Monday, June 20, 2011

A Father’s Day Blog

This past Sunday was Father’s Day, and I found myself reflecting on fatherhood…as did (I hope) many other fathers out there. My father, Paul, passed away many years ago but his lessons about the dignity of working have never left me. My own children, Danny (20) and Carly (17), spent the day with me at Congressional Country Club where we watched the U.S. Open from the friendly confines of the RBS hospitality pavilion on the 11th hole. Thank you to RBS for your hospitality, and thank you kids for not acting bored while you were hanging out with your old man. My father’s day present was a new Kindle. My son has already informed me that if I don’t think the Kindle technology is “cool” I shouldn’t worry because he certainly does. Hint…hint.

Besides my own family, I found myself thinking of our own Sean Dillon, who writes in this space with the rest of the investment team and who serves as our senior portfolio trader as well as covering a couple of S&P sectors. Sean just became a first-time father with the birth of Luke Patrick on May 20th. Luke weighed in at 7 lbs. 9 ounces (or thereabouts since Sean is only about 90% sure of this detail). For Sean’s Father’s Day present he was not only presented with a healthy baby boy, he was also presented last Friday with earning his CMT designation. For those who don’t know, CMT stands for Chartered Market Technician and you can’t get the letters without taking about two years’ worth of classes. It is the most well recognized professional designation in the industry for those who look at charts in order to discern whatever can be gleaned from closely analyzing the changes in the market. Technical analysis is the opposite of fundamental analysis, where investors try to figure out why the market is moving in any particular direction. At Pinnacle we break that school of thought into two different camps, one being based on the valuation of the market and the other being based on our analysis of the market cycle.

Technical analysts presumably don’t care why markets are moving, they simply care that they are moving. It is a method to understand the psychology of investors…which is very helpful as long as fear and greed move markets. Sean’s expertise in technical analysis adds to the strength of our team where Rick and Carl are experts at global macro and Sauro is an expert in quantitative methods. Watching these guys calmly and expertly dissect difficult markets kind of makes me feel like a proud papa….which is certainly apropos on Father’s Day. I can’t remember which commercial I’m ripping off to say this, but “Man…these guys are good!”