Interview with Wall Street Legend Walter Deemer

Walter's also been a multiple times guest on our podcast show

QUESTION : Thank you for taking the time to participate in the Q & A session. Before we start in detail. Would you like to share with everyone who may not know, who you are and your very impressive background.Including what boards that you served on in the trading industry?

WALTER : I first got hooked on TA via Joe Granville’s book in early 1962, just in time for the Crash Of 1962 and Cuban Missile Crisis, and learned a lot more in a State College board room that year than I did on Penn State’s campus. I started working for Merrill Lynch’s legendary Bob Farrell in April 1964, joined Gerry Tsai’s Manhattan Fund (“The Go-Go Years”) at the outset in 1966, moved to Boston to head Putnam’s Market Analysis Dept. in 1970, and formed Deemer Technical Research in 1980 to do TA for institutional money managers. Retired in 2016. Along the way, I was a founding member and the sixth president of the MTA (now CMT Association).

QUESTION : What and who got you into trading. You traded during what many considered the golden age of trading. I bet you have some great stories of characters that you traded alongside with. Care to share any?

WALTER : Trading? I very quickly learned I don’t have the right psychology to trade; I get too emotionally involved in trades, follow them way too closely, etc., etc. It takes a very special person to be a successful trader; I am not one of them.

Having said that, I am amazed how much easier it is to trade today than back then. People bitch about HFTs clipping fractions of pennies from orders – but specialists used to take eights and quarters out of every trade. Also, executions were far from instantaneous and commissions took a huge chunk out of every trade. The financial markets are constantly proving they are “the creations of man that have most humbled him” [Alan Shaw, Smith Barney], but at least the mechanics are a lot easier to deal with now. (Well, except for all those big overnight gaps.) 

QUESTION : What personal or professional failure/setback have you experienced in your life or professional career that has set you up for later success?

WALTER : I was really, really lucky to have been in the right places at the right times. I was in Merrill Lynch’s research trainee program in 1964 when Bob Farrell had just a week to replace Arch Crawford; since I had self-taught experience I jumped ahead of more senior candidates. I joined Tsai Management (Manhattan Fund) at the very beginning to experience the Go-Go years first-hand. I was hired at Putnam in 1970 and experienced the Nifty Fifty growth stock bubble first-hand. So I was very, very fortunate – and very, very lucky – not to have to learn via failures/setbacks like virtually everyone else.

Well, there was one memorable setback; Putnam’s investment bosses in the late 1970’s were a lot more focused on their business than investment results. They pushed me out because I told it like it was (the Nifty Fifty were in a post-bubble environment) rather than the way they wanted me to — which, not incidentally, is a trait a successful trader has to have. That’s why I left Putnam and formed my own company in 1980.

QUESTION : How would you describe what makes a successful Trader?

WALTER : Totally unemotional; has ice water in his/her veins. Absolutely willing to abandon/reverse a trade if conditions dictate. Analyzes facts; ignores opinions. Questions everything; there are no “infallible” indicators nor 100% certainties in trading. Never, ever fails to heed the message of the markets.

QUESTION : What do you feel is the role in having a balance all around life in your day to day activities. What hobbies do you enjoy?

WALTER : Maintaining an all-around balance on life is a very, very difficult proposition since just about everything has some sort of impact on one’s financial thinking. Hobbies? I used to be very active in ham radio contests, where we tried to make as many contacts as possible in 10-48 hours.

QUESTION : What advice would you give to your younger self as it relates to your personal life. What about advice for your younger trading self?

WALTER : Learn everything you can from everyone you can. But question everything; emphatic assertions of absolute truths often aren’t what they’re claimed to be. Keep some hand-drawn charts of key stocks/futures when you start out.  Finally, when you decide to buy something, don’t be cute and try to finesse a better entry price; buy at least half of the position immediately no matter how extended it looks. Most of the time you’ll buy the rest even higher – and if you’ve bought half at least your foot is in the door and you won’t sit there waiting forever for that elusive “better” entry point. (This obviously holds on the selling end, too.)

QUESTION : What good or bad advice do you hear often in life (or trading – or both)

WALTER : Laugh a lot; don’t take things – or yourself — too seriously. Realize everyone has a bad day/streak once in a while. Remember that when someone assures you that “This time is different” it virtually never is; those four words, in fact, are the four costliest words in trading. Understand that “Ours is not to reason why; just correctly sell and buy”; the “whys” materialize after the move, not before, and the money is made on the “what”, not the “why”.

QUESTION : We understand that you are an author of several popular books. Can you let share some information on them.

WALTER : ”Deemer on Technical Analysis” in 2012. “The Basic Essentials of Technical Analysis” in 2014, an expansion of the “facts of life” lecture I gave to Putnam’s new analysts to make them understand the key role technical analysis plays in the investment process (a stock is not the same as the company; since you buy stocks, you need to analyze them, and technical analysis is what you use to analyze stocks). “When the Time Comes to Buy, You Won’t Want To” last March, a collection of snappy sayings I first started employing at Putnam to hit the fund managers over the head to make a point; 64 short phrases packing a whole heap of wisdom in a very few words – all of them with deep ramifications that leave the reader with something to really ponder. (You’ve just read some of them!)

QUESTION : When you have lost your mojo or focus , what do you do to get back on track?

WALTER : Watch trains and Great Lakes freighters on YouTube via Virtual Railfan and Streamtime Live. Listen to old-time rock’n’roll on reelradio.com. (Marty Zweig, Bob Prechter, Stan Weinstein, John Brooks and I were all old rock’n’roll trivia enthusiasts who had legendary get-togethers at MTA Seminars.)

QUESTION : If you could have a big billboard with your favorite saying or message on it, what would it be. Keep it clean as I know you are from New Jersey. LOL

WALTER : “When the time comes to buy, you won’t want to!”

QUESTION : Thank you for taking the time for our readers to get to know you. How can our readers contact or follow you on social media?  And feel free to mention any projects or services you like to mention that you are involved with.

WALTER : I maintain an impish presence on Twitter @walterdeemer, where I make “cute” comments and share market observations. (Not predictions, observations; I’m retired and have nothing to sell any more, although I do remind people once in a while that I have books for sale on Amazon. Helps supplement my pension.)

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