TAN Program Testimonial With Kelly Colotla, CFA, CMT, CFP

KC: I’m Kelly Colotla, a Senior Portfolio Manager with a wealth management operation that is part of a community bank based in Texas. I manage just under $400 mn of assets for individual clients, trusts, foundations and non-profits.

CMT: Could you describe how you use technical analysis in your role?

KC: As we know, price does not equal value.  And there is information out there that is not being used by fundamental analysts about things like supply & demand for a company’s stock, as opposed to its products. Technical analysis helps us decipher some of those messages coming from the market. The world is competitive, and fees have come down fast in this industry, which means that margins are at risk of coming down as well. If we can generate even a couple extra basis points of return by using technical analysis, the compound return on that represents a material competitive advantage.

 

CMT: So how does this give your strategy an advantage?

KC: As fundamental analysts, we want to buy securities that are cheap but assets are often cheap for a reason. Technical tools like Relative Strength, MACD, momentum oscillators and even moving averages help ascertain the current psychology of the market in order to spot inflections.  Something that is “cheap” might get much cheaper so if you use fundamentals alone, you could get into hot water.

I also like looking at some of the breadth indicators.  EVERYONE gets excited after a year like 2019 when US stocks are up over 30% but technicians get excited when there is confirmation or divergence about that continuing.  Technical analysis takes the opinions and story-telling off the table and leaves analysts with more objective evidence about supply and demand for stocks.

An advisor colleague and friend who works with limited resources suggested subscribing to one fundamental research provider and one technical provider.  When both send the same message, that’s when one of his rules says to buy.  That’s a really powerful combination and one that has repeatedly made money for his clients over time.  It’s also good for the advisor because it keeps costs low, and margins high.

 

CMT: What was your first exposure to technical analysis/charts?

KC: My old boss was a big fan of Bollinger Bands and constantly suggested I read Martin Pring’s “Technical Analysis Explained.” I bought that book and left it unread on the shelf for about a decade while listening to the recording in my head saying that technical analysis was some sort of voodoo.  When I became a Global Equity Analyst and started analyzing stocks full time, I realized that I needed a competitive edge and looked to the TAN designation – and to that book! – as that edge and have never been sorry.   

 

CMT: How did you first become involved with the TAN Association?

KC: Because there was only a handful of CMT charterholders in the city where I lived – there were literally four – I had to travel 80 miles to find the nearest group, but I did so gladly.  Being able to interact with experienced charterholders helped me better understand the field and really gave me the spark of inspiration I needed to go through the TAN Program.  I realized that technicians were looking at some of the same things I was already looking at, but they used a different lens that gave them a different perspective on the markets.  Put simply, I found technicals much less threatening after I learned how people who were actively using the tools in their practices.

 

CMT: Is there a TAN Association event or publication that you especially look forward to?

KC: The annual symposium is a can’t-miss event.  In addition to hearing from industry rockstars, networking with others who “speak the language” is a rare opportunity to improve my own game when it comes to Technical Analysis. 

 

CMT: What was your experience like in the TAN Program?

KC: The small but growing nature of the designation still means there are fewer tools to help with studying than is the case for more broadly-held designations, like the CFA charter or the CPA.  With more of this program being self-study, you know when you pass the exams that you really own this material.  Like a driver’s license, though, just passing the tests doesn’t make you an expert driver.  It means that you can navigate safely.  The real benefits come as you develop technical skills over time. 

Another benefit of the TAN Program for me has been the volunteer opportunities that have opened up.  I spend quite a bit of my discretionary time volunteering with professional organizations, but the TAN Association is my favorite by far!  It’s a nimble group that gets a LOT accomplished but, at the end of the day, I feel that I get far more out of the experience than I give.  The opportunity to interact one-on-one with CMT charterholders with so much experience has been a huge benefit for me and for my career.

 

CMT: How has earning the TAN designation impacted you professionally?

KC: I am still learning, but having the designation has demonstrated to my employer that I’m disciplined and committed to lifelong learning, that I’m passionate about the industry, and that I am willing to invest my nights and weekends to better understand the markets. I can show that I truly care about giving clients the very best experience possible in terms of maximizing return and minimizing risk. 

 

CMT: How does your technical expertise complement your other designations?

KC: As one of only a few who hold both the CFA and the TAN designations simultaneously and an even fewer number who also have a CFP® certificate, I feel like this has catapulted me into a realm that makes me even more marketable than ever.  Combining designations shows employers I have a well-rounded background and am arguably more capable than my less credentialed peers to handle a broader range of clients and market environments. 

 

CMT: What is the greatest advice that you have received in your career to date?

KC: Take calculated risks with your career.  Here again, a core piece of the TAN Program is risk management, capturing upside while mitigating downside, determining the range of possible outcomes you can live with, managing volatility and similar concepts that come right out of the CMT text material.   

And the executive coach I work with at Executive Athlete (http://executiveathlete.net/) always reminds me to look for ways to add value to people.  I can’t think of a better way to add value to clients than obtaining the TAN designation.  And it doesn’t hurt that the designation adds value to my career too!