Clark Yingst

Clark Yingst began his street career at Merrill Lynch, initially as the Chief Research Assistant to a group of securities analysts who tracked and recommended emerging growth stocks. The group was chaired by Lawrence Rader, then Wall Street’s top rated small-cap analyst and from whom Mr. Yingst first learned the rudiments of fundamental equity analysis. Consisting of five generalists, the group followed seventy-five companies drawn from a wide variety of sectors. The diversity of the coverage afforded Yingst the opportunity to familiarize himself with an unusually broad range of concepts and measures used in assessments of companies’ fundamental prospects. YINGST then participated in the launch and co-management of a marketing unit solely devoted to the research and retail distribution of the firm’s NASDAQ equity product. This unit assisted retail financial advisors and clients in navigating the NASDAQ market, not an easy task given the speculative and volatile nature of many of the stocks inhabiting this universe. A number of factors contributed to the success of the unit, but certainly chief among them was the addition of technical analysis to the arsenal of tools used to identify potentially attractive stocks and at the same time minimize capital risk. The now legendary Robert Farrell, then Merrill Lynch’s Chief Market Analyst and the richness of whose weekly analyses Yingst always sought to emulate, first introduced him to the discipline. He added this tool following the harrowing and humbling experience in 1983-1984, his first bear market. Indelibly etched in his mind, lessons learned in that environment were profitably recalled and applied in early 2000, playing a pivotal role in his bearish, deliberately contrarian and correct call on the techs. That first bear taught him lots, including an abiding respect for the collective foresight of the market. In late 1985 Yingst left Merrill Lynch to join Smith Barney, then the small and still privately owned investment-banking boutique catering to individual investors. He was recruited by the firm to oversee NASDAQ and over-the-counter retail sales, principal and agency. A senior officer, Yingst reported directly to Ralph J. Costanza, his predecessor in the role and a member of the board. Duties were various, but again primary was the analysis and trading of the firm’s NASDAQ equity product. The intimacy of the environment enabled him to interface directly and daily with senior securities analysts, seasoned principal traders, and successful financial advisors and their clients in a coordinated attempt to identify and merchandise attractive NASDAQ stocks. Key to the department’s success was the growing breadth of the sources and disciplines upon which they drew. Reflecting the ongoing consolidation in financial services, life at Smith Barney changed dramatically in the early 90’s, leaving Yingst receptive to an offer from Prudential Securities to help in the analysis and trading of its principal equity product, listed as well as NASDAQ. He initially focused almost exclusively on individual equities, but soon developed the role into that of a Senior Market Analyst in the firm’s Equity Trading Division. In performing this expanded role, he interfaced directly with two primary groups, one, principal traders, NASDAQ and listed, and two, financial advisors and high net worth individual investors, providing both with prospective analyses of the market at large as well as specific sectors and stocks. Analyses provided were fully inter-disciplinary and hence uniquely broad-based, drawing freely upon fundam ental, technical, macroeconomic and quantitative data. Forecasts, short and long term, were based upon the discovery of critical links between these normaly isolated analytical disciplines and fields. The 2000 bearish call on the techs exemplifies the potential benefits of such a broad-based approach. Analysts specializing in a single discipline to the neglect of al others sufer ‘tunnel’ vision. The narrowness of their focus and the consequent lack of a truly peripheral vision deny them the opportunity to discover such links. It was in the performance of this enlarged role that Yingst became increasingly sensitive to the power of change in the financial markets. Indeed, he has concluded that it is change, or at least perceptions of such, that move markets. As a result, the primary objective of his analytical endeavors is to spot and anticipate such change. In pursuing this goal over the past several years, he has become more and more convinced of the advantages of an interdisciplinary approach, discernible changes in one analytical field frequently providing a basis for anticipating changes in another. In 2000, for example, changes in both technical behavior and macroeconomic data foreshadowed deteriorating fundam ental conditions in the techs. Specifically, technical violations of uptrends launched in late 1998, when interest rates worldwide were falling, clearly suggested that the higher cost of capital would impact both tech investment and earnings, contrary to the consensus view. Technical analysis is one of the tools on which Yingst relies in attempting to fathom and forecast the market. His use of this tool has evolved considerably since he first discovered it in 1984. For example, he has since learned that the study of price must include an assessment of architectural or structural integrity, any flaw in which is likely to limit the sustainability of a move. His technical architectonics is intended to provide such an assessment. He has also learned that the study of price alone, even when incorporating an architectonics, is ultimately inadequate. Indeed, he believes it to be inherently reactive and has found that it can even lead one astray. Accordingly, he attempts to probe beneath price to mine and analyze underlying dynamics, specifically searching for technical divergences, positive and negative. The discovery of such divergences can enable one to anticipate changes in price and even trend. Examples of such probes include his technical barometry, designed to detect emerging changes in underlying momentum not yet manifest in price. The potential rewards of such an exercise were illustrated in April 2001, when the discovery of a number of positive divergences underlay his contrarian and correct forecast of a near-term bottom and turn in chip and chip equipment stocks, smack in the face of a new low in the SOX! In closing, Yingst believes that his interdisciplinary approach to the equity markets has been of considerable value to the many individual investors with whom he has worked over the course of his career. Proof of its efficacy is perhaps most apparent in the longevity of the relationships that he has cultivated and maintained, some spanning fifteen years or longer and hence surviving more than one bear market. It has been suggested that bear markets are the true test of the mettle of any particular approach. If the longevity of these relationships is a measure, then the approach that he has developed and which he continues to refine can be said to have passed each of the stress tests to which it has been subjected. Insights and forecasts derived from the approach have also been of considerable interest to the financial media. Clark has made frequent appearances on CNBC, CNNFN, Bloomberg and FOX and has often been quoted in the press.