What Teaching Teaches Me

There is not a lot that has changed in the market or my views of them over the past few days. The trends remain tilted to the upside but the near-term is showing signs of stalling activity. My stagflation theme continues to play out. There was nothing in Tuesday’s CPI release or yesterday’s PPI report that would have me alter my view that inflation is picking up and will likely accelerate if there is a Biden win and a “blue wave” in the Senate. This is when I think we are going to get our stimulus package.

On Monday and Wednesday nights I teach a technical analysis class at Baruch College. I used to do this in person but now I Zoom it in…ZM, good stock that I own. Given that there is not much that has changed in the market, I was thinking about teaching and investing.

First, a quick background: In the Spring of 2019, I took over the class half way through the term. I had never taught a class in my life so I was excited for a new challenge. In the Spring of 2020, that challenge was increased with the onset of COVID and the shift to remote learning (which is still in place for the Fall 2020 term). Here is a list of the key things that I have learned in this role and how I am applying them to my work every day.

1. Teaching Requires A Lot of Preparation.

These students are counting on me to teach them the material. For many of them, this is their first brush with technical analysis. Because of this, I view it as my duty to bring my best to class every night. There is no mailing it in here. After my day is complete in my role at Chaikin Analytics, I will spend a few hours researching my topic for an upcoming class. This includes putting together lecture slides and finding the best real-world examples to hammer home the points in the lecture.

2. Teaching is Humbling.

As a Chartered Market Technician, I am considered an expert in the subject. But as with anything else, once we find what works best for us, we tend to stick with it and, perhaps forget the material that we don’t use every day. Imagine my surprise when I was putting together a lecture on indicators and found myself pulling out the old books to make sure that I knew the material inside out and backward. Just because you are an expert, does not mean that you don’t constantly have to keep the mind extremely sharp by revisiting the material on a regular basis. 

3. Teaching is an Honor.

The technical analysis class at Baruch is an elective . . . I had to let that sink in. These students (this term there are close to 90 of them) are choosing to be in my class. This class is not required for a degree in Finance or Economics. They are genuinely interested in learning the material and hope to apply what they learn in my class in their first jobs out of school or just in their own personal investment plans. That truly is an honor. 

4. Teaching Requires a Process. 

There are steps that must be followed when planning the class for the entire semester. I can’t talk about moving averages until we have covered trends. I can’t dive into Fibonacci until we have learned Elliott Wave. Every step in the process builds on the previous step. Just like investing, if you don’t have a process, the outcome will be all luck. The students may “get” the material but will they retain it? Will they be able to use it beyond the exam? And the grade on the exam? Is it just luck? By having a methodical process that continues to build on the previous lectures, the students will be better able to connect the dots as we go along and retain the material for years to come.

So how does this relate to what I do every day at Chaikin Analytics? Well the good news is, all of this has been a part of my work flow since day one. 

• I prepare by constantly studying the market and past instances of an event in order to guide our clients. I read constantly. I talk with other smart investors and analysts every day. I constantly speak with Marc Chaikin who has seen more in the market than most other investors.  

• I am humbled often. There are times when my view on the market just turns out to be wrong. There is nothing like putting your name on the top of a research report (which I do a minimum of six times a week) and then seeing what you wrote not play out. I know that no one in the market is right all the time. In fact, for many, being right 51% of the time is enough to have a long and fruitful career. But being wrong stings and it will humble even the most grizzled market vet.

• As I said, I write at least six research notes a week. These notes are read by our clients and it is an honor to be their guide in the market. There is a lot of competition for our attention so the fact that our clients choose to read my work (just as the students choose to take my class) is an honor that I take very seriously. 

• As for the process part. I have a process for looking at the market that tells me if the odds favor higher or lower prices. From there I have a process of picking stocks that have solid fundamentals, are outperforming the market or peers, are oversold in an uptrend and are being accumulated. Then I manage risk. That’s it…every time.

Finally, I will leave you with this as a fifth take-away that I have learned from teaching a college class:

5. The Future is Bright.

The genuine intellectual curiosity that the students bring to the class is amazing. They never ask if they have to know a particular topic “for the exam.” They come to class armed with questions from the required reading and from anything else that relates to the market. They want to be there and they want to learn. They email me questions between classes. When we met in person, some of them would walk with me from Baruch (25th & Lex) to Penn Station to keep the lecture going. It was amazing and I miss that. If this is an indication of what students are like around the country, we are heading in the right direction…you might say that we are in a strong uptrend.

To those of you who are teaching, at any level, Cheers! 

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