Re: Trends & Information
tech/a
Where'd you get that from duc! There is nothing predictive about a trend--you dont even know you have one or how long it is until after the fact.
Exactly.
The trend will continue, one possible outcome.
Or, the trend will end, outcome number two.
By *joining* a trend, you are making a prediction that it shall continue, or by shorting it, that it will in point of fact end.
Whereas, with a fundamental analysis, you are *predicting* not that the trend (price) will continue, or fail, only that the valuation in time will return to a higher valuation, or fair valuation.
Resulting in an opinion,your opinion.
An opinion based on the facts.
Factually, it is undervalued.
Your *opinion* rests on the return, or the exceeding of the undervaluation.
Holding a stock to a 40% loss when purchased at a point of "Undervaluation" has me questioning determination of undervaluation.
Only because you trust the market valuation. The market is schizoid.
The ultimate *proof* is not within the gyrations, or volatility, it rests in the *closed* profit/loss statement. The *Chickens* were undervalued, became increasingly undervalued, and are now profitable, as will be the others.
"At this point my analysis is not accurate"---your pet hate---STOPS.
Stops *guarantee* you losses.
The purpose of my live examples is to demonstrate that volatility can be ignored, or utilized to increase profitability, without the necessity of utilizing stops; viz. without losing ANY money.
Dont scare the guy off duc let the market analyse them!!
The market fluctuates between *efficiency* & *inefficiency*
Technicals generally place you in the efficient arena, fundamentals within the inefficient arena. Where would you rather be?
All ords has been on a 20 yr trend.Take a look at QBE had that since $7.85 and now $22 + .Timeframe my friend timeframe
DJIA has been on 100yrs+ trend.
That is because of the underlying fundamentals of equity & economics, nothing what-so-ever to do with *technicals*
It can be as factual as you like but unless enough people see things the same way as you do and continue to see your undervalued stock as still undervalued as it increases 10%,20%,30% or more a TREND wont develope for long enough for you to profit.
I beg to differ................and I invoke the mighty...
Bullmarket and his quest for *income*
Assuming that capital growth is not the over-riding concern, then a fundamentally sound business that grows it's revenues, profitability & dividends can be highly lucrative.
Example KO.
Dividends have grown from $0.17/share to $1.24/share or 12.39% compounded BEFORE share splits. There have been two 2:1 share splits, so, if you had 1000 shares in 1989, you would have 4000 shares today, and your compounded growth in dividend income would have been 49.56% compounded,(resulting in a return of initial capital & pure profit) and all the time the share price could have gone nowhere. Generally however, they rise additionally or proportionally to dividend returns.
jog on
d998