THE BOOK OF GRANVILLE: Reflections of a Stock Market Prophet

The key to success as a technical analyst, according to Joe Granville--a prophet often without honor in his own trade--is to let the market tell its own story. With plenty of breaks to lecture on indicators and settle scores, Granville jauntily recounts his odyssey from suburban Connecticut childhood--when his astrology-minded mother sparked a lifelong fascination with the predictive possibilities of numbers--to controversial superstardom as a stock market seer. Though he concentrates on forecasting triumphs (e.g., the infamous January 6, 1981 sell signal that precipitated a drop of over $40 billion in stock prices) and setbacks (missing the dramatic bull move which got under way in August 1982), he doesn't shy away from personal blots--including two failed marriages (one of which produced eight children), periodic problems with alcohol and gambling. As a practical matter, Granville was something of a loser until the mid-1970s. Following a WW II Navy stint, he took a degree in economics (an irrelevant discipline, he now says) at Duke, then eked out a living writing articles on the investment potential of philately. Having flunked Merrill Lynch's aptitude test for brokers, he caught on with E. F. Hutton where he wrote a daily market letter and began refining his technical theories. (In brief, technical analysts base their market and stock predictions on supply/demand factors, while fundamentalists focus on corporate earnings, interest rates, and other hard data.) In 1963, Granville set up shop for himself as a newsletter publisher--but it wasn't until the post-Watergate/OPEC era that a series of accurate market calls boosted circulation and got him into the seminar game. The financial Establishment was largely repelled by his brash, even clownish showmanship (which featured on-stage appearances as Moses, complete with market commandments--and at least one pants-dropping episode); but Granville captured the imagination of the investing public--and attracted a lot of press attention, which he clearly relished. Unchastened by his post-1982 eclipse, the 60-year-old Granville remains as contentious and confident as ever. His I-did-it-my-way story makes lively, not unlikable reading.