Interview - April 2002

INTERVIEW

The Power Of The Chart
Terry Bedford Of Bedford & Associates

Technician Terry Bedford, president of the Bedford & Associates Research Group, CNBC commentator, and MSN Money columnist, developed an interest in the market early on: at the age of 15, he pestered a local broker in Branford, Ontario, until the broker recommended some classic texts on technical analysis. Technical analysis stayed with him; in the early 1990s, he founded Bedford & Associates, which provides technical analysis research to institutional clients, and also manages hedge funds.

STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan spoke with Terry Bedford on January 28, 2002, via telephone.

"I actually started learning technical analysis - and this is kind of interesting - around the time I started losing lots of money."

Let's talk about how you got started in technical analysis.

I was already interested in the stock market by the time I was 15. In Canada, where I'm from, you have to be 16 to buy any stock. But that didn't stop me. I went to a local brokerage firm in Branford, Ontario, and met with a broker. I think he was amused a 15-year-old was approaching him like that, but he recommended several books, including The Intelligent Investor by Benjamin Graham and other books by John Murphy and later on, Martin Pring. He told me to go to the library and read these books on technical analysis. This was in 1981.

I read those books and then went back to his office, and I kept bugging him, asking, "What do I do now that I've read these books? I guess that makes me an expert, right?" He said, "Well, no, you're not an expert just yet." He gave me some exercises to do, such as trying to identify trends. When I turned 16, I began purchasing stocks.

What was your first purchase?

My first purchase was a warrant on Alcan, which is the Canadian version of Alcoa. I spent about $1,500, and made it into about $3,000, doubling my investment. That was pretty cool, so I started doing a little more work. I must admit that at the beginning, although I was supposed to be learning technical analysis, I was really just shooting from the hip and buying stocks without any discipline. But I did well and I got lucky.

After my small $1,500 account grew to about $10,000, I actually started making some trades based on technical analysis, and the broker got me interested in some other stocks.

And were you still 16 at this time?

Yeah, it took me just about a year to actually start making money. I traded all the way through my high school years. My account eventually got up to as high as $100,000. While I was at university I decided to study law, but my broker encouraged me to become a stockbroker instead. So I took some related courses from a brokerage, got my license, and got a job in the industry. I kept trading all the way along, but I realized that the more I learned about technical analysis, the more I understood that what I was doing previously was not really technical analysis. It was mostly just luck.

...Continued in the April 2002 issue of Technical Analysis of STOCKS & COMMODITIES

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