moment, wait a minute, I sold that stock at 80. And now I’m buying it two months later at 88. There are these conversations that you have with yourself. And by the way, I talk to myself a lot. And I’ll tell you why I do it. I am incredibly agreeable. And I can talk myself into almost anything. I think as a money manager now, I’m different in the sense that I’m not measuring myself against the benchmark. And when you’re managing institutional money, you can’t help doing it. Even though you tell your clients your benchmarking agnostic, they are measuring you against some kind of a benchmark. So somewhere, somehow you’re going to bed at night, you’re like, I’m lagging the benchmark. Now the benchmark for me is Hey, am I buying the right stocks? Buying them in the right location? Am I buying the proper setup? You know, what’s my risk with my reward? And if the conditions in the market are prolifically broad, like they have been, this is a bull market, you know, and I know that conversations about bubbles and etc, etc. But this is a bull market. It’s a pretty prolific one to how tightly should you manage risk in a market that’s fully confirmed. Because if we’re looking for problems, I can see lots of problems. But if I’m looking for things to like, I can see lots of things I like. And that’s a lot of times how I feel even about patterns, right? I can find great looking charts in a bad market. But those tend to not have the same success rate as straight looking charts in a bull market. If you say to me, hey, Frank, I need you to look for an elephant in the clouds. I will find an elephant in the cloud. Right? And that’s really what I believe a lot of times unfortunately, you know, if you’re anchoring only to chart setups and chart looks right, there’s more that goes into it. And that’s why I think that’s the most powerful tool we really have is trend following. That is really the one thing that we can lean back and say hey, I’m going to buy stocks that are trending and outperforming. And over time, I’m going to make money, I’m going to take my cuts, I’m going to take my punches, but over time, I’m going to own some of the best stocks in the market.


Dave Lundgren  35:11

So the idea is recognizing the regime you’re in and not only more willfully and purposefully taking risks, you’re going after opportunities, I should say, but also because of the environment you’re in, being willing to maybe expand and allow the volatility of the trend to play out more so as opposed to being more responsive to the risk side of the equation, when you can more definitively say that the environment is not a very healthy one.


Frank Teixeira  35:33

Yeah, I think that absolutely. That has to be the way you think about creating a portfolio and managing risk, because I wish I could, I could articulate it in some kind of formula, because I think people want to leave, you know, every conversation or every book with some kind of a holy grail, like, Hey, is it an 8%? loss? Is it a 10%? loss? Is it a 12%? loss? Well, that’s up to you, right? It’s up to you. And it’s not even just about risk tolerance, right? Because risk tolerance changes with your p&l. Is that something that you can articulate in some kind of a process? Well, if you’re down for the year, take less risk. If you’re up for the take more risk? Well, I can tell you as a momentum manager that likes to press that I am much, much more likely to press my positions when my p&l is cooking than when it’s not. And there is sometimes information in your p&l, you know, if your p&l isn’t tracking the way it should, it could be an early indication, I find more often than not that it is that something internally is changing in the market at the margin. It doesn’t mean – Yeah, it doesn’t mean, Run for your life. But it means, Hey, something it’s a I know what good setups look like, I know what good technical conditions for the market look like. And if my p&l week after week after week seems to be still making money but lagging, or not making money, which is even worse, then that could be an early indication of, Hey, you know what, I probably at the very least, I should probably take down leverage if I manage leverage.


Dave Lundgren  37:04

Yeah, so the idea is using using your p&l almost as a feedback mechanism, because you know, under certain circumstances, when the p&l should be thriving, and you perceive that you’re in that environment, but your p&l is not showing you that, then that’s feedback from the market.


Frank Teixeira  37:17

Yeah, I think we could all agree that if we’re practicing technicians, and we’ve developed some experience in making money with certain types of – whether it be chart patterns, or certain market environments, and that’s not working week after week, after week after week, that’s something at the margin is internally changing. Again, it doesn’t mean it’s the end of the world, it just means maybe be a little bit more of an acute Risk Manager at that point, rather than looking to manage risk all the time.


Dave Lundgren  37:45

Right. earlier on, you almost made the distinction or drew the distinction between whether or not we’re in a bull market versus a bubble. You know, you and I, of course have spoken about this many times over the years. But I think it would be really interesting to share with with our listeners, what your experience was like in 99. And how you would compare it to today. And it sounds to me like you today would not say we’re in a bubble, which is kind of interesting. So I’d be curious if you can compare the two and then drive some distinctions that make it different today than it was in 99.


Frank Teixeira  38:13

Okay, so let me let me say this, clearly, the market conditions today are not the same as 1999, that market advance was very robust, but it was also very narrow and very concentrated in internet and tech. And if you capture that, you couldn’t care less whether or not it was a bubble or not, if you were in that it was all good. And I think that we don’t gain much, because I can tell you that we were having discussions a year before about the market being in a bubble before it actually peaked, a year ahead of time. And I think we gained very little in trying to forecast whether or not we’re in a bubble. But I don’t think technical analysis is really a good forecasting tool. Anyway, for me, I think technical analysis is more about what’s happening, and what are the probabilities of something good happening versus the probabilities of something bad happening. And as long as the trend is up, you give the benefit of the doubt to good things happening versus bad things happening.


Tyler Wood  39:12

Yeah. When you said we were thinking about this a year in advance, was that your technical group or the firm broadly?


Frank Teixeira  39:19

It was happening broadly on the street amongst money managers in particular. So if you were – Yeah, if you were a tech manager, that conversation didn’t resonate. If you were a value manager, that’s all you could possibly say. Right? Because it made no – and it really like when upon careful reflection, when you look back at is like wow, that was incredibly wild. And, you know, 50 60 70 times revenues versus stocks trading at four times earnings. You know, four times earnings were going down and 16 times revenues would stop going up. So do we have something similar to that now? I don’t believe we do. We do have a strong broad bull market. I believe we have that and look, you know, is the next level environments going to look like prior bubble environments? Well, we have to make that assumption based on the tools we have; even the Nifty 50 high was a narrow advance that led to a two year bear market, right? Something has to happen where it’s not as broad as the current advance we have, we can certainly get corrections. Yeah, hey, listen, the index can correct 510 percent. And even there, you’re going to have some kind of a clue there’s going to be some kind of technical divergences that give you an idea that, hey, we’re probably ready for some kind of a correction. But I think tops that lead to significant bear market pain tend to have at least brought a divergence says that what we see now, that’s the way at least I’m handling it. But even if I’m wrong, let’s say I’m wrong about this, and this will be a fully confirmed bubble advance, let’s call it that just for argument’s sake, a fully confirmed bubble advance that ultimately implodes with no divergences, let’s say that that’s the case at some level, right, we will add technicians because we are the best risk managers in the business. At some point, we will recognize that the party doesn’t look the same, you know, all the people that were fun have left and all the people that are drunk are still here, you know, I need to practice risk management more, more aggressively. Now, it’s time to call an Uber. You know, so that’s kind of how I’m thinking about it. I do think that the COVID, market collapse, that one was a fairly confirmed market, but there were some signs of trouble at that high, not the kind of signs of trouble that I think would have foreshadowed the kind of decline we had. But once that market gained the full head of steam risk management kicked in, and if you’re, if you have an appetite for short selling, you could have certainly found a lot of stocks to short during that decline. But I think that the client reset the bull markets actually think this correction here in March that we just had reinvigorated the existing bull market that we’re in this trend right now. But it’s shallow relative to the March correction of last year. So the shallow if you believe in the laws of alternation, this should be something deeper coming once we exhaust this new leg of the advance because while we got oversold, I’m not exactly sure you can make the case that we got deeply oversold. But I also don’t think in a bull market, that’s as fully confirmed as this one is that you should or need to get deeply oversold.


Dave Lundgren  42:26

You know, if you want a slightly contrarian perspective on the whole thing, you could make the case actually quite easily that the global markets have been in a bear market for at least two years, depending on which index you’re looking at. So actually almost three years, including the US, if you look at the s&p large cap weighted, of course, it doesn’t look like it’s been in a bear market. But if you strip out the large cap growth tech names, and then you also just look at things like the value line index, which is equally weighted, or the Russell 2000, which is small caps. Those indices have been in a bear market for two or three years, it was only post the COVID collapse when they finally broke out. So you to your point, Frank, this week could literally just be starting a new leg up in this bull market in the fact that we have 90 some odd percent of the markets above its 200 day moving average, that’s just not bear market activity. In fact, if anything that is very typical of the beginning of a bull market, not the end of one.


Frank Teixeira  43:13

Exactly right. And that’s the information that I think the way you articulated there is the way I think that we should be communicating. I know that one time at the CMT, I gave a presentation at the [India 2019] Summit. And, and I talked about some of the language that we use. And I’m going to share that now. Because I think it’s still pretty important. I think it’s still pretty relevant today. While we understand and can appreciate and even respect the idea of head and shoulders, tops and bottoms and double bottoms and triple bottoms, and marching soldiers and abandoned babies and climaxes and blow offs this language, this language, D values, what we do, we know what it is. But I think if we’re talking to a broader audience, I think a lot of those words do take us back to a place where we don’t need to go. And I think Bob Farrell articulated it really, really well. On his podcast, we was talking about sorcery and witchcraft. And, you know, he’s right. You know, when you continue to use this language and talk about those failed patterns. I think of the values, really what we can bring to the table, which is that kind of data, hey, all markets look like this. Their markets look like this. This is the data that supports this information. This is how I buy stocks. This is why I buy them, this setup in this condition. That’s the information that I think we can share and use so powerfully as technicians.


Dave Lundgren  44:43

As we were speaking with Bob Farrell, he actually stuck at one point mentioned the importance of making sure that we’re using proper terminology as we’re speaking outside of the technical communities. Is that where you learned, because that’s certainly where I learned that I learned it from you. I’m curious if you learned it from Bob.


Frank Teixeira  44:57

I did look at my early days right, Ralp Acampora hooked me on to technical analysis, it was easy. I was a fish in the water and I was, it was easy. Put Ralph in a room with you. And he, he’ll tell you the Brooklyn Bridge, you know. And then after that when I started working with Bob, he molded me into a professional. I really believe that happened. I did tell a story again at the CMT Symposium years back about how I went into Bob’s office one time and, and I shared with him a chart, I used to cut out the Mansfield charts, you know, the little things I had a, like a stack of playing cards that he used to take to the office with me. And I walked into his office with a stock chart, it was computer network technology, I’ll never forget it. And I said, Bob, you know, look at the stock, it’s only $5 I think we should buy this. And he looks at me from his desk, and he says fidollars? And I said, Yeah, it’s only $5. And he said $5, not fidollar, you know, and at that moment, I was like, Oh, my God, did I say fidollar? You know, and I’d never really have gotten rid of the New York accent, I apologize, Bob, if you’re listening to this, I’m doing my best. So I’ve been up here. I’ve been up here in Boston since 1997. And that one lesson, there was the beginning of Hey, you know what he’s right, we are devaluing what we do when we speak in languages and terms, things that don’t necessarily resonate with other people in other states and around the country. And I think that that was the beginning of me thinking a little bit more professionally about what technical analysis is, rather than, hey, I want to buy this $5 stock. The beginning of that.


Tyler Wood  46:40

I’ve heard you talk about the passage of time as a portfolio manager being a bit strange. And that while you were an institutional money manager, you’re always in a hurry for time to pass. So if it was a particularly bad month or bad quarter, you just want to get it behind you. And if it was a particularly great time, and your performance was was really up, you want to lock that in. I’m curious now that you are managing money for yourself, if your experience of time in the market has has changed, do you do you enjoy trading and investing more now, without that hurried urgency?


Frank Teixeira  47:14

You know, you have a great memory, Tyler, because I always used to say that this business is interesting, we spend our time wishing our days away, you know, when the performance is good, you want to capture that quarter. And when performance is bad, you want it to end, you can enjoy the good times, and you certainly, you know, want to end the bad times. And I think that we need to embrace every day. And it was the P&L aspect of money management that brought me to that conclusion, just thinking about the idea that we want to have these numbers on the books so that we can sell this number to prospective clients, or I need to get this bad quarter over with so I can start another quarter and change my fate. I think I’m thinking a little bit differently about it now that I’m just managing this hedge fund. But you know, the reality is I’m still thinking about it in a similar way, like, I still want to capture good performance. But the difference is I’m only answering to myself right now. And to my partner, that is a difference. And, you know, there is a thought about perhaps managing money for others again. And there’s also a thought of perhaps not doing it and continuing to do what I’m doing now and giving myself a little bit more latitude to take risks that I think is appropriate, even though it might not feel appropriate in any given week or any given month. And being able to move in and out of the market with a little bit more freedom. But, you know, be careful about how you think about freedom. I mean, a variance is a great teacher, right. But it’s also baggage. So you just got to be careful about thinking about the idea that because you’re experienced, you’ve solved it, and you’ve gotten it right. And now it’s easy? Money management is hard. I mean, it just is and it’s been – it’s hard enough managing money for yourself and maybe even friends. And it clearly becomes even harder when you’re managing it for institutions. And you’re also an analyst, you know, trying to straddle the fence of being a portfolio manager, as well as an analyst and being on the line for, quote unquote, market calls or sector calls or stock calls. And how does that impact your decision making? I think we should be spending our time embracing the fortunes that the market is willing to provide us; there’s so much interesting information in the marketplace. I enjoy consuming a lot of research and I spend a lot of time just going through stock chart after stock chart after stock chart. That’s how I was groomed from back in the early days. And I still have those habits today. So as I’m getting older, I’m no longer wishing my days away. Let’s put it that way.


Dave Lundgren  49:49

So as you’re as you’re rifling through charts, Frank, maybe I know back when we were both at Wellington is there’s no chance that either one of us could be on this podcast right now because we weren’t allowed to speak externally about our views and positioning and things like that, but I think we’re both obviously now on the outside. So we can speak a little bit more freely about it. But you know, as comfortable as you as you are speaking about your current views in the market and any ideas that you’re looking at today, I mean, there’s a lot going on, there’s lots of rotation, lots of opportunity, as you said, What strikes you today as most opportunistic, and you know, how much have you positioned to the extent you want to talk about it?


Frank Teixeira  50:23

Well, you know, I think we’re in an interesting kind of window in here where, you know, clearly there have been some changes, right? You have some sort of inflection in interest rates. So you have 10 year yields going up. But I think if you step back, and you look, the major trend is clearly still down. I mean, I think you’re back to or slightly above where rates were on the 10 year prior to the COVID collapse. So basically, that’s really what’s happened. So you don’t while you have a short term, cyclical trend taking place, is that the beginning of a more secular trend? Well, I don’t know if I need to know that I need to know what’s trending now versus what was trending before. So I think now, as opposed to last year, or last year, I had a very, very good year managing money. It was in the third quarter in particular, in the fourth quarter, it became very clear that there was, you know, a very strong kind of momentum advance taking place in growth stocks. This rotation in this transition here, I think calls for a more flexible, more diverse set of portfolio holdings. Like, I don’t really think you have to abandon growth entirely. And I think that there’s a conversation out there that is convinced that this is values day, I’m not even sure I like the conversation about growth versus value. I think both words don’t hold a whole heck of a lot of meaning, especially when you dig down into the components of value and the components of growth. But I will say that, I think you can find plenty of stocks today that fall outside of the quote unquote, “growth baskets,” that fall outside of tech. And you can find plenty of names in the commodity space, whether it be copper stocks, or uranium stocks, or whether it be in the consumer space, like housing stocks or home building products, clearly yep. Yeah, a lot of retailers clearly or Bitcoin as headline news. It’s just, I think, if you’re really, really honest about the market here, you can find so many stocks and so many parts of the market. Again, I think it just adds to the idea that it’s pretty broad. And this is an environment now where if it is indeed transitioning midstream, because I’ve always been of the opinion that you don’t really, really change leadership. And again, this is early teaching, really, from Bob Farrell, that you don’t really, truly change leadership without some kind of intervening market decline. And maybe that market decline is still ahead of us, you know that there’s another correction here that really and truly solidifies a more meaningful leadership change. I don’t think that’s happened yet. So I think a more balanced approach to a portfolio of some industrials, some tax some roads, somehow healthcare, some tech you can buy something in almost every part of the market. Healthcare is an interesting conversation. Because I’ve been having this with Frank in the office, I find it interesting because when you look at health care absolute, the trend of healthcare apps is up, it’s up, right. So you can either approach it as healthcare relative is so bad, I don’t want to own it. Or you can say healthcare is relative is so compressed that I want to buy the best looking healthcare stocks with a relatively coiled oversold condition in the latter camp. Now, that doesn’t mean you need to overweight healthcare, but it certainly doesn’t mean to me – it means you should own some healthcare, particularly the stocks in the group that are still trending and that are outperforming healthcare in general. You can look at the indices now, you’re not going to say the debt coils, right? I mean, they’re up in a way although you can you can almost point to the rustle in the mid cap index as setting up while the NASDAQ and the s&p have pulled away from that breakout points. But we talked about Freeport copper here in the office today. What I like about Freeport copper is that it’s consolidating with a pre established momentum condition off the lows, this pre established momentum and a consolidation that I think is different than saying I want to buy a stock like dish that has a very similar daily setup, but no pre established momentum condition. And that’s kind of where I’m at like I think you can buy stocks that are consolidating and underperforming the short term action of the s&p and the NASDAQ so to speak, but are basically just consolidating a pre established momentum conditions. Hey, if you don’t want to buy stocks that are pulled away, you don’t want t o buy Google here because it’s up a little too much for you. That’s fine. You can look at Freeport copper right in the coil.


Dave Lundgren  54:57

Right and a lot of these again are very … When you  step back to the longer term timeframe, these are very, I mean, it looks very exploded in the short term here. But in the longer term, a lot of these things are still in massive bases. And speaking of epic size bases, I mean, I think the entire time that we were managing the portfolio at Wellington, I don’t think there was a time when we were overweight Europe, I mean, it was just the relative performance was terrible, and it’s still stuck in that base. You see any evidence there? I don’t know, if you’re looking at things globally now that you’re managing your own portfolio, but in any evidence in your mind to say that if you’re is trying to wrestle some leadership here?


Frank Teixeira  55:32

Well, I mean, I think you have a global market environment that is bullishly configured, does it mean that the US is going to give up its mantle to Europe or Asia to emerging markets? I’m not clear on that. But I will say this, right now I’m managing mostly US centric money, like the entire portfolio with the exception of some ADR is mostly in the US, I strongly believe that having a smaller opportunities that is my in my opinion, better than having a larger opportunity. So I think that given that the US is the broadest market in the world, I think if you narrow down your pond, you’re going to find plenty of ideas within that pond to kind of express your view. So I think I’m just more encouraged that other parts of the world are also participating in a bull market, rather than saying, Okay, I need to allocate some money to other parts of the world. Although, if you had that view, there’s very little about what I’m seeing in other parts of the world that would refute doing that.


Dave Lundgren  56:40

Yeah, yeah. Yeah, one of the things I always like to say is that if, like, as an example, if you were broke out of this base, it’s now a 22 year base. If it broke out of the bass, it began trending in continue to underperform that’s just really bullish, because if a chart that looks that good is underperforming, what must the leadership look like? And if that continues to be the US, then so be it? One of the comments you’ve made many times throughout the 90s, as you as you’re managing money, was it the leadership of the day oftentimes had 50% declines? Could you make the case that the Faang stocks, apple, Amazon, and Google and Facebook and then they all went down to the 200 day averages, they had some pretty big declines? Is it conceivable that this is just a sort of a mid cycle correction for those leadership names?


Frank Teixeira  57:22

That’s my take. In fact, I think we might have even spoken about a few weeks ago that it’s very easy to turn bearish, because stocks are underperforming. I think we got to be careful about using the relative line as a reason for wanting to sell stocks that are still trending, right, because a lot of times it can be like they’re oversold in an uptrend, which is exactly what happened with Amazon. Exactly what happened with Google is exactly what happened with Facebook. It happened with all of those names. Now, they’re not leading right now. But they’re certainly not stocks that I would say, okay, those names are a problem here. So that’s what I mean about just kind of using the toolkit that we have at our disposal to say, Hey, is this an opportunity? If Amazon holds here? Is the market really in trouble? Now, again, I like actually buying Amazon right there. Because right at that point, we have as technicians have very clear risk defined loss points. It’s very clear at that point, right. And again, you could buy Amazon now. And you still have a risk point that you can define. But do you want to define it as that risk point? Well, what’s your risk tolerance? And that goes back to the whole conversation of are you managing pain? are you managing risk? Right?


Dave Lundgren  58:36

It’s really interesting. The, you know, again, to your point that the faults that the various providers might have with how they define growth and value, if we just accept their definitions for the moment, and you look at the relative performance of growth versus value. I mean, it was literally a freefall, to your point about not using that as a reason to sell the, in this case, the numerator of that trade, the growth side of the trade, when you just look at what the charts did themselves, all they did was go sideways. So the reason the relative performance tanked the way it did was because value came roaring off the bottom. And it had nothing to do with anything wrong that growth did, it had just everything to do with how aggressive the denominator came off the bottom. So if you signaled based off the relative performance collapse, then you would have missed the bigger picture point that these growth names are still very much intact.


Frank Teixeira  59:21

Yeah, no, that’s exactly right. And I think there’s this reference bias too, right. So you just got to be careful because a reference point, right, so we’re just looking at, hey, that’s a pretty powerful move from this low to this high. But what is the general trend of the entire structure, right? And if the general trend is down? Well, that could be the beginning of that inflection, let’s say in value, if you wanted to just take it at face value, the definition of that move in value is the beginning of something much more prolific than that’s the beginning. It’s certainly not the end. And if it’s the end, then it’s the end of this run and doesn’t really matter from here but at the at the margin, right. I think all decisions about portfolio management – And again, these are lessons that I think you and I have discussed many, many times over the years, a lot of things happen at the margin. But in our minds, we think things happen a lot faster. We think leadership changes much quicker, we think stocks, you know, go up much faster than they do. And it just doesn’t happen; that leadership changes actually take a long, long time, trend changes take a long time to evolve. And then once they evolve, once the trend evolve, all the touch points to the trend are repeated over and over again, I mean, growth has been outperforming for what 15 years now, many relative corrections in there, but all to trend. And then there will be a time when things change. But when things change, we will not be late. We will be late versus the reference point. But we won’t be late versus the ultimate outcome if it matters in the beginning. Yeah, it’s truly the beginning of a real change.


Tyler Wood  1:00:52

Just for point of reference, right? How long did it take for your portfolio to go from levered long to levered short, the crash of 99?


Frank Teixeira  1:01:00

It took a while because I wasn’t running short money in 2000, I was only running short money after a client funded me because I went into pitch my long approach. And he wasn’t interested in the long approach. He was interested in the short approach because I was pretty bearish at the time. And then I got – I looked, you know, I got so so short, like so. So short into that decline that I made a lot of money, but I also got so so short. And then when the market decided it was time to, you know, to inflect, I was much slower than I should have been to inflect. And now again, I still managed to only be down a few percent in 2003. But you know, that was that was after being up, I think 24, 25% in 2002. But my long account was up over 40%. And that tells you that I was working way, way too hard to try to find short opportunities in 2003. Just to go back again, it’s because I internalized I am a great short seller. And I am not that. I am not a great short seller. And I am not a great long buyer either. Only good at both of those things, or even great at both of those things when the market conditions cooperate. And it’s so hard. I’ve seen so many people go through this in their careers where I mean, let’s face it, there sounds so much more intelligent than both. Like when you’re bullish. That’s great. But everybody else is bullish, too. And they’re all making money. So everybody’s like, Yeah, he’s smart. But I’m smart, too. But when you’re bearish, odds are high that you’re one of the few people that are bearish. And you’re right. Now you’ve got a soapbox and a podium to pontificate and, whoo. That’s adrenaline, that’s dopamine all day long, you know.


Dave Lundgren  1:02:57

So Frank, one of the things I can say about you for sure, is that you’re one of the hardest working folks I’ve ever worked with in not just not just in the task at hand, but you’re also multitasking, I can list a bunch of things that you in addition to managing the team at Wellington, and portfolios and things like that, you know, you also are the founder of a sports facility, and you actually have a very successful career coaching girls soccer. So those are, you know, that’s those are very sort of diverse interests, obviously tied to sports, of course, but different skill sets and things like that. So I’m curious if there’s anything that you can identify that kind of crosses over between the various very strong interest in your life in managing portfolios, managing people, things like that, and any crossover lessons that you’ve kind of come to recognize over the years?


Frank Teixeira  1:03:43

Well, what took me to the sports facility business and I can tell you, it’s a lot different than managing money. When you’re managing money. You can you can scale assets. When I’m putting two teams on a soccer field, I can’t put four teams on there, you know, and when I have 10 Gold cards, I have 10 Gold cards, you know, so it’s, I can’t leverage. I can’t leverage the go kart track. I can’t put any more people on there that can go on there. You know, I’m always I’m always thinking I’m always trying to innovate. And I think it’s important that, you know, if there’s young people listening to this podcast, young people in the CMT organization, you know, be passionate about everything that you do, otherwise, don’t do it. And I’m super passionate about sports. I was a pretty darn good soccer player. And I always thought, I’m going to be a professional soccer player. I really did think that I couldn’t believe that somebody would pay me a lot of money to play soccer. And instead what happened is I didn’t become a professional soccer player. I became a soccer coach. I coached girls soccer for 10 years. I have four daughters, I coached all of them at various times in their lives. And I always thought that sports is the gateway to influencing young people and I was fortunate growing up to be in a position where I had good coaches that empowered me that wanted me to be great wanted me to do well didn’t dwell on my failures. And I had great jobs growing up, I was entrusted with, you know, I worked in an Italian deli, I was entrusted with opening and closing the store as a kid in college, believe it or not back in that time making $10 an hour back in the day books, but yeah, big bucks at the time. But again, you know, if you’re dedicated and devoted and chase after it, if you’re aggressive enough, and to follow Ralph Acampora to the subway. And if you’re, you know, thoughtful enough and not afraid to follow Bob Farrell to the elevator, those opportunities aren’t there, unless you’re willing to go after them. That’s why getting knocked down and getting up is, is super important. So I feel like here at Starland, I have an opportunity to influence a lot of kids, I tell them all, you’re here to impact somebody’s life, they come here, they can spend their money anywhere. But when they come here to spend their money that they’re choosing us. And as a result of that, we’re going to provide them with great customer service, great experience, make sure that we made their day because everybody’s trying to escape something, right, whether it be boredom, or you know, mostly, it’s probably boredom. In some cases, it’s something even worse than that, you know. So it’s really, really important to approach everything you do with that kind of passion. And I think that with doing this job, I’m going to tell you one story here only because it’s super funny. But I think it’s also very, it’s also very telling, because whether I’m doing technical analysis, or I’m talking to you guys are, I’m all about docs and ideas. I could bat around ideas all day long, because really what I’m passionate about, I was at a hedge fund conference in the back day. And this was a few years into my ownership at Starland. And I’m in my suit, my tie, and I have a drink in my hand – It was water, it was a snack break. And I’m talking to two other people in the business. And we’re batting around some of the conversation we’re having about stocks, and this other guy walks behind us. And he’s pointing at me. And he’s looking at me very closely. And I’m thinking he’s going to say, Did you speak at that CMT conference down in? You know, did I see you and he says, uh, are you a laser tag guy from Starland? And I look at the two guys I’m talking with, and I’m like, no, and he goes, You look just like the Starland laser tag guy. Like, I go, All right. All right, fine. Yes, that was me. That was me. And he said, and I have to tell you as a point of pride at the moment, because he said, You know what, my eight year old had her birthday party there, and you were in the laser tag arena. And I gotta tell you, you made her day, she’ll never forget. And into it you are. And that’s what I try to sell everybody be into it be and don’t let failure break you, just don’t let it do it. And try to as much as possible really eliminate words like regret and loss and failure. I’m not saying that those are words we shouldn’t use. But I think the more we use them, the harder it is to get up the next time. That’s what I find fulfilling about what I’m doing here. It’s hard work. But I find it super fulfilling that I can mold and impact the lives of young kids the way my coaches molded and impacted me on the soccer field or the way some of my teachers impacted me in the classroom. You know, those early influences have a big impact in I think on who you turn out to be later on. Molding is a process of time you don’t get a mold in one day. You’re molded by piles of experiences over the course of your life.


Tyler Wood  1:09:02

As we come to the end of this podcast, I wanted to ask you, Frank, in what ways did Dave influence your process? I’ve gotten to spend a lot more time with Dave this past year. And obviously he speaks incredibly highly of you as a mentor and a colleague, and you’ve had a profound impact on his own career. But I’ve heard you call him your quant guy, which you want to share with our future billionaires listening to this. In what ways David influenced your process.


Frank Teixeira  1:09:29

That’s so funny because I used my quant guy at a presentation one time and I think it’s the first time they’ve ever been called a quant guy but I think what they brought to the process – and I’m forever grateful and thankful – is that he put some structure around things that I think I knew, things that I think I saw, that’s the one risk, right, is that we think we see things we feel, we think this, we know this. And these are all words that would be more useful if we could quantify whether or not those feelings are justified. And I think what he brought to the process is a lot of structure around stock selection, around relative strength and what’s performing versus what’s not. And he created grids, and a lot of, and there’s a lot of technicians doing this. But I think for my purposes, when I saw Dave’s work, and the work he put into the stock side of thing was something that I couldn’t, you know, do without and that’s why it was my great privilege to actually hire him and work side by side with him. I know for a fact I wouldn’t have been nearly as good without him.


Dave Lundgren  1:10:49

Oh, you’re too kind. I appreciate that. Frank, the pleasure was all mine is a great 10 year run in obviously, the best part of my career. So I know you said regret’s not a good word to be using it. I do tend to agree with you. But I have to say I regret to a point bring up that we we’ve kept you on the phone for a long time. So we can definitely talk a lot more. I’d love to know what it was like managing the sports facility through the COVID crisis. And you know, because you can’t stop yourself out of things. And it’s just a totally different risk management mindset. And so maybe we’ll save all that for your next appearance on Fill the Gap. And anything you want to leave the CMT community with as you’re kind of wrapping up here?


Frank Teixeira  1:11:28

The trend is your friend. I know it’s a cliche, but I always just say to people, that cliches exist for a reason because they’re true. And as the trend is your friend embrace it, billionaires take risk and people who are who are very successful take risk. Now granted, we never hear about the people who took risk and aren’t around, but embrace risk, except that the trend is your friend and continue to evolve your skill set and and approach it with passion. And I think you’ll love doing what I’m doing and what you guys are doing truly forever. That’s there’s a reason a lot of technicians keep practicing well after they’re done in the professional career part of business. The reason we keep doing it.


Dave Lundgren  1:12:09

With that, why don’t we wrap up here and Frank, on behalf of the CMT community, you know, CMT charterholders around the world. Thank you very much for your time today. Very impactful, lots of wisdom there. And we are definitely looking forward to hearing more about what you do in the future. I doubt you’re done managing money for others. So we’ll see how that plays out. But it’s just a real pleasure to have you on the podcast today.


Frank Teixeira  1:12:29

I enjoyed the conversation very much. Thanks for having me.


Tyler Wood  1:12:32

Thank you, Frank. See you next time.


Dave Lundgren  1:12:39

Tyler, why don’t you tell us a little bit about the CMT Americas Symposium, I was able to listen to a couple of sessions. Unfortunately, I was traveling for much of it, but I was able to catch Tony Dwyer’s session at the end, which was excellent. Tell us a little bit about the symposium.


Tyler Wood  1:12:53

That is the best part of hosting virtual conferences during a pandemic. We know everybody’s juggling, but it was a tremendous event over two days, just last week. So we are recording this here on May 5, that was a tremendous effort by the CMT staff and a lot of volunteers to bring buy side PMs, traders, sell side analysts, you know, indicator developers and innovators in our field, to really just do what technicians do best, which is help unpack all of the information that the market provides us and give some real clear takeaways in terms of process as well as what they’re seeing in current markets. We covered a lot of ground over two days; four different segments covering all asset classes, both from the commodities, fixed income and currencies, great fixed strategy and, and cross asset analysis, as well as couple of experts for the digital asset and emerging fields that really gave us a lot to think about in terms of game theory and the application of trend following tools, rules for how you might get involved, get some exposure to what is still a highly volatile asset class, but certainly needs more understanding. And these experts really shared a lot with us. And then obviously, bringing it all back to the equity standpoint, which is such a big part of what the financial industry is focused on here in the US. So it was a great two day event. For anybody who missed it, all of the sessions were recorded, and they’re available at you’ll find the CMT 2021 Americas Summit, right on the website with links to access those recordings, and then they’ll all be in the archives for members as we go forward. That is one of the great benefits I think of this organization and the rich history that it has. We do try to document and archive and record whatever is possible. So for those of you who are new members or thinking about joining, there’s just a treasure trove within our archives for about 50 years of technical research and you can really see the evolution in real time looking through the incredible recordings and articles. So we invite you to take a look at that.


Dave Lundgren  1:14:54

I know that preparing for the for the symposium was always something that keeps you very busy, but you always managed to have multiple balls in the air. More than one thing happening at the CMT Association. We had other events going on and other things wrapping up as well. So tell us a little bit else about what was going on in the organization.


Tyler Wood  1:15:12

Absolutely. We try to wear multiple hats. And so just as the Americas Summit was kicking off, we were wrapping up the first CMT investment challenge. One of the topics that we’ve discussed repeatedly on Fill the Gap is just the commitment that the CMT has to the education of young students, both in undergraduate and graduate programs. So out of our Mumbai office, my colleague, Joel Pannikot, and others helped coordinate the first investment challenge and trading competition, which went extremely well. Students learned a lot during the process. And I’m happy to report that all of our top three winners: Manthan Gehlot, Rittick Poddar and Ameya Khandekar, they all returned positive returns on their portfolios at a time where the Nifty 200 in India was down over 3%. So clearly, the application of these tools is really helping these students understand how you can look for securities that are trending and outperforming, and a lot of really interesting takeaways for the students and for the faculty who were helping advise them in terms of the application and a real practicum study. So that was the first of many great competitions all across India. And we’re looking to expand that internationally. And we’ll have a lot more to share about that in the months ahead. The last thing I wanted to mention was just that for all of those students and anybody listening to Fill the Gap, we are coming up to the registration deadline for the CMT exams, which will be held June 3 through the 13th. Still several weeks left to study and prepare for those exams. But your registration deadline is coming right around the corner on May 13. You’ll find out a lot more information about remote proctoring and curriculum and what is tested at each level by visiting CMT Association dot org.


Dave Lundgren  1:17:02

As always, Tyler, thank you very much for the update. And I want to certainly once again, say thanks for everything you’re doing for the organization. And thank you for all your help with this podcast. That would not be possible without you. I really truly appreciate it. Both as a colleague and a friend. I really appreciate it.


Tyler Wood  1:17:17

Dave, this is the best job I’ve ever had. And I imagine for those listening, being a fly on the wall to hear you and Frank talking through how you navigate these markets. It’s an incredible honor. So thank you for letting me be a part of it.


Dave Lundgren  1:17:30

You bet and thank you again, Tyler. See you soon.


Tyler Wood  1:17:38

Fill the Gap is brought to you with support from Optuma. In addition to candidate study of the official CMT curriculum, Optuma provides a full video course on all of the material that candidates need to know, for each level of the CMT exams. Each course is broken up into modules, ranging from 15 to 45 minutes, depending on the complexity and length of the topics being covered. Learn more at – Hey, Dave, can you tell our listeners a little bit about the resources that go along with this podcast? Absolutely.


Dave Lundgren  1:18:17

So when we host a guest, of course many things will come up throughout the conversation will be charts, a book that they’ve read, or a perhaps a book, they’ve written some of their research, what have you and so we just want to make sure that our listeners know that at the end of each podcast, or at the end of each episode, there will be links to the various resources.


Tyler Wood  1:18:36

And for those of you with feedback to Fill the Gap podcast, there are speakers that you want to have us interview, suggested topics and themes that we need to be covering. Please send your feedback to podcast at You’ll find all those resource links available at under the Fill the Gap podcast.


Frank Teixeira, CMT, CFA - 2023

Frank Teixeira, CMT, CFA

Frank Teixeira served as a Partner, Portfolio Manager, and Director of Technical Research for Wellington Management in Boston, Massachusetts, for more than 20 years. After retiring from Wellington in 2018, Frank continued his investing passion as the managing partner...