“I’ll be the old guy with the black jacket on,” said Bill Carrigan the day before we met at the Grimsby food court for our interview. In hindsight, the Grimsby food court was not the ideal location for our interview — it was small, noisy, and busy. So, before the interview got started, I asked Bill to raise his voice and talk as close to the recorder as he could throughout our conversation. He complied, but not until he got a cold-cut sandwich from Mr. Sub, and a double double from Tim Hortons, both of which he ate and drank through the first half of the interview. I didn’t mind the munching or the noisy atmosphere, though. This was pure, unadulterated Bill Carrigan, the “straight shooter.” He was honest, brash, and, above all, chock-full of bang-on observations about the market. I was able to watch some of Bill’s astute predictions from our interview play out in the stock market over the next couple of months. I was awe-struck. Bill is a genius — although, to the people around us in the food court, Bill probably came across as just an old guy with a black jacket on.
Bill is very pessimistic about both the markets and the investment industry, questioning the way in which they operate. To illustrate, his Twitter bio reads, “With 30 years’ experience in the investment industry I have learned to never get sucked into a compelling story — leave it for the Investment Sheep. Baahhh humbug.” During our interview, he expounded upon the compelling story of the month: Patient Home Monitoring (PHM). Sarcastically he said, “We’re all going to be rich, we’re all going to make a fortune. Nobody’s going to lose buying that stock.” I guess that’s the opinion of Bill’s Investment Sheep. Clearly, PHM ranks high on Bill’s shitstorm meter.
If it doesn’t become obvious during the interview, Bill is also a fan of the immensely popular Canadian mockumentary TV show Trailer Park Boys, where the character Jim Lahey often uses “shitstorm” in reference to any dire situation fuelled by Ricky, Julian, or Bubbles, the trailer park’s hellions. Truth be told, I was against any form of technical investing in my early days of investing. Today, while I don’t use technical investing to ultimately inform my final stock selection, it does help me validate my investment decisions. I leverage technical analysis to assess a stock’s relative strength, as well as monitor its moving-day averages, and support or resistance levels. Bill has lots more technical indicators to share, many of which could very well become key inputs into your stock selection process. What’s especially intriguing about his technical investing framework is that he combines technical indicators to uncover future takeover plays.
Bill was a technical sub-advisor to Stonebrooke Asset Management Ltd., which manages the Hybrid Investment Program under the Elite Wealth Strategies for Union Securities Ltd. During his time there, Bill made five astute technical selections that were eventually the subject of takeover bids: Gerdau Ameristeel, El Paso Corp., Biovail Corp., Viterra Inc., and ShawCor Ltd. He has been writing a business column on technical investing in the Toronto Star since 1997, and continues writing the Getting Technical Market Newsletter, which he founded in December 1998.
Chartist: an investor who engages in “charting,” primarily using stock charts and technical indicators to inform his or her decisions on stocks (e.g., choosing to invest in stocks with positive trend lines).
Consolidation: companies within a sector (e.g., health care) that merge to create a smaller number of larger companies or volume that builds at or around a particular price point in a stock and determines its technical support.
Momentum: price movements, either upward or downward, that continue, establishing a trend.
Resistance: an overhead price level in a stock chart that makes it difficult for a stock price to break through to make new highs or re-price itself to previous highs.
Roll-up: a highly acquisitive company that acquires companies, integrates them into their parent company, and then makes them accretive, often within a very short period of time, to the bottom line. Can also be referred to as a platform company.
Support: a lower price level in a stock chart that makes it difficult for a stock price to break under to re-price itself to previous lows.
Trend Line: a line drawn on a chart to show the general price direction.