Edson Gould: Dean of Technicians

  • by Amir El Araby
  • November 21, 2018, 11:44 AM
  • 1827 Views
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Edson Gould was one of the first stock market technicians in Wall Street. He spent over 60 years studying and working in financial markets.

Gould studied the arts at Princeton, engineering at Lehigh (where he graduated in 1922), and finance at New York University.

In 1922, after working for a short time at Western Electric, he joined Moody’s Investor Service as an analyst and later was editor of Moody’s Stock Survey, Bond Survey, and Advisory Reports.

In 1948, he began at Arthur Wiesenberger & Company, where he developed and edited the well-known Wiesenberger Investment Report and became a senior partner. He also was Research Director at E. B. Smith (which later became Smith Barney), and worked for Nuveen.

In the early 1960’s, he founded his publication Findings & Forecasts. In December 1969, Anametrics, Inc., an investment advisory firm, bought Findings & Forecasts. Gould edited Findings & Forecasts and chaired the firm’s investment committee. It was during this time that Gould attained his greatest fame. His 14-16 page reports had a high readership of some 2,500 subscribers.

The famous technician Walter Deemer has admitted that Gould was the “hottest technician in the 1960’s.

Once after Gould issued a bullish report on SCM, an office equipment company, Gerry Tsai (the “gunslinger” manager made famous in Adam Smith’s The Money Game) bought 25,000 shares and then another 25,000 shares until SCM moved past $60.00, which had been Gould’s target price.

According to Deemer, Gerry Tsai knew that Edson Gould was an analyst to follow.

In late 1976, he began managing the Edson Gould Fund, possibly one of the first mutual funds to be managed using technical analysis.

In early 1977, the fund was holding “growth and glamour stocks” such as Ford, Citicorp, McDonalds, and Gannett, the kind of stocks that had lost their luster up to then. In fact, Gould maintained a “Glamour Stock Average,” an index of growth stocks.

Gould’s popular fame has centered on some of his uncannily accurate stock market forecasts. These forecasts were presented in major reports, which he issued for the year ahead. Some of his better known forecasts were:

In 1962, Gould predicted that the DJIA would rise another 400 points but the great bull market that had started in 1942 would end in 1966. The bull market expired on February 11, 1966 at 1001.11, having risen from 93 in 1942.

In October, 1972, with the DJIA at 940, he said the DJIA would rise to 1040 – 1050 by year’s end. The DJIA rose to 1051.70 on January 11, 1973.

On January 16, 1973, in a “special sale bulletin” he urged subscribers to sell, believing the bull move that had started in 1970 at 800 was over. By December 1974, the DJIA plummeted 497 points.

In November, 1979 in his report titled The Sign of the Bull, he wrote: “The ‘unexpected’…is an intermediate-term DJIA move over the next several years to the 1200-1400 level, with an eventual move up to the 2500-3000 level by the mid-to late-1980’s.” These levels were reached in 1989. In The Sign of the Bull, he concluded: “[T]he…years ahead are quite likely to produce a new and exciting period – one that should meet the expectations of even the most optimistic bulls.” We know what the stock market did after 1982.

Yet Gould was not perfect with all his forecasts. In January 1975, in a Barron’s panel, he expressed the opinion that gold would move up to $258 “during the first half of the year, maybe the first three months” of 1975. Gold had just reached a high of $195.25 during the last week of December 1974. However, it was in May 1979, four years later, when gold moved above $258.

Gould’s interest in market forecasts can be traced to his early career. In early 1935, he told Barron’s editors that 1937 would see a bear swing. The DJIA fell 32.82% in 1937. He wrote articles, published in Barron’s in 1937 and 1941, under the name of Edson Beers. Barron’s wrote:

Gould was described in 1977 by Forbes magazine as the “dean of technicians.”

Many technical analysts think that, the best product Gould presented to the world was “Speed Lines” which most of technical institutes are currently present in their curriculum.

 

Amir El Araby

Financial advisor with 22 years’ experience in the technical analysis studies for FOREX, Commodities, and Indices. Amir El-Araby worked as a mentor for many companies and institutes, where he presented new methods for trading in the financial market. Amir is a member of the Egyptian Society of Technical Analysts (ESTA)

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