My background is quite uncommon.
Lawyer by trade since the early 1990s, I became an investor by necessity. I needed to invest the savings derived from my profession, and I wasn’t very excited about placing my money at the local bank. My gut feeling told me it was riskier to let my money sit in the bank than to be an intelligent investor. However, to be a smart investor, I had to educate myself. Not an easy feat.
My first contact with the investment world was in 1992. At that time, a Spanish bank was on the verge of bankruptcy. Their shares declined sharply. I thought that eventually, the Central Bank was not going to let it go down and that a larger bank would take it over. So I bought a quite sizeable amount of shares (in relation to my net worth at that time; something which I wouldn’t do nowadays). As I suspected, the failing bank was taken over, and some three years later, my investment had multiplied by five when I sold out.
Since then, I was piqued by the stock market, and I began making sporadic investments and reading more and more books about finance. By the year 2000, I bought Hamilton’s “The Stock Market Barometer” and, more importantly, Rhea’s “The Dow Theory.” While I found both books interesting, I didn’t have an epiphany, so I continued dabbling with other investment methods more geared towards becoming a trader. To this end, by the end of 2002, my family and I moved to the Dominican Republic so that I could trade in the same time zone as New York. Since then, my large family and I have happily lived there.
The 2000-2002 bear market got me mostly out of stocks, and I had the luck that my small portfolio was not hurt so badly, so I could even make on average capital gains when I sold out by the end of 2002 upon my moving to my new host country. However, it was more luck than skill, as most of my investment decisions were fundamentally based, and I was no Warren Buffet.
While not always successful, as a consequence of my investment decisions, my capital grew, and I built a nest-egg. Intellectual affinity directed me to invest a large part of my assets in an investment fund by the mid-2000s. From being a client, I ended up being a director of the managing company of the fund. It was a valuable experience, as I could see the “practical” side of the investment world and made me become friends with really talented people. The more I learned, the more interested I was in technical analysis, which prompted me to become an entirely technical trader.
Since 2006 and following the recommendation of a colleague in the investment arena, I began to re-read Charles Dow Editorials, Hamilton, Rhea, and Richard Russell. Something was intriguing in the Dow Theory. While still not proficient, the Dow Theory helped me avoid unscathed the horrible 2008-2009 bear market, which intensified my desire to master the theory.
The real turn-around for longer-term investing came in 2012 when I read Schannep’s “The Dow Theory for the 21st Century”. This was the epiphany. Suddenly all the pieces of the puzzle fell into place. Schannep had accomplished what even Rhea could not: I could see the immediate practical application of the Dow Theory. I was so inspired and convinced after having read his book at least five times that I became a Subscriber, and I started a blog in which I analyzed the stock market (and precious metals and interest rates) under the prism of what I call “Schannep’s Dow Theory.” This blog (dowtheoryinvestment.com) continues to this date and serves to cement further my knowledge and full confidence in the Dow Theory.
The culmination of my blogging and “hands-on” experience has been my joining as contributing editor at Schannep’s service “thedowtheory.com.” I do hope I can make a meaningful contribution.
Read Manuel’s August 7th, 2021 Interview with Alessio Rastani of LeadingTrader.com »