# Fundamental Analysis - The process of stock picking



## dreamxite (6 September 2015)

I guess I haven't been clear when i made a post previously about the challenges and obstacles in stock investing.

Basically I like to find out if others have come across any challenges, obstacles or frustration during the process of stock picking. That is from finding & screening opportunities or ideas, research, analysis to valuation, making buy decision, portfolio allocation/composition etc. This process also include decision making in every stage of the investing from when to buy or sell, to buy or not to buy etc. 

Personally, I think the challenging part for me is the research part. Trying to understand the business side and do a deep research, the ability to find information is a frustrating one and analysing those information after you got them.

Just want to see if others have any challenges in any stage of the process or the whole process is an obstacle that prevent you from starting at all, i.e. not time to learn etc. Cheers


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## Triathlete (6 September 2015)

dreamxite said:


> Personally, I think the* challenging part for me is the research part*. Trying to understand the business side and do a deep research, the ability to find information is a frustrating one and analysing those information after you got them.
> 
> Just want to see if others have any challenges in any stage of the process or the whole process is an obstacle that prevent you from starting at all, i.e. not time to learn etc. Cheers




I actually use a paid service advisory firm whose business it is to analyse and  find sound companies based on Fundamental analysis as I do not have the time to do it myself.

Once I have this list of Fundamentally sound companies I use my Technical analysis skills to ensure they are being backed up technically and after that process I may then invest in the companies.

This process works well for me.


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## Boggo (6 September 2015)

Triathlete said:


> I actually use a paid service advisory firm whose business it is to analyse and  find sound companies based on Fundamental analysis as I do not have the time to do it myself.
> 
> Once I have this list of Fundamentally sound companies *I use my Technical analysis skills to ensure they are being backed up technically* and after that process I may then invest in the companies.
> 
> This process works well for me.




Same here for my SMSF.

StockDoctor narrows the market down to a current list of about 460 stocks and an Amibroker weekly scan has proven to be a worthwhile process with that list.
Currently the system is inhibited by the index filter.


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## CanOz (7 September 2015)

Boggo said:


> Same here for my SMSF.
> 
> StockDoctor narrows the market down to a current list of about 460 stocks and an Amibroker weekly scan has proven to be a worthwhile process with that list.
> Currently the system is inhibited by the index filter.




Some good stuff presented at noosapalooza regarding the use of fundamental research in tandem with a systematic approach....very encouraging results, however I believe they were still testing in order to get a larger sample.


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## Porper (21 September 2016)

Have any of you fundamental guys had a look at a company called Simply Wall Street (https://simplywall.st)

To a mostly technical analyst like myself who hates reading through reports it seems pretty comprehensive and easy to understand. Any flaws anybody can spot?


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## craft (21 September 2016)

Porper said:


> Have any of you fundamental guys had a look at a company called Simply Wall Street (https://simplywall.st)
> 
> To a mostly technical analyst like myself who hates reading through reports it seems pretty comprehensive and easy to understand. Any flaws anybody can spot?




I haven’t.  I’m only interested in raw data not the interpretation of it.

It would be like you relying on somebody else to interpret price information for you. – I bet you are more interested in just reliable accurate raw price data.


I doubt that a universe of “fundamentally superior” stocks will add to a technical approach. Actually I suspect it will detract.  The volatility that TA should seek to harvest occurs mostly where there is too much uncertainty for FA to be of any use - the more fundamentally superior and understood the more bounded the price discovery is in the market. If your a good trader go for the inferior stocks - that's where the movement will be.


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## Boggo (21 September 2016)

Porper said:


> Have any of you fundamental guys had a look at a company called Simply Wall Street (https://simplywall.st)
> 
> To a mostly technical analyst like myself who hates reading through reports it seems pretty comprehensive and easy to understand. Any flaws anybody can spot?




Unfortunately the information base is still delayed information of past performance hopeful future performance and meanwhile certain aspects within may have changed significantly.

Regardless of how the fundamentals are analysed the other consideration is the accuracy of the information, a few of many that have existed that come to mind are Allco, ABC Learning, Westpoint, Centro, Storm Financial, Opes Prime and Babcock & Brown.

I was an indirect victim of Opes Prime via my accounts at the time through TraderDealer. I would have to severely **** up technical analysis and catch way too many falling knives to even come close to that sort of loss again.

Only directors can polish a turd


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## craft (21 September 2016)

Boggo said:


> Unfortunately the information base is still delayed information of past performance hopeful future performance and meanwhile certain aspects within may have changed significantly.
> 
> *Regardless of how the fundamentals are analysed* the other consideration is the accuracy of the information, a few of many that have existed that come to mind are Allco, ABC Learning, Westpoint, Centro, Storm Financial, Opes Prime and Babcock & Brown.




I see you are now throwing in an unlisted dodgy broker that bit you on the bum otherwise you must have written that line a thousand time now - do you ever get tired of it?  The bolded bit is what you consistently misinterpret about Fundamental Analysis - Used intelligently it can get you ahead of the ball game and tell you a lot more then directors/marketing/promoters/market momentum etc are telling you. Hey the principals can even be used to alert/avoid you taking unnecessary counter party risk.


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## Boggo (21 September 2016)

craft said:


> - *Used intelligently* it can get you ahead of the ball game and tell you a lot more then directors/marketing/promoters/market momentum etc are telling you.




Would love to see how you can use misleading/inaccurate/false information intelligently, unless you have a way of identifying it and avoiding it.

All the ones I have mentioned were from the era when I thought this stuff could be trusted and I based everything on it, I have since found a more accurate alternative.


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## craft (21 September 2016)

Boggo said:


> Would love to see how you can use misleading/inaccurate/false information intelligently, unless you have a way of identifying it and avoiding it.
> 
> All the ones I have mentioned were from the era when I thought this stuff could be trusted and I based everything on it, I have since found a more accurate alternative.





How accurate are those who's foot steps you are following with TA? what analysis do they use? Getting off anything that moves down does seem to make sense for you and worth the possible whipsaws - I'm glad you have found a way to keep yourself safe - but boy I do get sick of you laying the boot into FA because you couldn't apply it.

Like I say I don't think a superior FA universe will improve a good technical ability. But if somebody thinks a stock selection universe can increase return and does go the track of sub-contracting FA to a service like Porper referenced - I would suggest not having faith in anybody else's interpretation of FA unless you can fully understand their recommendations yourself. In that circumstance a technical overlay for safety more so than performance gain is a logical protection.


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## galumay (21 September 2016)

Spot on craft, furthermore no one with any level of understanding of company financials would have held positions in any of the companies he mentions.

I guess that lots of brokers and advisors give FA a bad name by implying they use it as a basis for their research - in most cases that is patent nonsense.


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## Boggo (21 September 2016)

craft said:


> ....but boy I do get sick of you laying the boot into FA because you couldn't apply it.




Would hate to be cause of you getting sick, maybe just ignore my posts if you have difficulty with the facts of the past if you see the facts as laying the boot in.

That stock you didn't like in my earlier post, just remove that and replace it with Sons of Gwalia.

Maybe just give ASIC a call too and tell them that they no longer need an expensive department to monitor the behaviour of company directors and reporting procedures, tell them that it's unfair to be laying the boot in because of past behaviour and directors have promised to be good little boys.
Tell them to instead on focus on those nasty and annoying little people who work on reality and use actual data as a guide, they are shifty little buggers with foot fetishes.


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## craft (21 September 2016)

Boggo said:


> Would hate to be cause of you getting sick, maybe just ignore my posts if you have difficulty with the facts of the past if you see the facts as laying the boot in.
> 
> That stock you didn't like in my earlier post, just remove that and replace it with Sons of Gwalia.
> 
> ...




What can you say - I got nothin!!!!

I think I live on a different planet and I should just head back there.


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## Triathlete (21 September 2016)

craft said:


> How accurate are those who's foot steps you are following with TA? what analysis do they use? Getting off anything that moves down does seem to make sense for you and worth the possible whipsaws - I'm glad you have found a way to keep yourself safe - but boy I do get sick of you laying the boot into FA because you couldn't apply it.
> 
> Like I say I don't think a superior FA universe will improve a good technical ability. But if somebody thinks a stock selection universe can increase return and does go the track of sub-contracting FA to a service like Porper referenced - *I would suggest not having faith in anybody else's interpretation of FA unless you can fully understand their recommendations yourself.* In that circumstance a technical overlay for safety more so than performance gain is a logical protection.




*You may suggest it but that does not mean you are correct either*. If some one has the time to learn FA then fair enough if that is what they like to do and can then make it work for their investment timeframe.

 I also fall into the category of subscribing for my FA and I do not understand the ins and outs but understand the methodology that is being used to select the most financially  healthy companies   and since I spent my years  understanding technical's and how combining the two FA/TA I can profit from the market that is all I require.

I also see it not just as a safety overlay but also to advance my performance with market or stock timing ..... entering or exiting at a more opportune time for whichever timeframe I may be using.....


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## Boggo (21 September 2016)

galumay said:


> I guess that lots of brokers and advisors give FA a bad name by implying they use it as a basis for their research - in most cases that is patent nonsense.




Enlighten me please, in your opinion what might these brokers have been using as basis for their research ?


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## McLovin (21 September 2016)

Boggo said:


> Enlighten me please, in your opinion what might these brokers have been using as basis for their research ?




Do you carry a wallet size version around of that, for dinner parties etc?


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## Ves (21 September 2016)

Boggo said:


> Enlighten me please, in your opinion what might these brokers have been using as basis for their research ?



Turn the chop mate,  a few people on this very forum put an avoid on DSH in the same time period and I can tell you now they weren't all techies.


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## Boggo (21 September 2016)

Triathlete said:


> *... and since I spent my years  understanding technical's and how combining the two FA/TA I can profit from the market that is all I require.
> 
> I also see it not just as a safety overlay but also to advance my performance with market or stock timing ..... entering or exiting at a more opportune time for whichever timeframe I may be using.....*



*

Exactly why I use approx 460 of StockDoctor safer stocks and I apply TA to those.
(At the moment I am actually running the All Ords constituents of about 490 stocks in parallel).

At the first sign of a weekly chart technical heads up I find that I actually am ahead of the inevitable FA caution or warning.

For galumay - https://www.aussiestockforums.com/forums/showthread.php?t=6931&page=5&p=867465&viewfull=1#post867465

and - https://www.aussiestockforums.com/forums/showthread.php?t=6931&page=5&p=873098&viewfull=1#post873098

(click to expand)*


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## systematic (21 September 2016)

Forget F/A vs T/A.  Instead, it's you're psyche against the market.  Or rather, it's actually you vs you.  

Price data and financial statement data (and other data, for that matter) contain useful information about stocks that you can (theoretically) exploit to potentially, 'beat the market'.  As I've posted before, data is data.  It's not F/A vs T/A...on my planet it's quantitative vs qualitative.  And I'm in awe of anyone who can do this (beat the market) via a qualitative approach - which is why I hold craft in high esteem as the, 'Aussie Buffett'  Same would go for any chartist with a qualitative approach and similarly impressive results.

To act as if price is more "pure" and therefore puts you more on the right track is absurd (and something I've seen said on chartist type forums).  It's a ridiculous idea.  Proven by the fact that most traders / investors (call yourself what you will) can screw themselves over quite adequately with price data, charts and T/A just as much as the would be investor poring over the footnotes in a financial statement.

Look at a chart, read an income statement, listen to the news or subscribe to a service...it doesn't really matter.  That's not what is going to help you.  The odds are that you will not beat the market.  Because of you.




_N.B.  Comment inspired by, but not directed at Boggo or craft; simply made in the spirit of hoping to provoke critical thought in interested readers._


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## cynic (21 September 2016)

When my trades start going wrong, I know it can only mean one thing, namely, my dartboard is long overdue for servicing!


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## Boggo (21 September 2016)

cynic said:


> When my trades start going wrong, I know it can only mean one thing, namely, my dartboard is long overdue for servicing!




There may be a technical issue there cynic, is the centre of the bull precisely the regulation 5' 8" off the floor


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## McLovin (21 September 2016)

Ves said:


> Turn the chop mate,  a few people on this very forum put an avoid on DSH in the same time period and I can tell you now they weren't all techies.




You forget who you're dealing with. This is the guy who used TLS at $8 as an example of yield investors getting burnt.

And remember the TGA saga?


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## cynic (21 September 2016)

Boggo said:


> There may be a technical issue there cynic, is the centre of the bull precisely the regulation 5' 8" off the floor




Some might argue that it's positioning is fundamentally floored! But that's just a technicality that I'll be discussing with my analyst!


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## Boggo (21 September 2016)

McLovin said:


> You forget who you're dealing with. This is the guy who used TLS at $8 as an example of yield investors getting burnt.
> 
> And remember the TGA saga?




and how are both of those going for fundamental investors  

Anyway, enough of this nonsense. There are two ways of doing this beating the market bizzo, one headed in  the same direction as galumay's SGH investment in the links in my earlier post #18 and the other one (TA) is working for me.
I'll leave it that, each to what works for them, FA solely on its own didn't for me.

Nighty night.

(click to expand)


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## McLovin (21 September 2016)

Boggo said:


> and how are both of those going for fundamental investors




TGA doubled from when you were shrieking like banshee a few years ago about it. Funny how you never acknowledged that in your "beating the market bizzo" spiels (your chart starting in 2014, when you made the comments in 2012 is, I guess, understandable). TLS as a yield stock at $8? Hilarious. 



Boggo said:


> FA solely on its own didn't for me.




No ****.


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## InsvestoBoy (22 September 2016)

Boggo said:


> Enlighten me please, in your opinion what might these brokers have been using as basis for their research ?




Good question! 

FWIW, the IPO price of DSH was ~$2.20 from memory. I wasn't on this forum at the time but if you go back to the thread like I just did, before the IPO had ever generated a chart, there was people saying stuff like "IMO you would have to have a death wish to invest in this"  

There was an DSH Annual Report released 28th June 2014 (price was ~$2) and the next on 29th June 2015 (still around $2). Even for someone like me who knows really essentially nothing about reading an annual report, there were obvious huge red flags:
- Low net and operating profit margins
- Negative and declining free cash flow (-35M) for 2015 ann report
- Low and declining current ratio (1.23) for 2015 ann report
- Huge increase in debt/equity ratio for 2015 ann report
- and most damningly, the operating cash flow went negative, while the net income somehow magically shot up by nearly 100%.

Even if you were a holder on 1 July 2015 you could have sold for ~$2 per share without ever looking at a chart from those red flags, well before price collapse started.


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## So_Cynical (22 September 2016)

Boggo said:


> Exactly why I use approx 460 of StockDoctor safer stocks and I apply TA to those.
> (At the moment I am actually running the All Ords constituents of about 490 stocks in parallel).
> 
> At the first sign of a weekly chart technical heads up I find that I actually am ahead of the inevitable FA caution or warning.
> ...




On the subject of Slater and Gordon - I called it on the 1st of April.



So_Cynical said:


> (1st-April-2015) I'm inclined to think that the Quindell purchase is a bad deal, unlike all the other acquisitions this one is big enough to really hurt SGH, well hurt the shareholders because they are the ones putting up the bulk of the money, its a risky move simply due to the size.
> 
> Its been quite a while since a major Aussie company made a massive blunder buying something foreign so i reckon we are overdue, its like the roll up expansion is more important than the safety of shareholder funds. feels like SGH is taking us to a crap table hoping to win big with our money.




No TA or FA needed, just wish i had followed my own thinking, wanted to wait until the new tax year...


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## galumay (22 September 2016)

I am with craft, i am out of here. You cant have a discussion with people that make so many logical fallacies and seemingly are incapable of rational discussion.

Using one of my errors of judgement to try to justify his personal ignorance of FA is about as silly an argument as I have ever seen! 

Its a pity that another thread has been torn off topic by the religious and evangelical attachement to strategies for investment and trading. Its one of the most positional arguments going and its entirely pointless.


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## craft (22 September 2016)

Triathlete said:


> *You may suggest it but that does not mean you are correct either*. If some one has the time to learn FA then fair enough if that is what they like to do and can then make it work for their investment timeframe.
> 
> I also fall into the category of subscribing for my FA and I do not understand the ins and outs but understand the methodology that is being used to select the most financially  healthy companies   and since I spent my years  understanding technical's and how combining the two FA/TA I can profit from the market that is all I require.
> 
> I also see it not just as a safety overlay but also to advance my performance with market or stock timing ..... entering or exiting at a more opportune time for whichever timeframe I may be using.....




Ok deep breath.

I have said that if you use a third party FA supplier and you do not fully understand and agree how they come to their conclusions you should overlay TA for safety, lest you ride somebody else's 'potentially' poor judgement into the ground on misplaced trust in their judgement and ability. So I am confused what you are actually disagreeing about. Do you think a TA overlay shouldn't be used? Do you think you should just fill your portfolio with a dozen or so of their recommendations and wait for there next advice. No I don't think that is what your action's suggest, so what is our point of disagreement in which you are saying I'm not correct?

I have said that a good technical ability will probably not be improved by selection of a fundamentally superior universe.
Do you know the split in performance contribution between your universe selection and your technical Overlay? Have you tested whether your technical abilities could harvest more profit in a more volatile universe which arises where fundamental uncertainty abounds?  From the argument in your post I think you have misinterpreted my point.

I have not posted anything against TA.

Yes I have made a point about combining them. Some news based reaction strategies lend themselves to combining the two but generally I think the individual advantages of the two disciplines subtract rather than add value to each other. Yes that's an opinion but it's not a chump change opinion. Your argument has not refuted it. The question is does the FA universe selection aid or detract from the technical overlay.  If your technical abilities are good why not drive the speed of the internal compounding by widening the universe to faster moving more volatile price action that arises from fundamental uncertainty in an 'inferior' FA universe.

I have responded to someone that always attacks FA because of his lack of understanding and implementation of it. That is not an attack on TA.


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## Value Hunter (22 September 2016)

By the way good to see you back Craft.


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## Triathlete (22 September 2016)

craft said:


> I have responded to someone that always attacks FA because of his lack of understanding and implementation of it. That is not an attack on TA.




I do not know how you come to that conclusion since I use FA in my own analysis.....

I certainly have had disagreements with entry points into a particular stock that have been put forward by pure FA cousins....but this is just an opinion within different investment styles and based on my own TA analysis....


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## craft (22 September 2016)

craft said:


> I have responded to someone that always attacks FA because of his lack of understanding and implementation of it. That is not an attack on TA.






Triathlete said:


> I do not know how you come to that conclusion since I use FA in my own analysis.....
> 
> I certainly have had disagreements with entry points into a particular stock that have been put forward by pure FA cousins....but this is just an opinion within different investment styles and based on my own TA analysis....




That line was explaining why I responded to Boggo. The other response I added to this thread was in relation to Porper's query.  I'm not sure what you were responding too - but I think you may have misinterpreted what I was saying to either of them. Just trying to put it in context for you. Any interest in addressing the rest of the post which was directed to you now that you have chimed in?


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## Klogg (22 September 2016)

dreamxite said:


> I guess I haven't been clear when i made a post previously about the challenges and obstacles in stock investing.
> 
> *Basically I like to find out if others have come across any challenges, obstacles or frustration during the process of stock picking. That is from finding & screening opportunities or ideas, research, analysis to valuation, making buy decision, portfolio allocation/composition etc. This process also include decision making in every stage of the investing from when to buy or sell, to buy or not to buy etc. *
> 
> ...




Going back to the original question (in bold). Your post suggests that you're using some form of fundamental analysis, so I'll answer as best I can making this assumption.

I can break this down into two components (although it can be broken down further). Finding ideas to research, and then knowing what to look for once the ideas are found.

*On finding ideas*
I typically have a few approaches here, but the main ones are:
- Using forums like ASF to see what like-minded people are looking at
- Using filters against listed companies based on any metrics imaginable (P/E, Book Value, etc.)
- Looking at companies trading at 52week lows
- Reading yesterday's ASX announcements for anything particularly interesting (questionable value, but I'm testing it)

That usually helps me generate sufficient ideas to research


*On researching ideas*
There's almost an unlimited number of ways to view a company. What I do (not necessarily what's right), is to understand the industry and then know what to look for.
For example, I might be looking at a mining services company currently. All the basics of my research might check out (management, debt levels, etc.) so no obvious risks.

The next part for me is filtering the important from the unimportant. Should I be looking at the cyclicality of the industry and how they've performed previously? Or is there some sort of key client risk? Is there a change of management that has created uncertainty reflected in the share price?

This generally takes me a long time to get comfortable (2-3weeks minimum). However, I build that knowledge base once and it can holds me in good stead for a long time... Once I become familiar and comfortable with a company, and I have a rough idea on valuation/expected cash flows, then I can make an informed decision.

My biggest challenge is that I'm time bound. Full time job, organising a wedding and some additional community responsibilities on top of it all. To get around this, I wake up early (5:30am) and hit the annual reports for 1.5 to 2hours.  Still, I'm now working on freeing up some more time...



As an aside - I'm currently reviewing my own portfolio allocation, so I don't really want to go into my thoughts, as writing them out in a public forum might make me bias toward one approach over another.

I hope this helps...


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## skc (22 September 2016)

dreamxite said:


> Personally, I think the challenging part for me is the research part. Trying to understand the business side and do a deep research, the ability to find information is a frustrating one and analysing those information after you got them.
> 
> Just want to see if others have any challenges in any stage of the process or the whole process is an obstacle that prevent you from starting at all, i.e. not time to learn etc. Cheers




Don't be discouraged. It's not meant to be easy or straight forward... and there is no single right or wrong answer. For some people the most difficult part is generating the idea, for others it might be the action to buy/sell, and for some it would be the management aspect. Nothing's worse than having the right stock but only to sell because you got cold feet and tried to take a small quick profit. 

Being good at investing requires you to be both alert and relaxed at the same time. At the beginning phase, it's not easy to distinguish between a temporary dip in business performance or a major structural change.



Boggo said:


> Enlighten me please, in your opinion what might these brokers have been using as basis for their research ?




Not directly related to DSH, but it's worth noting that a research analyst doesn't work in a vaccum and it can be difficult for them to be completely impartial for a number of reasons. For example, to make a call that's very different to consensus, he/she needs to be absolutely sure of being right. If the wrong non-consensus call is made, the career may be on the line. But if the view is simply inline with others, he could always said that the whole market got it wrong. Also, the research is often but one part of a larger broker house.. and the organisation often wants to maintain good relationship with the company they are covering for future, more lucrative businesses (e.g. capital raising, acquisitions). So while there's supposed to be Chinese walls separating the different arms, the research analysts may not always be purely independent.

Here's a good article on this issue. A BoA analyst who first called sell on SGH ended up leaving her job because she experienced too much pressure from her non-consensus call. 

http://www.afr.com/business/the-sellside-sold-out-on-slater--gordon-20160302-gn8hw2



craft said:


> I doubt that a universe of “fundamentally superior” stocks will add to a technical approach. Actually I suspect it will detract.  The volatility that TA should seek to harvest occurs mostly where there is too much uncertainty for FA to be of any use - the more fundamentally superior and understood the more bounded the price discovery is in the market. If your a good trader go for the inferior stocks - that's where the movement will be.




I don't think I can conclude one way or the other whether it's a plus or minus. TA trader doesn't necessarily want volatility... a smooth trend without major gap/tail risk is probably more desirable. The question is whether an FA filter can offer that - and at a guess I'd probably say yes if the FA is good.

Also, at a guess, for most traders there are usually more trade candidates than available capital or risk tolerance. So a vast enough FA filter would probably not result in too many opportunities forgone. 

Interesting discussion you have in the other thread about PAC. It's a stock I've looked at in recent times but I find that I don't have enough knowledge to buy (and hold) it with the conviction required. But it's generated enough for me to say it has potential... and in such case I use TA for a trade. The TA is protection for my weak FA, while my weak FA is a filter for trades with potential catalyst. If it sounds unscientific that's because it isn't!


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## craft (22 September 2016)

skc said:


> Interesting discussion you have in the other thread about PAC. It's a stock I've looked at in recent times but I find that I don't have enough knowledge to buy (and hold) it with the conviction required. But it's generated enough for me to say it has potential... and in such case I use TA for a trade. The TA is protection for my weak FA, while my weak FA is a filter for trades with potential catalyst. If it sounds unscientific that's because it isn't!




Very interesting and ironically or maybe even hypocritically to what I have posted I'm in exactly the same situation with PAC - I will implement TA if needed to supplement the FA as I continue to try and get a handle. I've also done the same with other stocks - CCP springs to mind because I just can't get to the comfort level I need to be a quantitative strong hand but I really wanted to own the company at times. But adding the TA ultimately has a cost compared to buy and hold if the company actually is quality and bought at the right price. That cost often means I would be better off looking elsewhere for something that I can be comfortable with - yet here I am still researching PAC..... 

I think the other point to make in understanding this paradox is for me at least the trade management is never mixed - If its TA entered position I am prices bitch and will exit when she say regardless of what my fundamental inclination may be and visa versa.


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## Triathlete (22 September 2016)

craft said:


> I think you may have misinterpreted what I was saying to either of them. Just trying to put it in context for you. Any interest in addressing the rest of the post which was directed to you now that you have chimed in?




I think you might be right Craft...I will respond later ...!!


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## craft (22 September 2016)

skc said:


> Interesting discussion you have in the other thread about PAC. It's a stock I've looked at in recent times but I find that I don't have enough knowledge to buy (and hold) it with the conviction required. But it's generated enough for me to say it has potential... and in such case I use TA for a trade. The TA is protection for my weak FA, while my weak FA is a filter for trades with potential catalyst. If it sounds unscientific that's because it isn't!




ps the liquidity on PAC is crap it could get a bit crowded:


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## skc (22 September 2016)

craft said:


> ps the liquidity on PAC is crap it could get a bit crowded:




For your portfolio size...every stock has crap liquidity.


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## craft (22 September 2016)

skc said:


> For your portfolio size...every stock has crap liquidity.




That's not true - but I could do without any competition from a 'gun trader' on PAC if starts to run. I'm so sloooww. Perhaps you could agree me a gentlemanly headstart


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## skc (22 September 2016)

craft said:


> That's not true - but I could do without any competition from a 'gun trader' on PAC if starts to run. I'm so sloooww. Perhaps you could agree me a gentlemanly headstart




Lol. Pre-mature accumulate all you like. This would be one of those rare weekly trades that I take (if I do take it) which means small size and slow entry/exits as well.

PAC reminds me of HFA from 5 years ago. The HFA turnaround in price was some 2 years in the making and prices ranged from 60-90c (50% range which would throw out most traders). 

Anyhow... enough about PAC here.


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## icemanmelb (29 September 2016)

Let me add my 20c worth to this discussion as I think I've lost a bit of $$$ to know a little about these topics. For me, there are so many ways to skin a cat but ultimately, it's about finding an edge that suits your personality and lifestyle.

I know guys who are successful in Fundamental analysis and some who are successful in Technical analysis. I also know guys who watch the order flow in the trade ticker and make good money out of it.

All these require time. I called it the tour of duty but pick a metaphor that suits. It's also a process in finding what works in the market. Remember the market is always changing so what worked say pre GFC is not going to work post GFC [Technically nor fundamentally].

Now theres Negative rates and Global & political uncertainly so the process will have to change again.

So even if someone shows me a successful system/method, if it doesn't suit my personality nor time frame, it won't work for me. [eg: I've got a short time frame of say 3 hours so something that takes weeks might be too long for my trading account]

Hope that adds more confusion before enlightenment.

Ice


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