Special to AllAboutAlpha.com by: James Burron, CAIA, ICICI Wealth Management Inc.

Ever heard of Peter Lynch, Warren Buffett or Benjamin Graham?  Sure.  But how about Robert Farrell, Alan Shaw or Stan Weinstein?  Chances are many investors have heard of most or all of members of the first group and none of the second.  What’s the difference?  Lynch, Buffett and Graham are fundamental (research) investors; Farrell, Shaw and Weinstein are technical adherents.

The striking part of reading The Heretics of Finance (Andrew Lo & Jasmina Hasanhodzic, Bloomberg Press, 2009) was that upon opening it up to the table of contents, I could only find one interviewee I recognized (Laszlo Birinyi Jr., if you were wondering – and only because he was often on Wall Street Week). This made me think: was I missing out on something, or was technical analysis really just a rather obscure investment style more akin to astrology?

I tried to keep an open mind as I readied myself for talk of head & shoulders (not the shampoo), double and triple tops, pennants (whatever those are) and breakouts.  I’ll admit to being a somewhat of a skeptic of technical analysis.  But as I read Heretics, I gained an appreciation for what drives these highly intelligent – if not quirky – individuals. More…