Fill the Gap Episode Ten, with Special Guest Larry Berman, CMT, CFA


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Lowry’s 90% Down Days

Chart Pack

Thinking in Bets book by Annie Duke

Bullish Engulfing Pattern

Larry Berman, CMT, CFA: ETF Capital Management

For Advisors: Quintessence Wealth



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.

Tyler Wood  01:11

Fill 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


Tyler Wood  01:51

Hey, Dave, Good morning. Welcome to Episode 10 of Fill the Gap. How are you doing, my friend?


Dave Lundgren  01:56

I’m doing well, Tyler. As always, it’s great to see you.


Tyler Wood  02:00

Fantastic. I’m really excited for this episode; quite distinguished from the rest of our series here in season one. The investment industry has broadly accepted the trend following style as a rigorous investment strategy, which has shown merit through multiple market cycles, and obviously a lot of folks smarter than I have spilled a lot of ink writing tomes of academic research about the persistent anomaly of momentum, buying strength, buying breakouts, momentum, trading, all those different ways to describe the style. And our listeners know that you yourself have applied these trend following concepts to a successful career in money management for more than 30 years. But with today’s episode, it seems our guest, Larry Berman has shed some light on using technical analysis is what can be categorized as a mean reversion methodology. Can you tell us your thoughts on the applicability of technical analysis for value investors? And what were the key lessons they can glean from this interview?


Dave Lundgren  02:55

Yeah, absolutely. And I think you’ve picked up on exactly the most sort of stark contrast between all the other episodes and this one. And for me, you know, the technical toolkit is vast, you can back test many of the mean reversion, sort of, you know, oscillator type indicators in the toolkit, and many of them work very well. So it’s not a question of which tools work versus which tools don’t work. It’s more about which tools fit your personality. And that’s exactly what our guest talks about extensively in this – in this discussion. But me when I was managing – when I was an analyst, I should say, over at Fidelity, where they had a number of deep value managers, they didn’t really get much value from the traditional trend following momentum type analysis. So at that point, you know, I took it upon myself to develop some longer term mean reversion tools that helped them identify stocks that are very extended from trend and very washed out and likely to turn and things like that, that they get that overlay with their value analysis. That’s what Larry is doing with his work as well, where he’s looking at oversold conditions that are right for mean reversion. He’s done a lot of back testing on it and things like that. So I think it’s, it’s a, it’s a crucial aspect of technical analysis again, and Larry talks about the idea that it’s not about what works versus doesn’t work. It’s about making sure that what you’re doing fits your personality and value. From a fundamental standpoint, Larry is a value minded investor. So it makes sense that as a – as a technician, he’s more of a mean reverting whereas I’m more of a growth oriented investor, which makes sense that I would be more of a momentum trend following breakout type investor.


Tyler Wood  04:26

Yeah, I think Larry did an incredible job just showing in detail, how you use those tools for security selection and managing a portfolio. Obviously, it’s an awesome pleasure to be a part of Fill the Gap and hearing this internal debate about buy low and sell high versus buying high and sell higher. I think my favorite quote from Larry is that there is no right or wrong in what we do. It’s just how you do it, and results are results. Couldn’t be more on the point, Dave, let’s dive right in with our guest, Larry Berman, CMT, CFA, here on episode 10 of Fill the Gap.


Dave Lundgren  05:07

Welcome to Episode 10 of Fill the Gap, the official podcast of the CMT Association. This month we are joined by Larry Berman, co founder, partner and CIO of ETF Capital Management in Ontario, Canada. In his former role at CIBC, Larry was a top ranked technical and quantitative strategist – prior to that Larry and I actually overlapped a bit for a couple of years, I guess, at technical data in Boston. I mean, I could go on to this. Our guest’s background is rather prolific: Larry’s the past president of both the Canadian Society of Technical Analysts, as well as our very own CMT Association. So thank you for that and for your contributions there. Larry, also a former vice president of the International Federation of Technical Analysts, so lots of contributions to our industry from Larry which again, we – we very much appreciate. Of course, it would be a major failure on my part, if I did not mention that Larry’s actually a bit of a household name in Canada. Some have referred to him as the Jim Cramer of the North. Of course, we in the technical community would refer to Jim Cramer as the Larry Berman of the United States. Larry hosts a featured program each week on Bloomberg BNN network called Berman’s Call where he covers market trends and fields incoming questions from thousands of viewers across Canada. Berman’s Call is actually one of the most popular shows on the on that network. So congrats for that success, Larry, and truly welcome to Episode 10 of Fill the Gap. Glad to have you here.


Larry Berman  06:30

Yeah, thanks very much, David. I’m really excited to get into it today for sure.


Dave Lundgren  06:35

Yeah, it’s a conversation Tyler and I have been really looking forward to having with you. So as we typically do, I think it’s really interesting to learn a bit about our guests first, before we kind of dive into the meat of the subject matter, maybe give us a background on how you got into the business. And in particular, what got you leaning towards technicals eventually, and then you have a bit of a different take on technicals today. So obviously, your approach has morphed over the years. And so we’d really be interested to learn more about how you use technicals today. So let’s start with your background, how you got into technicals and then how you kind of got to where you are technically today?


Larry Berman  07:11

Well I started out in the investment industry selling mutual funds, like right – right out of university, and while I was in university, I had a part time job as an assistant to an advisor helping them just with, you know, business development kind of stuff. So, you know, I knew when I was in school, that’s kind of what I wanted to do. I was going through university to be an accountant. I was sitting in auditing class one day literally ripping my hair out saying I can’t, I – this is so not me, you know, and I think it was, it was partly the professor who was drier than toast and I just couldn’t imagine that but I knew, you know, I love numbers. I was always great in math when you look at my grades and in high school I was you know, A plus plus in math, 90 plus, 95 plus English interesting story. So in Canada, we had 13 grades back then. So in grade 13 English, I got 100 which is really amazing. 45 the first time, 55 the second.


Larry Berman  08:20

You can see where my skill set is and isn’t on the ABCs and one two – it’s on the 123s, so you know accounting was natural for me. So summer job in between doing my undergrad degree in economics and a Master’s I got a job at a financial planning firm and you know, for me it was a summer job. I didn’t tell him that but that was my plan and I was going to go back and do my MBA. I don’t really have enough money to do that but that that was kind of the plan. And so I had the very good fortune to meet a guy named Bob French. Bob was a former CBOT floor trader trading bonds in Chicago and you know the the classic story that you hear he pulls out his bottom drawer, he’s got the, the chart book, and we start looking at point and figure stuff. And you know, he got me into looking. So having been trained in economics as an undergrad and really thinking fundamentally, I saw the pictures and while the one two threes made a lot of sense, the picture’s worth 1000 words. And that’s what I didn’t have. The words didn’t come easy to me. So I don’t know what it was. But that was kind of the link to me. And what they convinced me to do was they said, Hey, you know, Hey, kid, you don’t have to go back and do your MBA, we can pay you to be an advisor with us, we pay you for a year you can build up your book, and you can learn from from our guys here. And you can do a CFA, you don’t have to do an MBA, you can actually do a specialty in fundamentals if that’s what you want to do. And so I went along that path and said okay, let me sign up for you know the fundamental side of things and I didn’t have the money to go to school anyway so, you know, Bob French was was an important first look at the charts for me. But ultimately after a year I had a $1.1 million in my book. And at that point I had I met my future wife now of 31 years, and she basically, you know, wanted to buy into – she’s a veterinarian, one – and buy into a vet practice I couldn’t afford with her buying into something that wasn’t going to have a steady income for me not to have a steady income. So I ended up after we got married taking a back office job in a brokerage firm called Burns Fry. It’s now Nesbitt Burns, owned by Bank of Canada. And then I worked my way on onto the investment side and you know, obviously lots of things in between but at Burns Fry. First thing I did was seek out the technical analyst. So who’s the technical analyst? It was this crazy brilliant guy named Keith Edwards. And he was involved with the MTA and got me involved with the CSTA. I started writing the newsletter, I started getting involved in doing conferences and networking, and lo and behold, this CMT thing was was thrown in front of me. So I, I actually dropped the idea of doing the CFA and I said, you know, I’m going to do this CMT thing. And you know, as fate would have it, my wife and I got pregnant on our honeymoon. Actually, it was on our wedding night – might have been the week before, I’m not sure, but, but really quickly, and so we had kids right away, and I didn’t have a lot of spare time, and I couldn’t do both. So I chose to do the CMT over the CFA, and many years later when I got a job as a strategist and I had CFA level one, you know, my boss said, Why don’t you finish that up? And then then I went back and took the CFA afterwards, but I was – so I was actually the first person in Canada that I’m aware of, that had both the CMT and a CFA. So I’ve always had a combination of fundamentals and technicals and, and it was just kind of the way I started and the way I developed.


Dave Lundgren  12:17

Yeah, I definitely want to dig into how you combine the two. I know Greg Johnson over Piper Jaffray is – or now Piper Sandler I guess. Also past president of the CMT Association, he likes to say that the CFA got me my job and the CMT has helped me keep my job, so I think that really underscores the difference between the two.


Larry Berman  12:34

When you – when young kids come to me now and asked me what what should I do first I said, Listen, you know the fundamentals matter, they move markets, but what the CFAs generally don’t know is the behavioral side of things. And that kind of gives you an edge.


Dave Lundgren  12:48

Right exactly. Most of our our guests that we’ve had on so far have been more of a traditional trend following momentum type technical analyst or Portfolio Manager what have you and you know, I think this is where you really differ and I’d be curious to know because right now you’re more of a mean reversion. So for for those that aren’t really too familiar with the difference between trend following and mean reversion I think if you think about fundamental investing, you can either be a growth investor or value investor so it’s basically you know, buying on the hopes of what happens in the future versus which would be growth in value investing is buying because it’s cheap, hoping to sell it more expensively in the future. That’s how we think about the world on the fundamental side. On the technical side, we have very comparable styles of investing – we call them momentum investing, which would be the comparable to growth investing, and then we have what what Larry does, which is more mean reversion, which is buying something that’s below its average on the expectation that it’s going to revert back to the mean. So it’s very similar in concept to value investing on the fundamental side. And so as I was saying earlier, you’re – I think you’re the first practitioner of technicals on the podcast, who, who would really fit that mold of being more of a – of a mean reversion? Or maybe, you know, fundamentally, you might even be a value biased investor. So did you start as a value oriented or mean reversion oriented technician? Or did you kind of morph towards that over the years?


Larry Berman  14:10

You know, it’s in our DNA, we learn oscillators, right? Yeah. So I always liked the idea of buying cheap and selling fear – buy low, sell high. That was all that’s in my DNA. And it’s probably because I like to go to Walmart and buy the Canada tuna for two bucks instead of the regular supermarket store. Where the exact same can of tuna made in the exact same factory within a week is $3. Yeah, so that’s just the way I think and, and having been schooled in fundamentals intrinsic value, and, you know, I like a bargain. So so that’s how I think it’s in my DNA. When testing systems. We know that momentum is a very valid strategy, but I have I have trouble buying high and selling higher, it just doesn’t suit my eye. In fact, that whole Robinhood phenomenon and Reddit, the Reddit community and what they did to two big hedge funds is a staggering, staggering new factor in markets that I’ve yet to figure out. But if you’re a momentum guy, you probably love it trailing your stops up, you know, but but it doesn’t doesn’t suit the mean reversion crowd at all. It’s overbought on AMC. Okay, we’ll go back to movies some day, but like, it’s worth six bucks, right? And so what these guys are doing today with AMC is completely unmistakably ridiculous. But don’t go tell everybody that you got a big short position on, and you’re a big wall street hedge fund because they’re coming for you. Right? You know, as as an avid golfer standing over the golf ball. Yeah, you have to have that, that swing thought in your head that you can execute? That’s a great analogy. Yeah, yeah. And of all the conferences I’ve been to over the years, and you hear momentum guys talk and every oscillating guys, I’ve always taken a bit, you know, like mosaic a bit from this guy, but from the Skype event doing some of my own and it just kind of morphs over time into what your style is. There’s, there’s no right or wrong and what we do, it’s, it’s how you do it, right, and results are results.


Dave Lundgren  16:22

You know, I really want to make sure that our listeners absorb what Larry is really bringing to light here. And the idea is that there are many ways that you can make money in the markets, either technically or fundamentally. So it’s not that we’re lacking four ways to make money, it’s more important that we attach ourselves to a strategy that really resonates with us, because no strategy works all the time. And when it doesn’t work, that’s when you’re really tested. And you need to really see it through and stick with that strategy. You can’t be just jumping back and forth. And so you know, the idea that Larry, you you’ve chosen to be more of a mean reversion investor, I’m sure at times, it looks like it’s the right way to do it. And other times, it looks like it’s not so much the right way to do it. I can say the same for my own track record over time. So I guess what I would ask you is, you know, you know, it’s really important for you, as an investor, to have that mental preparedness for when things are going well. And when they’re not going well. How have you over the years helped, I guess, coach your clients through those periods when things don’t work given that you’re more of a mean reversion value type investor? And do you find that there are tools that other investors can really lean on to help their clients better understand and build expectations for these sort of drawdowns or poor performance periods?


Larry Berman  17:35

Yeah, so so – sleep at night portfolios is what we talk about, and that’s Markowitz sharp that’s, that’s risk adjusted returns and, and so when you’re paying for protection, if you’re buying a put, if you’re, if you’re moving from stocks to bonds, if you’re doing something that isn’t, say being all equities. Now we know because of the behavioral side of what we learn from Kahneman and Tversky, people can’t handle all an all equity portfolio. So everyone needs balance. So how do you deliver that balance? And so we tell people, when markets sell off, we like to be a buyer when they rally up and get expensive, we like to be a seller, and then we customize our portfolios around kind of that that narrative market like this that’s in a melt up mode where valuations are absolutely ridiculous. Great for momentum, right? Yeah, it suits that style. You know, generally it doesn’t work when you’re a mean reverting guy, right? Right. You get overvalued, I created a toolbox 20 factor model that takes into account fundamentals and technicals. It’s actually part of what I based my CMT paper on, you know, back back in the 1995, I think it was, when I submitted my first version of my CMT paper, it was about a model on the fixed income side. But the principles applied where I looked at fundamentals and technicals of the bond market, married them together to come out with a diffusion index. So that’s effectively what I’ve created now for equity and global macro are have 20 factors for them or valuation. So as you would think of, you know, forward P’s price to sale, enterprise value D, but the equity risk premium, and then there’s four business cycle models, what credit spreads are doing, what the yield curve is telling us, what inflation indicators are telling us, and what growth is telling us. So business cycle related, and then there’s 12 technical models that cover breadth, sentiment, you know, you name it, and so that that’s my guideposts that when markets are expensive and overbought, I want to be more defensive, I want to have whatever it is that’s going to give me more defense and that could be for some clients put protection, it could be an option strategy, that that buffer as my my beta risk, or it could be traditional stocks and bonds, the problem now with the 60/40 portfolio is interest rates are so low, that don’t work anymore. Right? It’s getting harder to do this. Because the traditional way that you would protect, there’s no alternative, right, Tina, you got to be in equities. And that’s the narrative. And the bubble keeps blowing because the rocket scientist we have at our central banks in the world thinks that they need to print money. You know, I said something about a decade ago at an MTA conference that I won’t repeat today. But I basically said we’re in a difficult situation, right? We’re in a position where we’re relying on easy money to keep the party going. Right. So this was shortly after the great financial crisis and QE came in, and that could work for decades more. Right? Right. Maybe MMT is the future, maybe they just print money like that, to me, that makes me absolutely insane, because the reason for growth is not bullish. It’s not fundamentally driven demand. It’s artificially created stimulus.


Tyler Wood  21:14

If you don’t mind. Can we put you under the microscope for a second about when things are selling off? When when markets are you know, thrashed? Right, we’ve all talked about not catching falling knives that we want to wait for confirmation for the resumption of an uptrend. What is your process look like? before, during and after a market bottom?


Larry Berman  21:35

Okay, so before COVID the last big bottom was a week after Jerome Powell said, QE is on autopilot, and they just raised rates, you know, December 18, I think it was. I remember I was in Florida at the time talking to my trading desk, Christmas Eve. And Trump’s out there tweeting that, you know, he’s tariff man and there’s no bid, right? That’s the market I love to buy into. Because people are are selling not not because they believe in value, or whatever they’re selling, just because the the emotional quotient is overwhelming, right? Like, just get me out. And when, when that’s combined with an important technical area, you know, we know from studying market volatility, certain types of corrections, only go so far before you get some mean reversions. So we do a lot of studying about history and, and when those acute points, but I don’t know, is it tomorrow, the next day, the next day, the next day, if I’m negative, I know at some point, I got to get back to my target. So that target is 60/40 or 80/20. I know that in that environment, it’s a great opportunity to get back to my benchmark. What happens in the following days, we’ll see. Like there was an example of something as in 2015, was it I can’t remember but it was around the time when we were were again worried about something with China. And it was on a Friday anyways, my models were telling me get back to 6040. Well, that Monday, we you know, there were some Chinese FX things and we gapped down 7% on the doubt, then again, August, Monday, had I known, I would have waited one day, but I rebalanced on a Friday. So the answer is we can’t know anybody in our community or any community, frankly, that tells you they know, like run. We don’t know. It’s a probability based decision. Kahneman and Tversky tell us Prospect Theory is all about evaluating the probability of making a decision today knowing the information we have and if we can at all get that emotional part out of it and make it a statistically rigorous decision. And in the long run that’s going to work for us so so that’s really kind of my approach in mean reversion. We don’t know when that bottom is, we do know that if you miss the best 10 days, you’re in trouble, right? Well, those best 10 days almost always follow the worst 10 days. Right, right. Right, you get those tweezer bottoms right and so we know from behavioral and you know sell when there’s blood in the streets and well that’s not the right thing to do because they’re selling well then you’re gonna get that reversal. Again, the day after the, the great work that Lowery’s has done, Paul Desmond and the people before him on the 90% days, right we we know all that we study all that and all that factors into to when you know, when do you do it? A lot. A lot of people are comfortable catching falling knives. I don’t look at it as a falling knife I look at as a probability of risk and return in the future. I don’t know when but now some people might want to wait for that bullish engulfing pattern. I like to scale into it. It’s just my style.


Dave Lundgren  24:58

Yeah, that’s actually that’s the best. So I guess the final point is that you the way you choose to do it is rather than just jumping in wholesale, it’s to scale – and but I think what Tyler might have been trying to get at was again on on the fundamental side with value investing that the risk is that you buy something that’s cheap, and it’s cheap because it’s supposed to be, and you end up with a what’s referred to as just a falling or value trap, I should say. So the comparable in technical community would be to buy an oversold condition that’s in a downtrend and you know, fund valuations don’t matter until the fundamentals change, and it can unlock that that valuation that’s inherent in that opportunity. The same is true on the technical side whereas oversold doesn’t really matter until you can actually get paid for having bought it vis a vis an uptrend. So there are a lot of tools that we can bring to bear in determining between uptrend and downtrend and distinguishing between an oversold uptrend and an oversold downtrend. So I’d be curious if in your work, have you done that type of a back test to say that, you know, oversold conditions in a downtrend aren’t our possible you know, quote unquote, value trap, relative strength.


Larry Berman  25:59

You know, I when in 1994, I had the very good fortune of doing what was called the MTA internship program. It doesn’t exist today, unfortunately. But but back then it was it was wonderful. I got to spend the summer in New York and I spent, you know, two or three days or a week with all the top guys yeah, Alan Shaw’s chart room I was updating his point and figures for a week and I remember him bringing in a institutional crowd for lunch and he had this big TV monitor and he put his hand over the the symbol right what ticker it was and you know, uptrend relative strength positive, we like it. Right? So when relative strength is positive, I like to buy the pullback in what is a bigger term trend. So again, it’s it’s it’s tell you look at it, yes. And so that relative strength, infusion into that thinking can avoid some of the value traps. Now, eventually, something that was good, it goes bad, right. And this is where I think the fundamental side helps, because what we do in our work now today, which was different than 10 years ago, which is different than 20 years ago, and thank you for the computing power that we have today, we can do a fundamental screen for quality or an investment factor that we like, and and so we can take the Russell 1000 and get rid of the bottom half of fundamentals, fundamentally weak factors that we think are going to underperform. And then take those top half and take – trade the best 100 names equally weighted market weight, like whatever, like that could be our portfolio base. And then like, you know, I, I’m a trader, I have a traders hat on I something gets cheap I buy it gets expensive, I sell it, and it becomes you know that way. So what’s your benchmark? Well, if if your benchmark’s the s&p 500, and you’re bullish on Apple, you got to have seven or 8% of it, if you want to outperform you look at a lot of indexes. TSX was a great example. You know, in the dot-com bubble where Nortel became 35% of the index. There was no portfolio manager in Canada that could be the dumb index, because if you put 35% in one position, the regulators would shoot you in the head right upon trial. And so it’s harder to beat the s&p 500! Warren Buffett says that I’m just gonna buy the index because 10 stocks are 30 odd percent right and most people are like Hey, listen, if you’re running concentrated portfolios of 20 names, then 5% in one name is a comfortable thing for you. For me it’s not it’s not wrong or right it’s just me.


Dave Lundgren  28:43

So I like to interesting – what’s interesting with the benchmark this year and the fact that it’s up so much and everybody’s struggling to keep pace with it is if you actually dissect the returns you find that I think it’s the top half of the contribution to this year’s returns comes from the top 20 largest companies and if you actually look at the momentum ranks of those top 20 companies they’re not even high momentum right so just so big that they push the index around so if you’re a momentum investor trying to buy top performing relative performance of winners there’s a good chance you don’t even own the things that are driving the benchmark.


Larry Berman  29:17

Well that’s why Apple got into the Dow, right, because it was so big it couldn’t get put in until it’s split. Right right right. And why is why is UnitedHealth the most important company in the Dow were you look at another one that might be you know a smaller weight of you know that so that the top stock in the Dow to the bottom of stock in the Dow it’s about a ratio of eight eight to one or so yeah. $50 400 and change right so and price weighted, it’s not even. That’s right It’s It’s so it’s a it’s a stupid index, but it’s the largest companies so why is one because it has $1 it hasn’t split yet worth more than another one in an index. So so we know what – What’s your benchmark? What are you trying to beat? It’s harder and harder to beat these market cap weighted indexes.


Dave Lundgren  30:06

I can clearly envision a scenario where you would be selling into strength and it would probably have much to do with valuation it’s kind of achieved your – what you consider to be fair valuation. But what about on the other side? Because the other reason that you would sell something is because you’ve determined that you’re wrong. Do you lean on technicals and trend itself to say okay, I recognize that that the stock is cheap or this ETF i think is good you focus more on that this condition is cheap, fundamentally, but it’s now broken trend and it’s now in a downtrend. Is that something you would respond to what do you lean more on other tools to manage the downside risk for the portfolio?


Larry Berman  30:40

Well so so let’s look at Chinese internet stocks right now okay, Kweb is a great ETF and green shares and I’ve been using them for years and I really liked their their stuff I did a feature on BNN January February where the chart was parabolic for months. I remember Yeah, and I said you know I liked the sector but you know 30, 40% cheaper right now no like you got it well this is an avoid and I you know, there were some hate hate mail that comes when you you say something like that and you’re a public figure and so I you know, I kind of dismissed that but those momentum guys love their momentum. And it just got crazy expensive for me so but on this recent pullback into everybody says Cramer. China’s not investable. Right. And and you see you hear that narrative now. To me, that’s sniffing blood in the streets, right? When is that all priced in? Well, we don’t know until hindsight confirms the bottom. So we could wait for that bottom to form over six or 12 months or three days? We don’t know. But right now, to me from a value perspective, I like it. I also like to see a catalyst. Right. So what is the positive catalyst? So is there a positive catalyst to be really bullish on that? Isn’t China’s I hate to tell Americans is but they’re going to be the biggest economy in the world one day. Already is already so maybe it depends how you measure it. It already is for sure. So yeah, you know, do you own that today? And how big should it be? So right now I’ve probably got about one and a half, 2% position in Chinese internet. And I’ve got a 2% position in Chinese a shares who KBA, China how big should that be? So I’m market way China, right at this point. And so I think given valuation and everything else, that’s that’s probably fair. I’m not overweight. I don’t have the catalyst at this point to want to be overweight, but I didn’t own it here. I own it here. On and I traded around, right, I trim it, I add, I trim my add, so so those that’s the kind of style that that that I would do, you know, in the portfolios. And again,


Dave Lundgren  32:55

From here, let’s let’s say so that advocate web is, as of yesterday’s clothes was like full color $50. Or as free text editor would say $50. Not $50. At all in our video, speak properly, please, thank you. So it’s at $50. It’s in a downtrend on the daily chart, the 200 day moving average is declining. So we’ve checked a lot of boxes for further weakness until we can start checking boxes in the other direction. So from here, if it goes to new lows, is that something you just continue to add to? Or are you more mindful of from here? I want to see repair.


Larry Berman  33:28

Well look at perspective. So so that is the last year and a half. But but right get a five year, right? Look, look at a longer picture. You could draw a trend line up off the low and say, well, we had this little bubble and we’ve now reverted back to the mean, and you’ll like it fundamentally long term, which again, there are a lot of uncertainties is all that in the market today? Do we know although all the things I mean every other night now we’re hearing something out of China where they want to regulate and everyone should have the same so I’m not not sure all the news is in yet but the biggest economy in the world soon to be that I want to be a player there all kinds of regulatory issues, the you know, are they going to allow those to trade? So I checked with the product provider? And sure enough, you know, if if you can own those CDRs they’re going to swap them into the the Chinese versions of them and Are you okay with that? I’m not I’m not getting political here. I’m looking at this as the big economy in the world and and then I look at the equivalents in the US economy and what are those trading for? And as our relative value guy, I see value there. When are we going to realize that value? I don’t know the answer to that question today. But if that becomes apparent, and I start to see this thing start to work, then then I probably add to it.


Tyler Wood  34:51

Larry, you brought up a really important element about time horizon for your trades for your positions within your portfolios. How long are you holding?


Larry Berman  34:59

Weeks to quarters is kind of the sweet spot for us. And you don’t know, I look at relative gains relative performance right relatives are important. So you know if the relative trend of what I’m owning over a year is up 15%. So the the alpha relative to say the s&p 500. So the slope of that relative strength line on a linear regression is 15%. And now we’ve we’ve had a dip below trend, but I still like the trend. So I’ve added whether it’s two weeks or three months or six months before, it’s back to the top end of that relative trend channel. That’s where I’m looking at and trim. Got it, right. So I look at absolute risk and return. And then I look at relative risk and return. And sometimes I put on a trade two weeks ago, in uranium stocks and chemical a big uranium name here in Canada, where it literally within two weeks, it went from oversold in a bull trend overbought in a bull trend. And so I went from having a one and a half percent position down to having a 75 basis point position in that name. And it’s getting more overbought. And it had an outside where it you know, it threw up a little bit of a doji kind of thing. And then today a bit of a follow through. So, you know, I’m trimming into that. And I’ll keep trimming, and then I’ll come back. And if I still like it, I add to it or I get out, right. So we fundamentally screened, we like the story. We think the green economy is a real thing. And the guys in Texas in Calgary need to get on board with that and understand the future. But again, I won’t get too political. But the greening of the world, to me necessitates the biggest single cleanest energy source. And that’s, that’s nuclear, not in my backyard, by the way, but but nuclear.


Dave Lundgren  36:56

There’s a lot to be said, for the importance of combining these two powerful thematic these powerful investment themes with all kinds of growth behind them with technical trends structure, if you can find those two things. I think that’s kind of Nirvana. But before before we move on, I wanted to I wanted to just maybe Tyler, we can actually feature these charts in the podcast notes, because I think this just can’t be overstated how important this is and why we did a great job bringing it all to life for us. But if you look at the Kweb, and I mentioned how it’s in a downtrend on the daily chart, this is a super important with the way most people would define a trend is to look at the slope at the 200 day average and you have a downtrend, you have a series of lower lows, all of which is true on the daily chart. That is a downtrend but if you do as Larry advises is that you step back and you look at MIT, perhaps that quarterly chart and conduct that same exact analysis on a quarterly chart, the K web came right down to long term trend support. So it looks terrible on the daily chart. But it looks great on the quarterly that by the way, is not a recommendation. We’ll put disclosures around the podcast, though. But the idea is that, in order to test support on a quarterly chart, you pretty much have to blow up the daily chart. And we’ve done that. So if I was right about this being the right spot to sniff around because of fundamental evaluation factors coming together from a technical perspective, it’s right on quarterly trend support. So that’s that’s an important takeaway, I think, for this discussion.


Larry Berman  38:07

You know, you’re bearish. So your 60/40 goes to 40/60 or, or 30/70, whatever your parameters are, right for that mandate you have. So what I would say here, because we’re back at that long term trend, go to market weight, doesn’t – there’s no proof we should be overweight yet. But to go to market weight, and whatever that is for your basket of goods, right that it’s in your portfolio.


Tyler Wood  38:32

The follow on question I wanted to ask you about timeframes is how you declare the objective for the funds. And we talked a little bit about benchmarks and just how wonky indices are and trying to benchmark your fund to an index is kind of a fool’s errand at times. How do you speak to clients about the objective of your process and the funds that you run.


Larry Berman  38:56

You know it that that’s the behavior understand Mike Pompian wrote a great book on the behavioral aspects of dealing with clients and different mandates. And so the discussion with with a client and I don’t do a lot of these these days, we kind of have our team and what we learned over the years, so for me to keep my focus on markets and not be influenced by client anxiety that we separate what we do on the investment side with the client relationship. And so the guys who have the relationship and the what we call KYC, know your client know your product. So I’m the know your product guy. We have our know our client guy, so they they handle, they make sure the financial plan is done. They make sure that that client at 60 is going to have enough money at 95. Right, the portfolio is constructed so that that client meets their goal has nothing to do with it. What I think about the world that has nothing to do with it. But I think about risk tomorrow, the Fed meeting next week or so and so forth. It has everything to do. It’s about that client. And that’s really why I you know, I left the street so to speak to hang up my own shingle 15 years ago is because, you know, I found that there were so many conflicts of interest. I found that compliance departments just didn’t understand risk. They had these boxes, you know, and listen, anybody who knows me knows I don’t fit in a box, you know,


Tyler Wood  40:36

pretty big box with a very –


Larry Berman  40:39

Right, it’s a smaller box than it used to be, you know, I I’m not quite half, but I’ve had a big retracement, last time I weighed 182 pounds, I think I was 12 years old Tyler. My whole adult life my trading weight was to 10 when I would call myself fit, and probably 40 pushing to 45 when I would be overbought, overweight. And that was my trading range.


Dave Lundgren  41:10

You’re also known in terms of your big contributions to the community on the behavioral side as well. We’ve talked about it a bit thus far, you play a big role in in driving the content in the CMT Association with respect to behavioral investing in behavioral biases and the like. I know that one of the one of the tools that we can bring to bear from a, I guess a control perspective on behavioral biases is artificial intelligence. Can you talk to us a little bit about your thoughts there and anything that you’re working on as it relates to AI in order to curb investor biases?


Larry Berman  41:42

Yeah, I mean, the the origin of trying to be systematic, right, Perry Kaufman’s tremendous number of books, there was no AI there, but it’s the reinforcement learning. So you know, you you put together a system, and then you look at the results. And you see that, well, it’s very profitable, but all the profit really came from one trade. So that’s not a good system, right? And you kind of look through that. So – So AI is kind of a smarter, faster version of that. And, and when you when you think about what a big blue can do today, you know, you can read 200 million pages of text in a minute, or some some insane number like that. So I was doing a presentation, got to be five years ago now ish. And I went to a financial advisor out in Edmonton, and they had put together a client dinner and bring a friend as a prospect. And so I’m talking about our style and strategy and how systematic and relative strength and anyways, afterwards this guy calls me up. And he says, you know, Larry, I run the artificial intelligence lab for the University of Alberta. And we have one of the top schools in AI and in the world. And I’m like, tell me more. And we had this great conversation he said, how you think about markets and risk and return terminology fits into the zero and one world we’re very well and we want to do a project with someone in capital markets where we can take our reinforcement learning and everything else and and take your IP and kind of see what comes out. said we had one of our professors here, solve the game of straight up Texas Hold’em. I said Well, okay, I’m an avid poker player. I love Annie Duke’s new book, by the way, like she’s put out good stuff and, and thinking and that’s and that’s, that’s me, I think that’s a great book. And I actually tried to get Annie on my show and with COVID, and everything kind of didn’t work out. So thinking in bets. And so how do you solve the game of Texas Hold’em? Well, you couldn’t do it 15 or 20 years ago, you didn’t have the computing power, but they pay – they played the equivalent of 4 million hands of Texas Hold’em per minute, for four months. So you can imagine. And so you know, what should the bet size be? Right? And so how do you bluff and so the system learns how to just like big blue learn how tenant moves in advance what the chesspiece was going to do and what the probability was that the other guy was going to do this, if I do that, right. And so it’s decision making. It’s what Kahneman and Tversky shared a beer over 40 years ago and laughed at the stupid decisions people make when emotions get involved in the decision making process. And if you don’t understand Prospect Theory, and understand that, that we dislike losses more than we like gains, and that impacts our decision making. Well, you’re at a fundamental disadvantage when it comes to making decisions about your money. And this is why volume spikes at bottoms, people that sense of panic and we can read that and we can, we can, You know, build better decision making tools around that. And so that’s some of the work we’ve been doing. I’ll tell you what, though, when I figure out the secret, I’m not coming on any podcast. I’m not. I’m done, because I’ve figured it out. So I don’t expect everyone to figure it out. But did to make a better decision to generate a bit of alpha to help the computers help us get there, I think is very powerful, Renaissance technologies and what they did, you know, and with billions and billions of dollars over years and years and years is quite impressive. But we talked about timeframe, I think their average trade was a nanosecond or something. It was a scalp, more scalping than anything else. So that that’s, you know, that that works for something but but not for something different, right.


Larry Berman  41:53

So can I ask is it as it relates to AI, this is one of the I guess, the push backs that folks might have on AI. And I guess I kind of myself, kind of lean in this direction a bit myself. So I’d be curious as to what you think about this idea that, you know, using artificial intelligence in the game of chess, or Texas Hold’em where where the rules are clear, is only split, although there may be a million outcomes, there’s there’s a finite number of outcomes, and so therefore, the chessboard doesn’t move. It’s kind of stable. We don’t we all know what the potential outcomes are. But that’s just not the way it is in investing. And I often just kind of wonder, you know, why is it that from time to time, quite approaches do have these periods of struggle? When, when we can when they can clearly see the chessboard? Why is it that they fall apart? And I always I always kind of lean, you know, fall back on the idea that it’s because there are no set rules, and things are constantly changing, and they can’t be mapped. Similar to how you would map a potential outcome in chess, well, what do you what do you think? What do you say to that.



So I – so I agree with that the potential outcomes are exponential, so infinite to infinity, but it can help us with the bet size, it can help us make a better decision. So it can add alpha. And I think if we can make that better decision on not only what to invest in, but how much to invest in it, relative to our goal. So what is our goal there? If your goal is beating s&p 500, Okay, that’s one benchmark. So you have to create your rules around – my universe is 500 names, how many of them do I own? How much of each do I own and again, if I like apple, and I’m bullish, I got more than 6%. Right? That that’s, that’s simple math, if you want to index again, you have to have your target and so your AI can be very different for different people. So again, it’s a decision helping tool but I don’t think they’ll ever be a black box where you can just turn it on. And never think about it again. Because of you know, the I worked well in burns fry way years ago with these guys. And and I thought they were some of the smartest PhD guys and they ran a CTA book. And they were up to I think they were close to a billion dollars here at a Toronto and I talked to them about working with them over the years and using some of my inputs, rigorous testing, like robust, you can’t imagine the best of the best of the best I would classify these guys that remember in his 2010 or 2011, the flash crash, I remember I was in the Calgary airport at the time, and I was calling my trading desk and we had been underweight and the you know, if we got back to the 200 day, we would get back to our benchmark, so we were underweight the s&p and we were gonna buy some SPY, and so I’m on the phone, and it’s like, Okay, well, we’re 3% from the 200 day right now. And I’m like, Okay, well just make sure the orders are in. And before I said, make sure the orders are in, you know, it was below the 200 day, and all of a sudden, it was so fast that did a plane hit a building that I used to, you know, that was absolutely I’m blind. I’m not seeing anything. I don’t have any screens in front of me, guys, tell me what’s happening? We don’t know. Right? So so in the maker taker model where there’s no liquidity, and you can have that happen. Anyways, the smartest guys that I know that were rigorous CTAs lost their business in one day, they lost 30, 40% or whatever it was that day because it was so fast and their systems … well.


Tyler Wood  49:21

So throughout this conversation, Larry, the continuing thread that I hear is just how important experience and hands on experiences to you both with the MTA internship meeting, Allen and Ralph and, and all the men and women of Wall Street in New York, but also the team at Nesbitt Burns and, and getting started on point and figure charts back in the day. So would you advise that any money manager could tackle this business without actual trading experience? Can you run portfolios based entirely off of what’s been written so far, and just the theory of money management.


Larry Berman  49:58

I you I think you can You know, Markowitz and Sharpe and risk adjusted returns are again, you know, there and that’s how I think about it. And so I look at what the smartest guys that I believe, who are the smartest guys are doing and have done and have published work and, and I take that little piece from there and that little piece in there. But Harry Markowitz said something in an interview years ago, he said, You know, I invented this stuff on risk and return and efficient portfolios. And I can’t handle the volatility. Right. So right now it goes back to that emotional side of things. And so you know, we can train people to be a CMT, or we can train people to be a CFA, and you can have all kinds of degrees and PhDs and this and that, but if your emotional quotient is weak, it’s going to be very, very tough in this industry. And then that’s one thing that in almost 35 years now that I get punched in the face every day with is just put the blinders on, be that horse with that, you know, just focus on what you’re doing, and try to minimize the noise. So can you can you get lucky for a while? Sure. Every everything works periodically, you know, monkeys can throw darts on boards in a bull market. The mettle is when you get into a bear market, and how do you handle the the ugliness of a bear? And then we’ll see what happens to those red traitors. When liquidity dries up, you know.


Dave Lundgren  51:29

We’ve mentioned maybe we can talk a little bit about markets and some ideas to the extent that you’re comfortable, you – we’ve mentioned KWEB, we kind of did some quick analysis on that, looks like it’s setting up in a great spot so that you can see how valuation and potential fundamentals and technicals all come together, there’s a potential opportunity then the upside. I know you were just on the Bloomberg or the BNN network. And you talked about GMOs recent study, which I thought was fascinating. I’ve actually planned to talk to you about it today in our discussion, and it turns out that you covered it on being in the settlement. Was it this morning or yesterday, but it was it was? Yeah, talking about the practice of buying stocks that are trading at 12 more than 10 times revenues, and how that just over time, it’s just not a good practice. It obviously barely keeps up with the bond market and massively underperforms the stock market. So, you know, here we are today, what we have companies that are 30, 40 times revenues, losing money, every dollar they bring in, they actually lose more money. And yet they continue to move higher. So if you were to think about this from an ETF perspective, which is, which is your sort of your realm of focus, is there an ETF that you would not recommend but you might highlight that folks might take a look at the kind of brings opportunity to this, this this wide gap between growth and value today?


Larry Berman  52:43

Well, there’s one that I’ve been looking at recently, RWVG, and it’s it’s a 150-50 strategy that’s long, Russell 1000 value, the WD ETF, and it has a swap that basically neutralizes the average return between growth and value. And so you’re getting pure alpha, if you believe that value is going to outperform growth. So there are some innovative products out there. I’m not invested in it yet today. I mentioned on my show this past week, that it’s something that if you believe that this is going to play out that it’s something you should look at. But the mean reversion trade earlier this year worked very, very well we actually overweighted as yields were rising, we overweighted equal weight s&p are so the RSP ETF over the market cap weighted SPY, and that trade worked brilliantly for months, and then interest rates came down again, and growth over value. So you know, these, these are tactical things. And that’s why I say weeks to quarters are our sort of horizon and we try to navigate but in the same timeframe, I think about cyclical and secular and long term themes. And you know, we’ve been in a falling rate environment for, you know, our whole careers, certainly, you know, the amount of debt out there is catastrophic, the aging demographic, I read, I just read a paper today on this. And they argue that the real rate of interest is probably going to be even lower than it is today, over the next decade or so, and you can argue inflation and everything else. But everything that’s before us today seems to be far more deflationary than inflationary, although we’re set definitely seeing a spike of inflation that could last several years, and then by definition, be a bit more than transitory, but still within the so as the Fed raises rates, they raise rates from zero to 1%. They stopped QE, capital markets fall apart, bonds 10 year goes to zero and so I can see that playing out, because they’ve kept the party going with this colossal amount of debt. And and when you look at the CBOE, the – this the Congressional Budget Office projection of fiscal deficits out the decade, they update this thing several times a year, you see that the future is bleak as it relates to debt. And so the idea of balancing budgets and all those things are almost nonsense. So QE is here to stay. There’s no way in my world that we can ever get out of printing money, and monetizing debt. So that’s the world we live in. So I think what’s going to work, you know, in that horizon, and so it’s hard to argue, other than for a trade that could last months or quarters, why value is going to outperform growth, right? Like if we’re permanently at zero interest rates, then growth oriented companies probably tend tend to keep their multiple up. Right? And so those are a lot of things that I think about big picture when we’re when we’re trying to, to inject things into our portfolio or tilts that aren’t the s&p 500, or any other benchmark we happen to be using.


Dave Lundgren  56:22

Yeah, it’s interesting, you mentioned China, but as a – as a proxy for growth over value, where the US has got probably the most prolific, at least reliable growth sort of engine. In of all the equity markets, you look at, you know, the mega caps and all these these dynamic growth companies that are coming out. And we’re having that as a backdrop, it’s interesting to note that once again, the US relative to the world x, us just broke out to new relative highs again, after a journey i think i think they turned the trend higher in 2007. And it just broke out to new highs again, with all everything you’re speaking to as a backdrop, the US is broken out again as a relative outperformer.


Larry Berman  56:58

Listen, if Silicon Valley wasn’t in California, and it was in Vancouver, the TSX would be the best market in the world. I’m just saying.


Dave Lundgren  57:06

That’s exactly right. No, no, that you know, you I know you’re joking, but that’s actually that’s that’s spot on. That’s that’s why it’s not about the US, outperforming the rest of the world. It’s about the fact that Europe is laden with industrials and financials. China has plenty of tech, but we’re not really sure what’s particularly today with with what’s happening on the regulatory front, what’s going to happen there. So the US has really outperformed me because it’s it’s the biggest proxy for growth on the planet.


Larry Berman  57:30

And there is no alternative there isn’t – it’s the dirtiest shirt in the laundry. And I’ve said that for a long time. And and it just that that party just may keep going as long as they keep printing money and and so you know, from a value perspective, when I see you know, price to sales as it is when I see enterprise value D. But does it – is it just it can keep going. And that’s a big problem for Jeremy Grantham. And value oriented type investors. You know, other than periodic pops where value is doing better. Energy is a big part of value. It’s smaller than it used to be. But listen, the energy sector is not going to be ever what it was before because of climate change. And again, whether you believe that or not is a different debate. But that, that’s the future that most people see you know, uranium. And so again, clean energy but – but you know, is what do you invest in there?


Dave Lundgren  58:29

We had a great conversation with Chris Verrone on our last episode, and he talked about how most energy stocks are in an uptrend and you might be like yourself, Larry, being a multi timeframe investor, I know exactly what he’s talking about. You look at the 200 day average, and most of the energy stocks are above a rising 20 day average. But if you do step back and look at that monthly quarterly chart, it’s just it’s just an uptrend into that ongoing downtrend that started in 2008.


Larry Berman  58:52

It’s it’s ugly from that perspective, and I would argue I’m bullish right now, and overweight on energy. It’s tactical. It’s not because I fundamentally believe I’m much more of a green person and I’ve got a battery powered car and everything else. But – But you know, for a trade right now, it makes sense. But the underinvestment perpetually going forward. Because of the transition away from carbon burning energy to cleaner sources over the next decades. That’s not going away. I don’t think actually, interestingly, I heard about this nuclear fission thing that was going to be based on hydrogen and I, Bloomberg had a story a few weeks ago, so I have a very good friend of mine, his son was one of the first people to defend his PhD on the work he did at the Large Hadron Collider in Cern, Switzerland. I sent him a story and I said, What do you make of all this? Because I asked them years ago, we were at a New Year’s party. And I said, so are you guys gonna find the, you know, the energy source of the world? He says, I gotta tell you, Larry, we don’t know what we’re looking for. But when we find it, we’ll know their experiment. Right. But yeah, there’s something that’s measured in 20, 30, 40, 50. 100 years, where those issues are going to be solved. And we’ll be able to create unlimited energy based on, you know, chemical reactions and things like that. So that’s now the smartest people in the world technology is going to solve a lot of the issues. But it’s not – with all due respect, AOC, you can’t do it tomorrow. It’s transitionary. The sad part is that the energy industry fought it in Washington for so long, that now we got to play catch up a little bit. And you know, it is what it is.


Tyler Wood  1:00:38

As Americans, we tend to be domestically focused, and really heavily equity biased. Do you feel that being in Canada and having exposure to mining and minerals and a more commodity focused financial market structured that that’s helped you diversify beyond just the equity space?


Larry Berman  1:00:55

And so that helped in the last cycle, but but going forward? Are healthcare stocks or marijuana? Yep. Are leading ETFs now, are Bitcoin – By the way, but yeah, we have very little technology, we have one company that’s 7% of the TSX, called Shopify. And that’s been a huge – the biggest stock and the TSX. Now, but other than that, we don’t have a technology sector. So healthcare technology, that’s the future, right? As we age and as we need technology to solve a lot of the issues, we don’t have a lot of that in the TSX. So you know, we’re going to underperform that we might be outperforming short term because of energy. And, you know, if you look around the world, TSX probably still has the biggest energy component. Maybe UK markets are closed.


Tyler Wood  1:01:46

We’ve eaten up a lot of your afternoon. And as you shared at the beginning of this interview, aside from your firstborn, I hear you just hit your first hole in one after 38 years of golfing, Larry, so I wanted to ask on behalf of our audience, sort of what the next chapter for Larry Berman and ETF Capital Management has in store, we can talk about QE, we can talk about Canadian Treasury, you tell us.


Larry Berman  1:02:09

I think about you know, when I retire and in my mindset, you know, having worked always and I was really I was raised in poverty, a borderline. And so I’ve always had to work. So the idea of retiring and not working, not doing it to me is foreign. And I thought, I think we’re so fiscally messed up in the world. Not that I have the solutions, but but I thought it would be an interesting retirement career, maybe to be Finance Minister of Canada. So, you know, about five years ago, I don’t know, it’s not – but it’s a different position. So so in Canada, the Minister of Finance would be the same as the treasury secretary. Right? But you have to be an elected official. And then you get named to cabinet so the Prime Minister would say, okay, you’re in charge of the money and you’re in charge of foreign policy and you’re in charge so there’s the different portfolios so it’s different than the nomination process in the US you have to be an elected official for so you know, I thought about five years ago, I started doing my due diligence and I became president of my writing Association and we knocked on doors and you know, I – RMP, we have a tremendous MTU, just retiring here, and the timing’s not right for me, I’m 56, so I still got probably a decade more in the investment world before I think about that. But that five years of due diligence and and so the TV show is helpful in that way. I was the first time I went to Ottawa, Stephen Harper was was just lost the election. And we have that bonehead. Now, Justin Trudeau is running. Yeah, Ron Ambrose became the interim leader after that. And I was in Ottawa for my first official political conference. And I was introduced to Rhonda and she first thing she said to me, Larry, I watched your show on BNN. I became instant friends with the new leader of the Conservative Party of Canada. And and so she invited me for dinner a couple nights later. And so I said, Listen, you guys are never going to be able to balance the budget ever again. Because the promises that the guys before us made are so colossal. They didn’t do the math, right. You know, when they started Social Security, they they scraped money off people’s paychecks. And you you bozos in the states if I can say that. You can’t any money away, you put an IOU in the social security trust fund. As long as you’re paying interest on it, you’re good, but you have no assets. So the Canadians realized about 20 years ago, because they had a bunch of IOU’s in there too. Right? It was Canadian savings bonds, Canada government bonds. Those are IOUs right today. They monetize them for cash. But but so we actually own private industry private credit equities and our pension funds for Canada. So we’re way better off than you guys. You guys are broke. The fiscal outlook for you guys is terrible. So Canada’s a bit better off but not that not a whole lot. Yeah, right. So the fiscal outlet and QE and, and that so it’s so very interesting to me to, to see if I can get us, you know heading in the right direction because I think the way the world is now where they’re just printing money for things is the completely wrong way to go. And I don’t have all the solutions. But I’d love to put a bunch of smart people in the room that that think about the way maybe a better way to do things. And so that’s maybe in my my future, I don’t know.


Larry Berman  1:02:10

Well, Larry, as expected, you’ve given us a tremendous amount to think about. So thank you for that. Congrats.


Larry Berman  1:05:50

Well, that – That to me is it was the best part of the year so far. Yeah, let’s


Dave Lundgren  1:05:55

Hope that it’s a start of a new trend. AI trend starts with one data point,


Larry Berman  1:06:00

Right? That’s exactly right. But it’s actually funny. So one of the octogenarians at the course has been a member for 50 years and you know and so I – 38 years but he’s been playing for he says I got 7 hole-in-ones, by the way, I said Well, I hope when I made it to all of seven hole-in-ones.


Tyler Wood  1:06:18

This didn’t top check your golf game, Larry, not a chance, not a chance, Not a chance.


Larry Berman  1:06:23

The senior club championship was this weekend, and I finished third overall. So I’m, I’m pretty happy with that.


Tyler Wood  1:06:30

Well, a career. Yeah, well, we are going to grab these charts, get them into the show notes and make sure that we can direct all our listeners back to find you on BNN, the weekly syndicated program as well as ETF Capital Management. And for all the financial advisors out there. I know we didn’t get to it on today’s conversation, but we’ll link off to Quintessence wealth, and they can connect with you there. Larry, as always, thank you so much for your time, your generosity of spirit and your pragmatism.


Larry Berman  1:07:00

What I’ve received in being part of the organization over the years, I I’m willing to give so much to the group because it’s meant everything for my development, my career, friends that I’ve met over the years, and you two guys are included in that. And so, you know, I just love what we do and what what the CMTA is all about.


Tyler Wood  1:07:24

Thank you, sir.


Dave Lundgren  1:07:25

Thank you, Larry. Yeah, thanks for your time. I really appreciate it. Tyler, why don’t you give us a quick update on what’s happening with the CMT Association this month.


Tyler Wood  1:07:36

Thanks for asking, Dave. It has been a busy period for the CMT Association including several sleepless nights for the North American staff as we just wrapped up the inaugural Asia Pacific summit. That was two action packed days full of unique insights across a broad range of themes and innovative technical techniques. We had hedge fund manager and renowned systematic investing publisher Andreas Clenow, guest of Fill the Gap, as well as several of the most esteemed market analysts, including Asia’s number one rated technical strategist, Laurence Balanco, CMT, as well as prolific technical investor and educator Francis Hunt. We hope that all of the live attendees really took a lot of insights on the intersection between market psychology and big data from experts such as Katsunari Yamaguchi and Katsuhiko Okada, as well as Oman Oberoi to hear how the next generation of hedge fund managers is going to integrate new information to invest in cryptocurrency markets. Now if you missed the live sessions, those are available on demand. Don’t worry, all sessions were recorded and they’re available for viewing right through the CMT’s digital event guide. You can find out more information and check out those sessions at The other piece I wanted to mention for all of the members of the CMT community as well as investors at large, the annual Charles H Dow award competition is now open for submissions. So those of you creating new research to advance the discipline of technical analysis, that is a great chance for you to submit your work and take part in that annual research competition. Last year’s winner, the 2021 winner Makenna Barbara, won that award for her paper, “The efficacy of modified momentum based technical indicators on US equities: a study of parabolic SAR.” We’re gonna hear a lot more from Makenna Barbara in the coming weeks as she presents that work, and we publish that research paper in the new issue of the Journal of Technical Analysis from the CMT Association. Want to give a big shout out to our friend Sergio Santamaria, professor at University of Arkansas and the entire editorial board for all of their work in producing that annual peer reviewed double blind academic research journal. The next thing I wanted to mention, Dave is that we will be present. The CMT Association is supporting the Student Managed Investment Fund Consortium, which has their annual conference happening in Chicago on October 28 and 29th. We are expanding our academic partner program around the world with colleges and universities who are teaching students about the value of price analysis, and that’s going to be a great event run by Tarek Zaher and the team at the SMIFC. Finally, I just have to mention that the CMT final registration period concludes November 15. For all of our listeners out there who’ve been considering a career in financial services, and even for veteran managers who are just looking to expand their toolkit, the CMT Program is the exact course and path to go through in order to create that competency, and that immediate recognition of your skill set. The CMT Program will be offering exams December 2 through the 12th. And you can find out more information and complete your registration process right at That’s all for us this time. We’ll see you next time on Episode 11 of Fill the gap. Thanks, Dave.


Tyler Wood  1:10:51

Fill the Fap 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


Larry M. Berman, CMT, CTA, CFA

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Tyler Wood, CMT

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David Lundgren, CMT, CFA

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