Computers have managed to insinuate themselves into our lives these days, but not many of us remember the early days. MoniResearch Newsletter publisher Steve Shellans was a pioneer of sorts in the industry; he started to work with computers in earnest 40 years ago, before manned space flight had even been achieved. By the early 1970s, he was a pioneer of another sort when he moved out of New York City, the financial center of the nation, across the country, and there eventually building the beginnings of the market timer database that would be the underpinning of The MoniResearch Newsletter. Shellans came into the public eye in the mid-1980s when Money magazine and USA Today took note of his monitoring of the market timing industry. Stocks & Commodities Editor Thom Hartle spoke to Steve Shellans via telephone interview on June 19, 1997, asking him about the differences between classic market timers and dynamic asset allocators, why some timing models work better than others, and why hiring a professional money manager is, in the long run, much easier on a fragile ego.

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Let's start with your background.

Sure. My undergraduate work was at the Massachusetts Institute of Technology (Mit), and after I received my bachelor of science in engineering, I went to work for Exxon Math and Systems. That was in 1957. I interviewed with Exxon, thinking that there had to be a job there for somebody in chemical engineering. As it turned out, they said that they were just forming a computer department, and would I like to join them? I was candid and told them that I had never even seen a computer before, much less worked with one.

Computers weren't exactly sitting on everyone's desks back in 1957. It was definitely a very different world than it is today. But that offer sounded like a great opportunity, and I spent a year or so learning on the job and finding out how computers worked. I saw all these bright young kids coming out of college with degrees in computer science, even back then, and so I decided that I had better go back to school and get a degree in computer science. That led to my master's degree. One of my specialties was computer graphics, which in turn led to a new career path.

What happened?

A company called Merlyn Systems Corp. was spun off from Merrill Lynch. In fact, I was their first employee. Merrill Lynch wanted an online system that would capture every transaction from six different exchanges. There was the New York Stock Exchange (Nyse), the American Stock Exchange (Amex) and four commodity exchanges. They wanted to be able to store every trade away in a database and allow their own analysts and customers to call up charts on a real-time basis. People could then do technical studies.

I've seen quite a bit of growth in the industry. The very first issue of MoniResearch Newsletter only had something like 10 or 11 market timers, and now IÕm tracking nearly 75. -- Steve Shellans

When was that?

That was in 1968. That was pioneering activity in those days. My principal activity was working with clients who wanted to develop trading models. Back then, there were only mainframe computers, and you needed a professional programmer to help your clients develop the trading models. My group developed a loyal following. Then in 1972, I decided to leave New York, for typical reasons: Traffic, pollution, crime. I moved to Oregon with my wife and four children.

No market timer I know of claims to be able to capture the full uprise and the full downfall. They only claim to be able to capture the fat part of the move.

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