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I suck at reading charts

Tasseography is the divine art of reading patterns in tea leaves. People believe that energy is transmitted through the tea leaves during the process and the resulting arrangement gives us insights of our past, present and future.

"My dear... you have the Grim..."

Technical analysis is somewhat like tasseography, at least in my opinion. A lot of sentiments and 'energy' are embedded in the financial markets. There are possibly at least ten major events taking place in the world at any point of time, which are likely to move the markets. Some are speculative, some are anticipated, some are premeditated.


It is basically chaos theory at work. A complex system at heart.


I do not believe in charts.

I also have zero appreciation and understanding for the creative lines constructed by chartists and punters.

I once sat in a course on technical analysis many years ago. It was intriguing and captivating. Something about the way the overlays on the candlesticks is being explained and how it nicely fits into share price trends really convinces you that with the right observations and tools, you can try to predict those stock drops and spikes.


But since I have never had much luck with stocks and charts, it probably means I suck at it or am just a very lousy investor.

 

But in times like these, I can't help but take a step back and re-look at the bigger trends that have taken place over the last two decades, which is best observed through charts.


This is the DJIA from 2002 to 2005.

The end of 2002 was when the full impact of SARS was felt in the market. The market probably pre-empted some of that effect a couple of months before, Within approximately 12 months, stock prices had reverted back to its pre-crisis levels. One can argue that the spread of the virus at that point of time was somewhat limited by a relatively moderate travel activity globally.


And it didn't stop there. The ne