Readers Talk Back

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And Your Point Is. ...

Re: No Sweethearts in This Deal

Editors:

What is the point of this article by Melissa Davis? First, it is several years too late. Second, but perhaps more importantly, a very similar article (and more timely) was written more than a year ago on the very same subject by an energy industry publication. This is old news and hardly worth printing.

I have been in the M&A business for a while and Reliant, I am sure, had ample opportunity to perform due diligence and I am sure it was sophisticated enough to know a good deal from a bad deal. Goldman didn't make them offer the 40% premium, they came up with that themselves. To insinuate otherwise is not only wrong, it's stupid.

Regards,

Thomas Favinger, Columbia, Md. (Received Feb. 27, 2003)

Weak Defense of Technical Analysis

Re: Do Your Homework on Technical Analysis

Dear Gary Smith:

Earlier today, in a defense of technical analysis (TA), you referenced a paper by Lo. In fact, page 1770 of this paper's discussion summarizes it as follows:

The evidence provided here, however, does not support the hypothesis that technical analysis can be used as the basis for profitable trading strategies. Therefore, I do not think that the results of this paper will move academic critics any closer to technical analysis.

So, I would hardly say that the paper makes a convincing case and I think it was rather misleading of you to implicitly present it as such.

Concerning your comment about courses in TA being taught at academic Institutions, as someone who works in academia, let me give you my opinion:

This surge in courses on TA was a reflection of the bubble years, and of certain academics and institutions trying to cash in on this gravy train. During the same period, there were many academic programs started up in mathematical finance (often by mathematical experts with little or no expertise in finance or economics). Today, anecdotal evidence would suggest that many graduates of these programs are unemployed (and the situation is probably worsening, considering that Wall Street keeps making cuts in personnel).