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Zak Mir is an old friend and godfather to my daughter. He is a very funny man. He can be incredibly cool and he can also be Geek of the Year – ask him about his fascination with weather patterns. That is train spotting for the middle classes. The one chink in his armour is his deprived education background. Not a reference in a PC way to the oppression of a you Asian lad growing up in a post industrial Glasgow decimated by the evil Thatcher. Oooooo all those nasty white racists and bloody English. Thatcher! How they suppress my fellow Celts. Nope, Zak lived in a posh bit of Glasgow ( I gather there is one) and went to Harrow which is clearly a dreadful school as I have never met an Old Harrovian who could write more than three words (they all seem to be able to manage f*ck off pleb) without introducing some spelling mistake or grammatical error.. .And so we come to Zak’s latest ebook.
The person who turned this into English clearly did something very wicked indeed in a past life – I would rather wipe Tony Blair’s posterior than edit a book by Zak. But they have done a good job. So what does Zak serve up?
Given the way that for a chartist like Zak, long term means two days he has gone back into the depths of pre-history in reviewing 2012 and then endeavours to learn lessons from the year just ending to apply to the one just starting. Hence he looks at the way that the G4S (LSE:GFS) Olympics fiasco saw the stock punished brutally at first but how quickly the markets forgave what appeared to be the second most incompetent organisation on this planet after the EU. What does that tell us about buying on a dip after bad news?
The same story also unfolds as Zak looks at what the charts told us about banking stocks. Given that this industry served up a diet of newsflow consisting of fines for Libor rigging, PPI abuse, tax evasion, money-laundering and gun running ( surely wholesale involvement in heroin trafficking is only a matter of time?) One would have thought that banking shares should have headed south – but that is not what, Zak claims, the charts foretold or, indeed, what happened.
Zak adds his own brand of wit to the drier material of charts. The banks, he suggests, have moved from living in a world governed by moral hazard to one that would make the residents of Sodom and Gomorrah blush. But then these days the residents of those towns would be enthusiastic supporters of the established party of Government as it campaigned for a more inclusive country.
Lessons contains the examples you would expect to see: the rise and fall of Apple, the fall and rise of Facebook, and ECB President Mario Draghi becoming the modern day King Canute and turn the tide for the Euro-rouble. All of these are discussed from a technical analysis perspective, as you would expect from one of the Britain’s best known chartists. I rather suspect that like Andy Murray (before he had a PR man to advise him) Zak gets big calls right for Scotland, and gets it wrong for Britain.
If there is a compelling reason to read Zak’s new book it would be to discover how technical analysis, fundamentals, psychology and market sentiment interact and all played their part in the financial markets of 2012. His message (I cannot say that I agree) is that stocks and markets are simply too complex these days to rely only on one of these forms of analysis. Zak argues that a one trick pony will miss out on the complete picture.
And that is how he then moves into predicting what factors are going to be dominant going into 2013. For instance, he forecasts a squeeze higher for the Euro in 2013. This is for a currency that many participants thought might not even make it to the end of 2012, hence it is still likely that there will be upside here – if only on shock value.
Turning from a joke currency to the only real one (gold) Zak argues that with the yellow metals having spent 2012 entirely within 2011’s range, there is little point trying to jump the gun with a bull position until the metal has a $1900 an ounce plus handle on it.
The real lesson from Zak Mir’s book is that in order to succeed in the markets you have to be able to identify which factor is the governing one and not necessarily be tied down to fundamentals or technicals or anything else in a dogmatic fashion.
So if you are looking to load up your e-stocking with a last minute TA read with a good dose of fundamental comment and wit, I would suggest you can do far worse than cough up £4.11 to purchase Lessons from the Markets for 2013 by Zak Mir here
As the person who edited the book for Zak, I can say that it wasn’t that much of a punishment so my past life sins remain mostly unexpiated!