Magic T Theory


A Read A Long:

 A 1997 Introduction to T Theory

by Terrence H. Laundry,

Welcome to my 1997 update of my T Theory which I discovered during the 1970’s. This Introduction contains edited past material to give what I hope is the best overview of the time symmetry property which I believe underlies all market trends. This tool can provide investors a great deal of insight to investment trends and I hope the information proves helpful in your own endeavors. Please keep in mind Laundry and Company materials are provided for educational purposes and of course can not be guaranteed.

If you find the material useful and wish to purse our work further please speak with Paula Burke my Vice President at our toll free number 1-888-228-2995. Our current publications are available for as little as $50 per year and many more resources are available at no cost at our web site www.amshar.com Now a bit about the history of what I call The Theory of Matched Trend Time or just T Theory for short.

The History of T Theory

T Theory is a method of analyzing general investment trends using a time symmetry property I discovered in the early 1970’s. At that time the time symmetry was christened “The Law of Matched Trend Time” because it basically states the duration over which investors can obtain “superior equity returns” will always be equal to the previous time period in which returns were subnormal. A simpler way to put it is to say the market can only “make a strong run ” as long as it has previously ”rested”. As you might expect, the practical purpose of the theory is to anticipate the runs of “superior returns”.

This time match property can be shown to be reasonably accurate and reliable historically so I have proposed as a natural property inherent in market trends but of course we have no real knowledge, so results can not be guaranteed. The time symmetry is most easily represented by the graphical “T” thus the name T Theory. In all instances the left side of the graphical T spans the market’s “rest period” while the right side spans the “ run period’ where returns should be the greatest.

Since its discovery there have been a number of successes which I have referenced for interested readers. During the early years, I became acquainted with Marty Schwartz, who took a very early interest in the T concept, and applied his exceptional talents to become one of the greatest stock market traders. His exploits, philosophy and comments on my theory were presented in Market Wizards by Jack Schwager1 in 1989. To this day I still receive inquires on how to obtain the “secrets to wealth” that Marty discussed in this book. On this point I am sorry to to inform many of you that there are no easy secrets, only powerful tools with which you might learn to uncover major opportunities before the masses arrive.

Marty and I have often talked over the years about the special advantages conferred on us by our US Marine Corps training. It takes a special state of mind to “sign up” for a short boat trip, in a flimsy landing craft, to a beach completely controlled by hordes who have anticipated your arrival and have set up every imaginable way to do you in. Buying into major market opportunities presents a similarly discouraging picture. You may have good reason to anticipate profits, but if a great opportunity does indeed exist, nearly everyone will be against you, including your friends, and the predominant opinion expressed by your peers, including people you respect, will be that you are embarking on a foolhardy enterprise.

I believe that T Theory’s major contribution will be to show you why it will always be difficult to buy at major lows, but using its reasoning you may be able to overcome these obstacles. At each and every great buying point you must struggle at the “moment of truth” where you face seemingly overwhelming negative odds. In T Theory this moment of truth is called “The center post of the T”. It represents the point in time where all the bearish negatives of the past have been discounted by the market and is a bout to be transformed into an emerging, new bull market.

Finding this key juncture is a potentially dangerous occupation, but as with all good Marines, one eventually remembers during the heat of battle, to keep ones head down, shoot straight when it’s your turn


 

1 Jack D. Schwager, Marty Schwartz, Market Wizards , (New York Institute of Finance, Simon & Schuster, 1989), p 263. A 1997 Introduction to T Theory Copyright 1997 by Terry Laundry Page 1


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