I wanted to share this interview with one of the great mentors of my career, Tom Dorsey.
Tom started as a retail stockbroker with Merrill Lynch in the 1970’s, then Tom led the options strategies department at Wheat First in the early 1980’s. In 1987, Tom started his firm, Dorsey Wright & Associates in Richmond VA. Years later (in 2015), Tom Dorsey sold his firm to Nasdaq.
This is an interview Tom had with Steve Forbes, Chairman of Forbes Media, back in 2017.
Some of the concepts you’ll hear Tom Dorsey discuss in this thirty-minute video are concepts we use at Mullooly Asset Management to this day.
Tom Dorsey was one of the first in the industry to declare there’s no “on off switch” to determine whether to be all-in or all-out of the markets. Rather, indicators ought to be used more like a dimmer switch. This would drop or reduce exposure to the markets, as risk levels rise.
Tom Dorsey and his team taught me concepts like the three box reversal on point and figure charts, over-bought and over-sold readings, relative strength versus the market and also relative strength versus a peer group. I learned from Tom about the importance of sectors, about different indicators, and how ETF’s (exchange traded funds) have completely changed the landscape of investing. ETF’s level the playing field for individual investors.
Tom Dorsey’s book, “Point and Figure Charting” stayed open on my desk throughout the latter half of 2007. Markets were peaking at the time and leadership was changing. Tom’s book remained open on my desk as 2008 unfolded in historic ways. I would not have been able to navigate through those insanely volatile markets without Tom’s educational textbook. So many pages of the book included my notes scribbled up and down the margins.
One of the qualities I’ve admired about Tom is his ability to speak with anyone. I’ve learned to speak the same way: in terms every man, woman and child can understand. Tom and his right-hand at DWA (Tammy DeRosier) used to teach point and figure charting to a class of fourth graders every year. There are so many people in our industry who aim to talk over your head. That approach turns many people off. And that leads others to believe investing might be overly complicated. As I learned from Tom, it doesn’t need to be that way. Tom cleared away all the nonsense and “tells it like it is” in simple bite-sized chunks.
I couldn’t ask for a better mentor.