I founded openinterestanalyst.com (OIA) in December 2011. OIA’s original mission was to issue daily reports for commodities and currencies based upon my interpretation of price, volume and open interest. Over time, I expanded my research capabilities to equities.
When financial information became more readily available in the early 2000s, I was able to examine commodities and securities for the first time using methods that had been previously unavailable to me. From that period to the present (and I continue to learn), I have evaluated every technical approach that could possibly provide an edge. Through trial and error and over the course of years, I was able to establish a set of protocols that help me identify promising investment setups.
Prior to my work as analyst, I spent the first half of my life in advertising and began in national media sales. From there, I migrated to the agency side of the business and worked on the accounts of Alfa Romeo, Lucasfilm, CBS Radio, San Francisco 49ers and California Magazine.
During my time in advertising, I traded stocks and commodities, but I had to deal with the dual issues of career demands and reliance on brokers for information and execution. I made my share of dumb investment mistakes for more years than I care to count. I had little understanding of markets and even less about my own market psychology. I read numerous books, and financial publications in an attempt to gain knowledge to improve my performance, but most books had little value.
I developed my methodology only when I decided to isolate my costly investment mistakes and take action to neutralize them. It took years to formulate the methodology, and an equally long period before it became instinctive.
In 2014, I made the decision to write a book about the methodology. Due to its difficulty, it took several years to complete, but in December 2020 How I Trade Stocks was published. Though the book is not a complete exposition of my methodology as I inform readers, it does provide an analytical framework for investment decision making.
The books listed below had an impact on my thinking and I have listed them from the earliest publication to the latest. In order to keep the list manageable, I excluded several fine books that may have been redundant. I will continue to add to the list if I find books with original or compelling ideas.
“The Crowd” by Gustave Le Bon published in 1895. This is a short but interesting book on crowd psychology with major implications for politics.
“Fifty Years On Wall Street” by Henry Clews published in 1908. Clews was a contemporary of Jay Gould. He wrote about the speculators, their methods and colorful characters of the second half of the nineteenth century.
“Studies In Tape Reading” by Rollo Tape. Published in 1910, Rollo Tape was the nom de plume of Richard Wyckoff, a legendary technician of the early twentieth century. This book discusses the importance of reading price action and to avoid being influenced by news and other events.
“Reminiscences Of A Stock Operator” by Edwin LeFevre published in 1922. A story of fiction, and loosely based on the life of Jesse Livermore. Perhaps more than any book I ever read, it impressed upon me the necessity of controlling losses and that price action always takes precedence over news and rumors.
“The Battle For Investment Survival” by Gerald Loeb. It was originally published in 1935 and was revised in 1965 on the 30th anniversary of its first publication.This book discusses the importance of position sizing and controlling losses by using examples of some horrific stock declines. Mr. Loeb, a San Franciscan like me, was vice-chairman of the board of E.F. Hutton when it became a public company in 1962.
“My Own Story” by Bernard Baruch published in 1957. Baruch was a legendary investor of the late nineteenth and the early twentieth centuries. One chapter that left a lasting impression was a tale of Baruch entering into a coffee trade on the recommendation of a friend, who was a leading New York coffee broker. The trade became a loser and rather than liquidate it, he sold his winning positions to finance the coffee trade. This taught me the importance of never taking tips, learning to think for myself and controlling losses. The chapter titled “Some Waldorf Characters” is worth the price of admission.
“Charting Commodity Market Behavior” by L Dee Belveal published in 1969. This book taught me how to use price, volume and open interest as a method of analyzing price action. The book is the precise work of a master who generously reveals his approach.
“Market Wizards” by Jack Schwager published in 1989. This is the first book in a series that discussed the thought process of high performance traders. The book provided context for my own ideas at the time, which were still in the very early stages of development.
“Liar’s Poker” by Michael Lewis published in 1989. A terrific book. I have nothing to add to the considerable praise it has already received.
“Investment Management” by Robert L. Hagin published in 2004. Mr Hagin does an excellent job combining the theoretical with the practical.
Also in the book, the author quotes Benjamin Graham in 1976 as recanting his belief in the kind of security analysis that made him a legend.
“Hedgehogging” by Barton Biggs published in 2006. I have one regret about Hedgehogging. I read it after Barton Biggs passed away and I was unable to thank him for it. He was a terrific writer who had a delightful sense of humor. It comes alive as the book recounts the trials and tribulations of his life as a hedge fund manager.