Which one do you use? Technical or fundamental analysis?

[Realist]

Re: Which one do you use? Technical or fundamental analysis

Disclaimer: These comments are not financial advice, and readers are advised to seek appropriate professional financial advice for their personal circumstances. Personal views for discussion & educational purposes only.

interesting...

 

[tech/a]

Re: Which one do you use? Technical or fundamental analysis

http://lightning.he.net/cgi-bin/suid/~reefcap/ultimatebb.cgi?ubb=forum;f=74

Read and weep----once you play traders have a real track record you wont mind the tax and you'll be in the position to trade for real.

In the meantime your contributions are helpful in many ways.

 

[sails]

Re: Which one do you use? Technical or fundamental analysis

How does it make me money?

Well everyone following a trend leaves the door open for others to go against the trend and get bargains.

If everyone is buying red shirts cause that is the trend, then market forces will dictate black shirts will be on sale, I'd buy an Armani black shirt at a discount to your red shirt! You wouldn't - you'd pay too much for the red shirt and wear it till it went out of fashion. Fair enough too, most people would, but when black shirts come back into fashion, years later - I've already got one, and I paid bugger all for it. You'd rush off and buy a black shirt at a premium. My costs are lower. Your clothes bill would be higher than mine.

To follow through on this analogy, the trader also looks to buy the black shirts when they are on sale, but his goal is to sell them when they are expensive and then repeat the whole process when the next colour shirts are on sale. More effort required, but the goal of the trader is to generate extra income over and above the increased fees.

Perhaps T/A vs. F/A has more to do with timeframe.
F/A is far more necessary for long term investors but not much use to the short term trader.
Day traders would be predominately using T/A with perhaps a just enough F/A to reduce the risk of being caught in a bankruptcy.
Then there are those who trade medium term who can't see what all the fuss is about and use both

 

[tech/a]

Re: Which one do you use? Technical or fundamental analysis

http://lightning.he.net/cgi-bin/suid/~reefcap/ultimatebb.cgi?ubb=forum;f=74

Read and weep----once you play traders have a real track record you wont mind the tax and you'll be in the position to trade for real.

In the meantime your contributions are helpful in many ways.

Just on this.
I'm sick to death of those people who keep belting out "I'm better than you are rubbish"
Everytime ANYONE puts up decient quantifiable arguement you get these morons who have nothing but "look at me look at me arguement".

Duc and I have discussion at length and we both question the merits of each others ideas,some accepted most not.

I spend a lot of time and thought into the work I post.
I want nothing from it.
I dont have to do it,but from the feedback from many I hear from both here and Reefcap,its appreciated and found helpful.

Grow up people and become involved in making the challenge of trading an enjoyable journey by sharing experience with other with like objectives.

Everyone has something to add even those who's ideas are percieved as flawed by others. In fact the lesson learnt from failures can be much greater than the winners.

 

[Sean K]

Re: Which one do you use? Technical or fundamental analysis

Keep posting Teck, appreciate ALL the comments here. Just have to wade through some dirt for the diamonds sometimes.

I don't understand the link you posted to Nick's website though. A bit of cross promotion??

 

[RichKid]

Re: Which one do you use? Technical or fundamental analysis

Hello Yogi,


Thanks for your comments, much appreciated.

Yogi, I was not asking you for a free lunch, nor would I expect you to ask me for one. I was merely asking you for a taste of how you trade to compare notes. I did say a clue, not your entire methodology that has taken you years to develop, I would not expect you to give your IP away for nothing..............
............
......

I have essentially invited you to open up a little to have an interesting dialogue – let’s set aside everyone trying to prove or disprove anything, and just discuss and compare notes, surely this would be much more constructive?

What do you say Yogi, are you game? Come out to play, please…


Warm Regards


Magdoran

Nice post Mag, I'm all for some transparent Gann discussion and critiques too; instead of the 'Emperor's New Clothes' type debates where 'non-believers' are condemned, I'm also glad to see you critically analyse Gann and sift through it instead of swallowing it whole. Even normal TA and EW people could just give price projections and estimates but without a clearly explained theoretical basis for it we have little clue as to what's occurring. I hope this leads to some fruitful discussion.

 

[tech/a]

Re: Which one do you use? Technical or fundamental analysis

Keep posting Teck, appreciate ALL the comments here. Just have to wade through some dirt for the diamonds sometimes.

I don't understand the link you posted to Nick's website though. A bit of cross promotion??

Kenna's

The link is to Techtrader.

Techtrader is a longterm trading method developed in an attempt to help others find a mechanical methodology which could be proven to be profitable by trading it live. The exercise is fully disclosed and has over the years generated much discussion. It is traded continuously with weekly results posted by another member who has kept records since inception (Daryl or dl)
Nick found a seperate place for it on Reefcap as discussion was at the time disjointed.
Neither Nick or myself make anything from it,thats not its intended purpose.

I have no involvement with Reefcap and am simply a contributor.

 

[Sean K]

Re: Which one do you use? Technical or fundamental analysis

Tech, I tried to register but my email address has been banned?? What the? I'm a nice person. Must be because it's hotmail. Oh well.

 

[lesm]

Re: Which one do you use? Technical or fundamental analysis

tech/a,

I wouldn't worry about it too much. T/T stands on its own and is available for public scrutiny, as well as the backgound to its develpment.

Those of us tha have been around for a long time, including the early stock central days are aware of how much time you have contributed to a number of fora, as well as providing assistance and advice to people over the years.

People may not always agree with you, but it would be a boring if they did and non-constructive.

It's interesting that a number of its detractors do not put forward counter approaches, either by presenting alternative systems or running a trading journal.

Non-disclosed approaches should always be treated as circumspect and its interesting that some protaganists are actually seeking commercial gain. So, it is easy to understand why they may wish to attempt to discredit the system or its author. Some cheap shots in this thread, that's for sure.

Keep up the good work and treat it as water off the Duck's back.

Enjoy your holiday in the UK. We can all catch up with you when you return.

Kennas,

The information related to T/T is over 100 pages with a number of associated discussion threads, hence having it in a single location is an easier approach.

Cheers.

 

[Realist]

Re: Which one do you use? Technical or fundamental analysis

It is amusing just how popular this thread is. 28 pages already.

It is a great arguing point that is for sure.

Back to it...

Perhaps T/A vs. F/A has more to do with timeframe.
F/A is far more necessary for long term investors but not much use to the short term trader.
Day traders would be predominately using T/A with perhaps a just enough F/A to reduce the risk of being caught in a bankruptcy.
Then there are those who trade medium term who can't see what all the fuss is about and use both

I still say you can't use both. Trading works, investing works, but I don't believe you can combine both to get even better results. You're only gonna get worse results.

Because they contradict each other. One looks at the true value of a company, one looks at the popularity. I've never heard of a strategy to intersect them both.

You can't have an undervalued popular company.

All you'd end up doing is buying companies that are not too overvalued and are popular, just not too popular - which seems ridiculous. You're finding the middle ground which reduces any advantage you had.

 

[RodC]

Re: Which one do you use? Technical or fundamental analysis

Because they contradict each other. One looks at the true value of a company, one looks at the popularity. I've never heard of a strategy to intersect them both.

Rubbish, used properly TA and FA can complement each other, if you think they only contradict then you really have no idea.

Rod.

 

[Realist]

Re: Which one do you use? Technical or fundamental analysis

Rubbish, used properly TA and FA can complement each other, if you think they only contradict then you really have no idea.

Rod.

Rod, please list 3 companies now which are good TA and FA purchases.

So I can learn from your expertise..


I'll give you one myself - PRG.... do you agree it is??

Thanks..

 

[It's Snake Pliskin]

Re: Which one do you use? Technical or fundamental analysis

I still say you can't use both. Trading works, investing works, but I don't believe you can combine both to get even better results. You're only gonna get worse results.

Why? How?

Because they contradict each other. One looks at the true value of a company, one looks at the popularity. I've never heard of a strategy to intersect them both.

Actually, TA does not look at the popularity of a stock.

You can't have an undervalued popular company.

Popular as in stock prices or popular as in its products?

All you'd end up doing is buying companies that are not too overvalued and are popular, just not too popular - which seems ridiculous. You're finding the middle ground which reduces any advantage you had.

But if the price went up for the time frame you had in mind, that`s all that matters isn`t it?

 

[It's Snake Pliskin]

Re: Which one do you use? Technical or fundamental analysis

Tech, I tried to register but my email address has been banned?? What the? I'm a nice person. Must be because it's hotmail. Oh well.

PM Nick it`s his site Kennas.

 

[eddievanhalen]

Re: Which one do you use? Technical or fundamental analysis

Yep I'm afraid it's rubbish realist. Let's look at 2 examples where TA/sentiment analysis can be used to aid investing and then purely for trading.


Let's assume for a minute you only have enough capital to buy 5 decent investment positions. Let's also assume that there are 10 stocks on the market that meet your FA criteria. And let's acknowledge at least that TA allows you to measure sentiment towards a particular stock at any given time.

Now......5 of the 10 stocks that meet your criteria look very good on paper with nice ratios ,strong growth etc...... , are in a strong sector and have a rising chart (which confirms their strength and potential for further gains). Good examples in recent times include IMD and STS. I invested in IMD in the mid 20's and STS below 50c and still hold. I don't call that trading.

The other 5 of your 10 stocks are the ones you may prefer.........dirt cheap ratios , nice dividend yield but little/no growth and the sector they're in is on the nose. They have poor sentiment and have just been getting cheaper and cheaper.........eg) PBB and CMI in the auto sector in recent years.

If you would honestly rather hold the 2nd group then you are doomed in terms of making superior returns in the long term IMHO.



OK - let's get onto another analogy other than shirts for describing TA. On the markets we have companies that make a nice profit and those that don't. I often "invest" in the profitable companies as they bear less watching and "trade" the speccies that move more on sentiment than anything else - hence the usefulness of TA is even greater in the speccies.

Now you may say that anyone who buys a loss making or speculative company with the intention of selling higher and using sentiment (trading) is an idiot - I say they are using the forces of supply and demand to their advantage.

Back in my previous occupation (as a pharmacist) we had a product hit the shelves in the late 90's called Cellasene. It was one of the many bull$hit products on the market designed to fleece women on the basis of vanity. In my professional opinion it was junk and I told my clients so - but did that stop women flocking to it for a magical cure to cellulite?..........so this is the equivalent of your speccy company (no fundamental basis for buying it as it's junk)

Very quickly Cellasene sold out and was all over the news............there was almost a black market in it for a while there. Sentiment was very much bullish for Cellasene.

Now do you think the guy who came in and cleaned out my stock @$90 a box and later that week flogged this junk at the Vic market for $200 a box was an idiot ??

Cheers,

Ed

 

[Realist]

Re: Which one do you use? Technical or fundamental analysis

Popular as in stock prices or popular as in its products?

Stock prices..


Trading = short term
Investing = long term
Both at the same time = middle term (how long is that?)
Trading = stock price
Investing = buying into a company
Both = buying into a popular but cheap company?
Trading = quick profits
Investing = compounding and tax reduction
Both = quick compounding


Put it this way if you think you can invest short term you are dreaming. There is only one way to invest - LONGTERM.

Secondly if you think you can trade medium term (ie over a year to reduce tax) you are dreaming. The stock price dictates how long you trade for, not you.

So how can you possibly intersect both, please explain what you buy and how long you hold it for, and when you sell it?

Do you use stop losses? or do you reduce tax by holding for 1 year? You sure as hell can't use both.

When do you sell, when the fundamentals change or when the stock price changes? or both?

Anyone who thinks you can trade and invest together is wrong And anyone who thinks investors use charts to asses a companies value is clearly deluded.

You can trade or you can invest you can not do both at the same time with the same purchase.

 

[Realist]

Re: Which one do you use? Technical or fundamental analysis

Now......5 of the 10 stocks that meet your criteria look very good on paper with nice ratios ,strong growth etc...... , are in a strong sector and have a rising chart (which confirms their strength and potential for further gains). Good examples in recent times inclue IMD and STS.

The other 5 of your 10 stocks are the ones you may prefer.........dirt cheap ratios , nice dividend yield but little/no growth and the sector they're in is on the nose. They have poor sentiment and have just been getting cheaper and cheaper.........eg) PBB and CMI in the auto sector in recent years.

If you would honestly rather hold the 2nd group then you are doomed in terms of making superior returns in the long term IMHO.

Well Ed, I think you are wrong.

You say CMI is a bad buy because of poor sentiment. As you may or may not know I bought CMI Ed.

It is up 30% in the past month!!

Would you buy it now??


And look at PBB. Good to.



IMD is not a good fuandamental investment.

SDS is close but I would not invest in it though.


What do you think of PRG?

 

[eddievanhalen]

Re: Which one do you use? Technical or fundamental analysis

I realise I am never going to win an argument with you -I'm a Realist : but you're looking at things selectively. If you want to try and pick bottoms in falling stocks as a profession then good luck - the point about CMI and PBB is that purely in PER terms they have looked cheap all the way down over the last few years. I'm not talking the last few weeks - everything has bounced the last few weeks.

PRG looks a decent company to me and is certainly not on the nose in sentiment terms so I wouldn't try and convince you not to buy it. It's not enough of a stand out for me though. I think overall you're a bit too focussed on ratios without looking at the growth potential though.

Ed

 

[yogi-in-oz]

Re: Which one do you use? Technical or fundamental analysis

Hello Yogi,


Thanks for your comments, much appreciated.

I have essentially invited you to open up a little to have an interesting dialogue – let’s set aside everyone trying to prove or disprove anything, and just discuss and compare notes, surely this would be much more constructive?

What do you say Yogi, are you game? Come out to play, please…


Warm Regards


Magdoran

Hi Magdoran,

...... a second invitation will not be required ...

Let's take it to:

https://www.aussiestockforums.com/forums/showthread.php?t=3651

-----

Just for the record, there's never been any promotion
on this forum for the astrotradiing package and there
probably will never be any such promotions .....

..... simply because this package is not available to
Aussie traders, so our target market is ALL export-
oriented (more than 20 countries to date, in fact).

So, what would be the point of pushing a sales
barrow in here?

happy trading

yogi

 

[It's Snake Pliskin]

Re: Which one do you use? Technical or fundamental analysis

Realist,
First there is this:

Put it this way if you think you can invest short term you are dreaming. There is only one way to invest - LONGTERM.

Then:

The stock price dictates how long you trade for, not you.

Then:

It is up 30% in the past month!

So you are fundamental and believe investing is long term but seem to be influenced by the short term moves that theoretically you cannot realise until after 1 year to receive a tax benefit for the hassle of buying into the company.

Sorry I just don`t understand your logic.

My question for you:
If the stock dictates how long you hold for, and that may be less than 1 year so no tax benefit; how do you know it is time to get out?