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b'In Episode 119, we welcome entrepreneur and technical analyst expert, Tom Dorsey.\\nMeb begins by asking about a book which Tom claims had a tremendous influence on his entire life. From this, Tom tells us the story of being a young broker, eventually introduced to a book called The Three Point Reversal Method of Point & Figure Stock Market Trading by A.W. Cohen. After reading just the first paragraph, the clouds on Wall Street parted and he saw clearly. In the end, it\\u2019s the irrefutable laws of supply and demand that cause prices to change.\\nMeb asks for more details, so Tom tells us how Point & Figure charting was created in the early 1900s. You\\u2019re watching the up and down movements of an asset \\u2013 those movements represented by Xs and Os. You\\u2019re looking for patterns in these up and down movements.\\nMeb asks how one goes from charting these Xs and Os into building an actual strategy. Tom gives us an example using just two stocks, Coke and Pepsi. He walks us through how we would analyze the price movements relative to one another to determine which one might be the best investment at that moment. It\\u2019s a discussion of relative strength investing.\\nMeb asks if this approach means an investor can totally ignore fundamentals and value. Tom tells us that fundamentals answer the first question \\u2013 what should I buy? But relative strength answers the question, when should I buy? You can be a value investor, but you may not want to be the typical value investor who buys a value play, sits back, and waits for a long time before other people see that he\\u2019s right. Tom would rather get the stocks that are ready to move now. So, he tells us to take the fundamentals and work from there.\\nNext, the guys get into a discussion that bounces around a bit: smart indexing\\u2026 the beginnings of ETFs at the Philadelphia Stock Exchange (Tom was in the middle of it from basically the beginning)\\u2026 and how 92% of active managers never outperform the S&P. But this last point dovetails into a broader conversation of whether \\u201cthe S&P\\u201d can beat \\u201cthe S&P\\u201d. The topic touches on the difference between cap and equal weighting, as well as myriad other indexes that might exist within the broader S&P universe. One of the takeaways is that index investing can be harder than you might think. He suggests looking at all the indexes, then using relative strength to narrow it down.\\nMeb asks what the world looks like to Tom today. What areas are showing the most strength? Tom tells us the strength has been in small caps for a few years now. Value has been hurt, which points toward the problem with value \\u2013 the asset can be down and out, but still not move north as you want it to.\\nThere\\u2019s plenty more: the various ways to implement a relative strength strategy\\u2026 Tom\\u2019s affinity for selling covered calls\\u2026 the benefits of automated investing\\u2026 how Tom\\u2019s team is beginning to apply their strategies to crypto\\u2026 and an upcoming investing forum Tom will be a part of consisting of five market veterans with a collective two-hundred years of market experience.\\nAnd of course, we have Tom\\u2019s most memorable trade. This one involves 10 shares of a certain biotech stock that raced higher and made a huge difference for one of Tom\\u2019s friends in need.\\nGet all the details in Episode 119.\\nLearn more about your ad choices. Visit megaphone.fm/adchoices'