John Prys, Senior Portfolio Manager for ZCM’s MVP Small Cap Core and MVP Small Cap Growth strategies, recently earned what could be called the “Analyst’s hat trick” by adding the Chartered Market Technician (CMT) designation to his CPA and CFA designations. This is an impressive achievement that we believe provides a unique skill set for our equity teams.
In his own words, John gives some detail and perspective on the CMT.
Why did you decide to pursue your CMT?
[John] I have been interested in Technical Analysis since I was introduced to the discipline in the early part of my career. Price change is the market’s way of discounting future fundamental changes for the economy and individual companies. The material I learned in the CMT program helps me better observe, understand, and navigate this behavior.
What was the process you went through to earn the certification and how long did it take?
[John] The CMT Association requires candidates to pass three progressive exams covering various knowledge domains including Ethics, Behavioral Finance, Trend Analysis, Statistical and Quantitative Methods, Risk Management, Chart and Pattern Analysis, Trading Systems and Testing, and Volatility Analysis. CFA Charterholders are exempt from the Level I exam due to material overlap so I was only required to complete the Level II and Level III exams. FINRA recognizes the completion of the CMT Level I and Level II exams as an alternative to the Series 86 exam.
How does technical analysis give your strategies an advantage in your opinion?
[John] Studying technical analysis allows our firm to observe market sentiment and how investors are broadly discounting future fundamentals. These observations combined with those of our internal fundamental analyst teams help us manage risk through better industry allocations and individual stock positioning.
Could you describe how you use technical analysis in your role?
[John] I believe behavioral finance (CMT), fundamental analysis (CFA), and financial reporting (CPA) are the three pillars necessary to successfully navigate any investment environment. I use technical analysis in concert with our fundamental, bottom-up analyst team approach to identify investment opportunities, assess market risk, and maximize returns for our clients.
Are there other CMT’s or Technical Analysts that you admire?
- Sam Stovall has probably had the most profound impact on my technical perspective. His market cycle insights offered context to my observations prior to and during the Great Financial Crisis and helped me develop measurement tools that remain in my toolbox today.
- Martin Pring has also been a major influence in my technical journey. His long-term view on the markets helped me understand the necessity of longer-term trend analysis and his diverse perspective has expanded my understanding of specific intermarket relationships. Mr. Pring is also one of the modern godfathers of technical analysis.
- Katie Stockton, CMT, of Fairlead Securities and Savita Subramanian at Bank of America are two technicians that always offer compelling market opinions. Every time I see them on CNBC, I make sure to listen and think about the implications of their analysis.
- David Keller, CMT, the Chief Market Strategist at StockCharts.com, is a very talented technician, a fantastic communicator, and has a terrific perspective on processes. David is also as nice as he is talented.
Are there any other designations you are looking to pursue?
[John] I am an intellectually curious person by nature, so I always look to learn and challenge myself. You never say never, but the CMT Charter is likely the last professional designation I will add.