# Fundamental vs. Technical



## Captain_Chaza (31 March 2007)

"Fundamental v Technical " 

I wrote this article nearly a decade ago
I can't see that anything has changed since

“No man can serve two masters,” wrote Saint Matthew. 

There are two basic approaches for deciding the future direction a sailing ship of any size and design might move. 

The fundamentalist approach is faced with a massive information-gathering problem. Every fact relevant to the craft must be known and weighted according to its importance and its price equation. The skipper here assumes his own interpretations and his known facts are better than average. 

He will analyze all the facets of world politics and its effects on the global economic community on a regular basis. He will study each member of the global exchange from currencies and interest rates to commodities and raw materials, to the latest developments in design technologies in the multitude areas of human activity.  

He then turns his head to the economic statistics price/earning ratios, dividend yields, company reports on as many ships as he can mentally digest and consume as much written matter time allows. This is truly an awesome task for any skipper even those with a crew of skilled academics on each floor of a high-rise office building.  

Unfortunately for the fundamentalist by the time he receives most of his information and statistics it is hopelessly out of date. By the time he evaluates and mixes up his recipe for a rational decision the moon has moved the tides. He often complains he is living in an irrational world and that the world has just gone temporally mad. Naturally, “She’ll be right in the long term,” he always says.  

How often does a ship move in the opposite direction immediately after a good or bad report? Since information is never leaked in this fairest of all sports with its strong rules of fair disclosure, he will often claim an event has already been factored into the equation by the gamblers. How often does he cling to the skimpiest of fundamental good news as the price descends deeper and deeper south?  

Because this has happened so often in the past it has even turned some fundamentalist heads inside out and they have developed a reverse fundamental approach.  

This down-under, upside-down fundamentalist or contrarian viewpoint has surprising much to offer. Here the skipper has acknowledged the fact that punching the latest fundamentals into his computer will result in garbage. 

He has accepted the fact that everything has been leaked and that it is not a fair game at all, but All-Out War. 

Also, in view of his past experiences he has decided that he hasn’t been as close to the good information chain link as he would have liked and refuses to be fair game in the future.  

  The Technical believes that no fundamental fact whatsoever matters unless the masses have this shared psychology and provides the only mechanism to measure this irrational and emotional component. 

  Any experienced campaigner knows and the novice will soon discover how deeply the counter productive aspects of tension, anticipation and anxiety alter the way a skipper sails the seas. Usually directly proportional to the funds committed. 


The technical believes the oceans are extremely efficient with its global sharing of information and regularly observes the actions of others, not their talk. 

  The technical can put objectivity at the helm and control the nemesis of all sailors at sea on the Global Exchange namely, emotion and rationale. They provide the mechanism to set entry and exit points, set risk/reward ratios and even foster a safety and risk management approach to sailing in all types of sea and weather conditions. 

 Technical allows the skipper to step back and gain a better insight and perspective of the Global Exchange and carry out numerous ship surveys. A chart is worth more than a thousand words. 


The technical viewpoint encompasses every participant’s knowledge and beliefs about the future direction a craft may head next. It takes into account all the known facts as well as the human interpretation of those facts. More importantly it also takes into account fundamental news not yet known to the general public and is right up to date. 



Finally, the fundamental academic with the I know all attitude who has ridiculed and under estimated his technical opponent for so many years, now believes he has room on board for some technical. 


Unfortunately, as more and more skippers sail on technical, more ships are now moving accordingly, there is no room onboard for any fundamentalist with his long term excuse and his minuscule amount of up to date facts. He is in fact a most dangerous dinosaur to have onboard. He must be avoided at all costs and only regarded as fair game. Whether he is a bull or a bear he cannot change his spots and will always cloud a skipper’s judgment and coarse many costly delays.  

Sailing in this modern era is All about the 

Technical verses Technical.


----------



## wabbit (31 March 2007)

*Re: Fundamental v's Technical*

FA and TA are tools; useful tools to have in your toolbox.  The knowlegable trader/investor chooses the right time to use each tool.

“No man can serve two masters,” wrote Saint Matthew.

TA and FA are not masters...
I like to think of it more simply...

"If the only tool you have is a hammer, eventually everything looks like a nail!" wrote I.


wabbit


----------



## tech/a (31 March 2007)

*Re: Fundamental v's Technical*

Technical OR Fundamental,doesnt matter.

How its applied (either) however does.
Many Technical writers have attempted to trade and failed dismally... Shwagger was one I know of.
Many Fundamental analysts make recommendations that fail.

Analysis without application is like a ship full of academics who have studied sailing for years but have never sailed a ship.


----------



## motorway (31 March 2007)

*Re: Fundamental vs Technical*



> Analysis without application




Application is something that can be constantly improved
The principles upon which correct analysis is built from

can only be  (re) discovered . and kept at the centre..

Once principle is lost... We have better and better applications of
dubious value.. The splitting of hairs..

Fundamental or technical

In the end what matters matters
what doesn't is immaterial

I would not go as far to say that ALL Fundamental consideration is Void


It is the monkeys Vs Shakespeare

If We have some inkling that We might have a Shakespeare

It certainly narrows the credible universe
of possibilities and Helps separates noise from signal

motorway


----------



## Knobby22 (31 March 2007)

*Re: Fundamental vs Technical*

It is the fundamentals that move the market long term.

3 points

It is true there are an ocean of facts and the fundamentalist cannot hope to keep abreast of them all however.. if he studies only a few companies, preferably small companies that are overlooked by the big boys, often illiquid companies, and understands them to a high level and the industry the company works in, then he can beat technical analysis for that company.

Secondly, good fundamnetal analysis does not consist of typing historical facts into a computer, it is to predict the future. In fact, if you develop the skill of analysing fundamentally then you will know when the company is doing something wrong and be selling into the technical traders. 

Finally, most good fundamental traders are still aware of unusual market movements and will sell or buy if they are suspicious. They in other words ise a small amount of technical analysis in their armoury.

Tech/a is right, there are many fundamnetal and technical traders that do not make money. It is a reflection of their application rather than the general method.


----------



## Knobby22 (31 March 2007)

*Re: Fundamental vs Technical*

Another point. A technical trader cannot risk more than a certain percentage of their capital. A good fundamental trader might risk 50%! This is because he is confident and when the price triples he can get wealthy.


----------



## Captain_Chaza (31 March 2007)

*Re: Fundamental vs Technical*

I would be happy to take on You or/and any Fundanentalist in a race of any kind 

Time frames and rules to be agreed by both sides

Salute and Gods' speed


----------



## BSD (31 March 2007)

*Re: Fundamental vs Technical*

Sounds great Chaza 

No more need to study anything beyond graphs and patterns

Does this amazing insight extend to predictions of weather patterns, agricultural yields, commodities prices and grand final winners?

Why bother studying anything when we can do it all with graphs?

Sack the analysts and instos - they produce nothing that a bunch of 22 y/o Commsec punters couldnt beat dealing in Uranium shares. 

Of course - some investors need to swing a bigger line than $50K

Name 5 Technical Analysis based funds dealing on the ASX bigger than $1bn

Maybe there is an amazing opportunity for you?

Providing some statistics rather than b*llsh!t seafaring analogies may help your cause


----------



## motorway (31 March 2007)

*Re: Fundamental vs Technical*



Knobby22 said:


> It is the fundamentals that move the market long term.
> 
> 3 points
> 
> ...




And If We scan the whole market and can recognise accumulation when We see it.. Then We can benefit from that accurate Fundamental analysis that the few can do in the even fewer number of companies that they can keep abreast of..

We maybe have every insider and every fundamentalist working for Us 
Even though they don't mean to..

What ever they "know" and whatever their intention..
When they act when they first accumulate to speculate
When they Buy or Sell... The action and subsequent action of the particular stock reveals their purpose..

A nod is as good as a wink  

Accumulation----> markup----->Distribution------>Markdown..

Each has it's footprint...



motorway


----------



## Knobby22 (31 March 2007)

*Re: Fundamental vs Technical*

I don't need to prove anything Chaza.

As you are a new person to this board I will be interested in your analysis and after a year, if I respect you, then we may cross swords, so to speak.

Good comments BSD.


----------



## Knobby22 (31 March 2007)

*Re: Fundamental vs Technical*



motorway said:


> And If We scan the whole market and can recognise accumulation when We see it.. Then We can benefit from that accurate Fundamental analysis that the few can do in the even fewer number of companies that they can keep abreast of..
> 
> We maybe have every insider and every fundamentalist working for Us
> Even though they don't mean to..
> ...





True motorway, as long as there is liquidity and as long as they are not being sucker punched (i.e. pumped and dumped). But I know a good technical operator with lots of time do succeed and I respect them for it.


----------



## wayneL (31 March 2007)

*Re: Fundamental vs Technical*



BSD said:


> Sounds great Chaza
> 
> No more need to study anything beyond graphs and patterns
> 
> ...



I think essentially there are crossed  purposes here.

Funds > 1bill MAKE the chart. It is a completely different kettle of fish than TRADING a chart.

Trading a chart relies on not moving the market with your trades. 

The funds are like the infantry of old, moving in great lines, red jackets, bagpipes playing, all stiff and proper. They move in fronts and create the battleground.

We technicians are the guerrilla fighters of the market, sneaking around, unseen (hopefully), faces blackened, bayonet between our teeth, involved in sneak attacks on skirmishes on the flanks. 

(or somewhere between the two)

If we get too big, we must become an infantry and joins BSD's lot. But with capital of 500,000 or less (a great deal more on the US exchanges) we can lurk around and raid the market at will.

I can tell you the skilled guerrilla will outperform the infantry on a risk adjusted basis by a substantial degree. There is nothing wrong with either method of warfare, it just depends on resources and skills available.

Bagging each other is infantile, silly.

Cheers


----------



## rederob (31 March 2007)

*Re: Fundamental vs Technical*



Captain_Chaza said:


> I would be happy to take on You or/and any Fundanentalist in a race of any kind
> 
> Time frames and rules to be agreed by both sides
> 
> Salute and Gods' speed



Charlie
You haven't stopped being a right wally!


----------



## BSD (31 March 2007)

*Re: Fundamental vs Technical*



wayneL said:


> If we get too big, we must become an infantry and joins BSD's lot. But with capital of 500,000 or less (a great deal more on the US exchanges) we can lurk around and raid the market at will.
> 
> I can tell you the skilled guerrilla will outperform the infantry on a risk adjusted basis by a substantial degree. There is nothing wrong with either method of warfare, it just depends on resources and skills available.
> 
> ...




Cannot disagree with most of this 

I remain happy to leave running across minefields to the chartists - it is great for liquidity

Nothing wrong with getting too big though


----------



## Captain_Chaza (31 March 2007)

*Re: Fundamental vs Technical*

Thankyou for the Warm Welcome Officer Rederob

As you know I am very new to this Forum and just trying out a few ropes and getting to know my way around

First impressions have always been important to me!
As you know!

Crikey! I get the feeling that some Landlubbers are already getting sea-sick 

Let's Wait 'til I give them my very best, Hey?
(As time permits)

"Planning a Cruise"
"Seamanship"
"Rough Sea and Gale"
and
"Storm at Sea" 

Salute and Gods' speed


----------



## rederob (31 March 2007)

*Re: Fundamental vs Technical*

Charlie
You probably got "chucked" from the other forum, and need somewhere to ply your craft.
If you run true to form you won't last long here.
This forum is a much broader church than IC, and also a little more vigilantly "moderated".
It will be edifying to see if you reveal more than your usual bluster at this site, given that you have been so prone to "exclusivity" elsewhere.
As you noted, first impressions are important: You chose to make the thread divisive from the outset, and then posed a challenge in a subsequent post.
You might need your arachnidous mate to offer you assistance should you drift off topic.
Speaking of which, the second, third and fourth posters summed up my views admirably.
So, to create a thread that prefers to divert attention to method rather than outcome, and pitch wits against each other rather than gain from knowledge and experience, is an interesting social experiment in cyberspace.


----------



## theasxgorilla (31 March 2007)

*Re: Fundamental vs Technical*

No market can exist without fundamentals.

WayneL, your post crystalised exactly how the two methods interplay on the market.  And I'm a sucker for military analogies.

Personally, I use both, so any attempt at a divisive discussion about one method serving the other its butt on a plate is a waste of brain CPU cycles.  Mix and match to varying degrees however you can make it work (read: profit).

Having said all this I think that being just a fundamental investor has got to be hard for a little guy.  The only individuals I know of who consistantly make really good money from so called fundamental analysis have had the majority of their winners come via insider knowledge or tips from fund manager friends in the biz.


----------



## Captain_Chaza (31 March 2007)

*Re: Fundamental vs Technical*

Ahoy Rederob

Who is the/my mate you refer to????
I always seem to get lost in your all too many wordings

What point are you trying to make?
RE: The age old delimma of FA v TA

Please spell it out in plain English for us all to read

Salute for now


----------



## rederob (31 March 2007)

*Re: Fundamental vs Technical*



Captain_Chaza said:


> Ahoy Rederob
> 
> Who is the/my mate you refer to????
> I always seem to get lost in your all too many wordings
> ...



Charlie
You are already straying off topic.
I regret you have not remembered your first mate, but perhaps age gets the better of one's memory.
There is no "dilemma" that I am aware of in terms of using FA or TA.
They are, as pointed out often, tools for the many to use.
Like any tool, mishandling can be perilous.


----------



## nizar (1 April 2007)

*Re: Fundamental vs Technical*



Knobby22 said:


> Another point. A technical trader cannot risk more than a certain percentage of their capital. A good fundamental trader might risk 50%! This is because he is confident and when the price triples he can get wealthy.




Confidence does NOT increase the probabilities of the trade.

Alot of top traders probably bought into Enron and WorldCom somewhere near the top.
I can almost guarantee you they were not the ones holding or topping up as it plummeted.


----------



## nizar (1 April 2007)

*Re: Fundamental vs Technical*

I think fundamental research/analysis is useless for trading. And these are my reasons why:

1)Everybody who thinks that its important for trading/investing should ask themselves: Does knowing what a company does make it more likely that the share price will go up?
Why?

2)Actually ill go one step further and say that fundamental analysis is harmful for trading. Why?
Because when you have spent much time doing research, you are introducing biases and ego into your trading. And as such, if you think that the company is a good one, there is a good chance you will hold it longer than you should. Why? Because when we sell at a loss, its like admitting you are wrong, and nobody likes to do that. But trading isnt about being right or wrong, its about profitability.

People think that the companies they know more about, they will hold it for longer term? What makes you think that the company will go up for a long time just because you think its a solid long-termer? I mean, seriously.

People think they are taking on more risk when they invest in companies in which they have no idea what the fundamentals are. Such people need to have a greater understanding of RISK, and they need to quantify and manage their risk. Buy and hold is the most high risk strategy that I know.

People think that because they have researched a company, they have a "solid" investment and can sleep well at night. Well sleeping at night has to do with your psychology and NOTHING to do with your profitability.

The 3 most important indicators in trading are:
1. Price
2. Price
3. Price.
(and yes, i got this from a book LOL)

Now, everyones thinking, wait a minute, I've been doing fundamental research for the last few years, and I've been doing very well. Thats well and good but remember when you are in a bullmarket and you have 80% of the mining sector going up, its pretty hard to not make money, whether you used TA or FA, randomly picked 3 letter codes, heads or tails, ini-miney-miney-mo, throw darts, odds are, you wouldve come out tops. Dont be fooled by randomness.

Now those who have been around for years and years and doing well on fundamentals (or any other method), then you have a TRACK RECORD which you can look back on with confidence.

But to those (like me) who have just started to trade in the last few years of bullmarket, then Hmmmm, something to think about.


----------



## cuttlefish (1 April 2007)

*Re: Fundamental vs Technical*

The portrayal of what constitutes fundamental analysis described in the first post in the thread is way off the mark and demonstrates very little real understanding of what fundamental investing is about. Similarly the description of contrarian is also wide of the mark.

Applying a combination of both to trading is not difficult and doesn't have to be contradictory.  For example you might decide a stock is providing a technical based entry signal but choose not to enter because the fundamentals aren't sound.  Vice versa a stock might have a strong fundamental based entry signal but you might choose not to enter until technical criteria are also satisfied.

Similarly exits can be determined by both fundamental and technical criteria or a combination of both.  There's no rocket science about it.

Can you decide what to have for dinner based on a combination of nutrition and taste?   Can you choose a girlfriend based on a combination of looks and personality?   Then you can choose a stock based on a combination of fundamentals and technical.


----------



## cuttlefish (1 April 2007)

*Re: Fundamental vs Technical*

Nizar - in relation to your comments about fundamentals - succesful fundamental based investing can only occur if objective criteria are used for entries and exits.  Otherwise as you say an emotional attachment to a stock can form as someone 'gets to know it'.    Its also important to note that fundamental based investing involves both entry _and exit_ criteria.   There are some people on this board the espouse a 'fundamentals' based approach that seems to involve buying on some loose and subjective fundamental criteria and then holding forever.  This is not a sound fundamentals based strategy.  Constant re-assessment of the fundamentals is required both based on price changes and on new information released to the market.   A stock can be fundamentally a good buy at one price and a bad buy (and thus a sell) at another price.  Fundamentals do not operate independantly from price.


----------



## wayneL (1 April 2007)

*Re: Fundamental vs Technical*

I think there is a third factor at work.... sentiment.

When sentiment is hot you can throw standard fa and ta out the window. When the crowd is foaming at the mouth (or sh!ting itself) all rules amount to nought. Just buy (or just sell)

It can be observed most effectively by charts (but charts are not absolutely necessary) but I think this is a study by itself.

One branch of sentiment study is contrarian theory. Most effective, but invoked way to early by most (it is now too well known). I even have a contrarian-contrarian theory (as a trend continuation signal) for when folks call bottoms and tops too soon. lol

Just something else to think about. How else can one explain some of the moves we see.


----------



## TheRage (1 April 2007)

*Re: Fundamental vs Technical*



cuttlefish said:


> Nizar - in relation to your comments about fundamentals - succesful fundamental based investing can only occur if objective criteria are used for entries and exits.  Otherwise as you say an emotional attachment to a stock can form as someone 'gets to know it'.    Its also important to note that fundamental based investing involves both entry _and exit_ criteria.   There are some people on this board the espouse a 'fundamentals' based approach that seems to involve buying on some loose and subjective fundamental criteria and then holding forever.  This is not a sound fundamentals based strategy.  Constant re-assessment of the fundamentals is required both based on price changes and on new information released to the market.   A stock can be fundamentally a good buy at one price and a bad buy (and thus a sell) at another price.  Fundamentals do not operate independantly from price.




This is quite correct. A true fundamentalist has entry and exit criteria's just like a Trader. I have to admit though using technical analysis for the past year as part of my arsenal has dramatically improved my timing of investments.  
I don't think fundamental and technical analysis should be viewed as mutually exclusive entities. I think the two approaches compliment one another perfectly. Moreover as wayne said above nobody can underestimate the power of sentiment, how else do you explain the dramatic rise in the prices of penny dreadfuls.


----------



## constable (1 April 2007)

*Re: Fundamental vs Technical*



nizar said:


> 2)Actually ill go one step further and say that fundamental analysis is harmful for trading. Why?
> Because when you have spent much time doing research, you are introducing biases and ego into your trading. And as such, if you think that the company is a good one, there is a good chance you will hold it longer than you should. Why? Because when we sell at a loss, its like admitting you are wrong, and nobody likes to do that. But trading isnt about being right or wrong, its about profitability.




On day trading, hell sometimes I would be lucky to tell you the full name of the company im trading let alone what its last ann was! So long as it going up with healthy volumes I will attempt to trade it. I find this sometimes far more clinical if my mind isnt clouded by fundamental pots of gold.


----------



## nizar (1 April 2007)

*Re: Fundamental vs Technical*



cuttlefish said:


> Nizar - in relation to your comments about fundamentals - succesful fundamental based investing can only occur if objective criteria are used for entries and exits.  Otherwise as you say an emotional attachment to a stock can form as someone 'gets to know it'.    Its also important to note that fundamental based investing involves both entry _and exit_ criteria.   There are some people on this board the espouse a 'fundamentals' based approach that seems to involve buying on some loose and subjective fundamental criteria and then holding forever.  This is not a sound fundamentals based strategy.  Constant re-assessment of the fundamentals is required both based on price changes and on new information released to the market.   A stock can be fundamentally a good buy at one price and a bad buy (and thus a sell) at another price.  Fundamentals do not operate independantly from price.




Very true, Good comments here.

Also something id like to add is that it really doesnt matter if you pick your stocks based on fundamentals AS LONG AS your exits and money management is sound.


----------



## dhukka (1 April 2007)

*Re: Fundamental vs Technical*



Captain_Chaza said:


> "Fundamental v Technical "
> 
> I wrote this article nearly a decade ago
> I can't see that anything has changed since




I agree its still as full of false assumptions and grade school platitiudes now as it was then.


----------



## IFocus (1 April 2007)

*Re: Fundamental vs Technical*

F/A verse T/A Oh God guys don’t get sucked into this argument / discussion with a one sided opinion do that in the market you all should know what the result is likely to be.

I know people who employed both methods and have created real wealth from the market using either, go find those that can not those that talk about it. 

Tech/a has pretty much answered the question wish I could be as succinct besides I think it’s the wrong question anyway. If you find those that are successful (success is creating wealth) using FA it will bear little resemblance to the method described. 

A couple of points I have noticed over the years is

I know a number of people who have used FA for 20 to 40 years and still engaged in the market  I don’t know any who use TA for that length of period and still doing so, I think its to do with the burden psychology wearing the TA’s down. I am not saying no one is I just haven’t met them.
Also I think the failure rate (my opinion only) is far greater in the TA ranks than the FA’s

I use TA to trade markets my own belief is that a combination of both is optimal but in the end its more to do with the practitioner than the method…………   


Focus


----------



## Julia (1 April 2007)

*Re: Fundamental vs Technical*

Cuttlefish

You've said what I would have wanted to, and undoubtedly much better.

Thank you.


----------



## MichaelD (1 April 2007)

*Re: Fundamental vs Technical*



IFocus said:


> I know a number of people who have used FA for 20 to 40 years and still engaged in the market  I don’t know any who use TA for that length of period and still doing so, I think its to do with the burden psychology wearing the TA’s down. I am not saying no one is I just haven’t met them.



That's probably because with FA you can fool yourself for longer that your analysis is adding value when it most likely isn't. Most traders/investors that I am aware of simply do not compare their results with random entry. This is essential in my view to determine whether your analysis is adding value, subtracting value or is simply value neutral.

You can make money with FA, TA, darts, whatever - it isn't the analysis that makes the bulk of the money for successful traders/investors.


----------



## tech/a (1 April 2007)

*Re: Fundamental vs Technical*

*Focus.*

You bring up some interesting and valuable points that I think are worth expanding.

*40* Years ago Technical Analysis consisted of Hand Drawn Charts and Data was available from a tickker if you were in the financial industry OR you could hand plot from Weekly publication of open/close pricing.

*20* Years ago pretty much the same but you had a crude calculator.

*TODAY* We have 

Computers that sit on our desk with as much power as computers which took up whole buildings 20 yrs ago. 

Data suppliers both Fundamental and Technical by the 100s data is packed/sifted/sorted and presented in forms un dreamt of even 10 yrs ago.

Software which can analyse just about anything. a constant flow of new software with more powerful capabilities is being released almost weekly.Analysing powr NEVER seen before.

Participants ever increasing as the world of technology makes ALL forms of analysis seem a sinch.1000s flock to technology for the EASY answer.They EXPECT coputers to give the CORRECT analysis EVERYTIME. So why are there not more traders becoming successful.
Well on a numbers basis there probably are. On a % basis relative to participants there are probably LESS.

*WHY* well its my view that most participants ahve no idea HOW their software and indeed their analysis is best apllied. I see both technical analysis AND fundamental analysis being used in ways that prove to be fatal,right from the get go. Participants simply have no idea what it is that they should be doing.

I'll give a simarly.
I'll give you a Jumbo Jet.
I'll load it with data.
I'll tell you where it's going.
I'll tell you where it's been.
I'll give you a 500 page book on how to fly it.
I'll place the most sophisticated Computers and software known in it.
I'll give you 100 hrs training on the software and a support number.
I'll even let you attend a seminar presented by a pilot on how he flew from destination to destination.
Now go fly the JUMBO. Either by instrument (Technical) or Manual (Fundamental.) or BOTH.

*Most will fail *to even get off the ground.
Some will get to the destination a few times but crash other times---some fatally.
Some who are experienced pilots will succeed.
Others who are always upgrading,questioning,applying and refining will be like test pilots,relishing advancements in every new model of jumbo manufactured.


----------



## nioka (1 April 2007)

*Re: Fundamental vs Technical*

The way I see these things seem to be different to most of the comments here. Fundamentalists, and that is the way I trade, can operate on their own judgement. I take into consideration all that I can find out about the particular industry the object company is involved in. I then find out as much as I can about the company itself and if possible the people involved. I also like to know someone involved in the company if possible. I look at the future earnings potential. I make the judgement.
Technical traders, on the other hand, rely on the ability to judge the reactions of other traders to influence the market and profit from the mistakes of others.


----------



## motorway (1 April 2007)

*Re: Fundamental vs Technical*



nioka said:


> The way I see these things seem to be different to most of the comments here. Fundamentalists, and that is the way I trade, can operate on their own judgement. I take into consideration all that I can find out about the particular industry the object company is involved in. I then find out as much as I can about the company itself and if possible the people involved. I also like to know someone involved in the company if possible. I look at the future earnings potential. I make the judgement.
> Technical traders, on the other hand, rely on the ability to judge the reactions of other traders to influence the market and profit from the mistakes of others.




All very good.

But at the end of the day are you the real expert and do you have enough money to make the market?

If you only want to buy x$ of stock and not the whole company
maybe the stock can be bought for less or at a better time..

TA can be about all sorts of things
Here is an older view..



> The "Method" takes for granted:
> 
> ....That those who know more about it than the observer cannot conceal their future intentions regarding it. Their plans will be revealed in time by the stock's subsequent action. Victor De Villiers, "The Point and Figure Method of Anticipating Stock Price Movements", Published 1933, pg 8




I want the whole company I make the bottoms and the tops.
I want a few shares.. Maybe the trend is then important to consider
and Do I want to bet that I am the real expert against the trend against the bigger pocket books?
Double or nothing????

Or having done whatever analysis..
wait to hitch the ride when They have started going My way..

Then those with the more Knowledge and bigger pocket books
work for Me and Not Me for them.

motorway


----------



## coyotte (1 April 2007)

*Re: Fundamental vs Technical*

Capt ::bowser: 

You have certainly navigated into dangerous waters coming to this site.

Nothing would be known of your history of daring and successful exploits @ IC.

The landlubbers will let loose the cannons from their high hills of theory on your trusty vessel.
Whilst they dare not enter more than ankle deep into the the stormy seas of S/T Trading.

Theory of seamanship you'll find heaps of it here.
(the landlubbers call it application, but never come up with any examples of it). Just babble.



A hearty salute from your loyal crew memberirate: 
Coyotte


----------



## PALERIDER (1 April 2007)

*Re: Fundamental vs Technical*

Technicains Beware,

When the markets turn sour, which inevitably they will, all the good money will find a warm home in strong fundamentals and all the technical money will be lost.

Take heed.


----------



## nioka (1 April 2007)

*Re: Fundamental vs Technical*



motorway said:


> All very good.
> 
> But at the end of the day are you the real expert and do you have enough money to make the market?
> 
> ...




Good points but I have found that if you examine the fundamentals as I have suggested then price has been factored in, a few cents here or there doesn't usually make much difference here or there. Time in the market is a much more important factor. It is important to update your opinion of the fundamentals on a regular basis.
It sure would help to have enough money to make the market but history records many bankrupts who tried.


----------



## lesm (1 April 2007)

*Re: Fundamental vs Technical*



PALERIDER said:


> Technicains Beware,
> 
> When the markets turn sour, which inevitably they will, all the good money will find a warm home in strong fundamentals and all the technical money will be lost.
> 
> Take heed.




hahaha.............another misguided and fallacious statement from what appears to be just another biggoted and shortsighted fundie. Reality will show that money will most likely be lost on both sides.

The smarter, more skilled and experienced players on both sides will be the real gainers.

Cheers.


----------



## motorway (1 April 2007)

*Re: Fundamental vs Technical*



PALERIDER said:


> Technicains Beware,
> 
> When the markets turn sour, which inevitably they will, all the good money will find a warm home in strong fundamentals and all the technical money will be lost.
> 
> Take heed.






> When the markets turn sour, which inevitably they will, all the good money will find a warm home in strong fundamentals



 And in Up or Down markets Those real fundamentals will be found in stocks that on appropriate time frames have the strongest technicals because MONEY will flow to them on a relative basis...







> and all the technical money will be lost.



 Technical of Fundamental... it is the smarter money that will make money relative to the dumber money.



> All the good money is flowing




Exactly Right... That is why it is worthwhile to look at those actual flows..
as much at least as imaginary ones ..

motorway


----------



## PALERIDER (1 April 2007)

*Re: Fundamental vs Technical*

Old Fundamental parable,

Tis the young leafy sappling that was the quickest to grow which will bend, buckle and break in the first summer storm.

For now, my roots spread deep and wide to hold me in good stead to stand the tests of time and bear fruit _forever_ whenever I please.

The storm is coming.


----------



## Wysiwyg (1 April 2007)

*Re: Fundamental vs Technical*



PALERIDER said:


> The storm is coming.




Storm 30....Warriors 12....

Good pick. 

My   worth is that In the fund. v tech.  discussion I wonder sometimes this....which come first? The chicken or the egg.


----------



## nizar (1 April 2007)

*Re: Fundamental vs Technical*



PALERIDER said:


> Technicains Beware,
> 
> When the markets turn sour, which inevitably they will, all the good money will find a warm home in strong fundamentals and all the technical money will be lost.
> 
> Take heed.




LOLOLOLOLOL 
Funny stuff.
You dont know what your on about buddy.

Its the TA and systems traders that exit at the first sign of trouble, and actually the fundamentalists that hold "until the end" and top up on "weakness".

Those that trade the PRICE ACTION (which is what matters), are the ones who cut their losers and let their winners run, not the fundamental analysis types.

Take heed, my friend.


----------



## Captain_Chaza (1 April 2007)

*Re: Fundamental vs Technical*



2020hindsight said:


> Chaza,
> 
> Please posts grounds / substantiation for your claim that this will not be plain sailing!
> I mean, perhaps that red sky at sunset / (oops dawn) was just the inside of bloodshot eyes?
> It's happened before you know !!




Ahoy Officer 2020

As I am new this Arena I think this maybe a better thread to respond to your request in the April Competition

All Seamanship calls are in essence  judgement calls
After 2-3weeks Plain Sailing in some classes of sail I get the feeling those Greedy Landlubbers are proned to take profits and the seas then become choppy

As I only work from the Technical (and in this case I refer to the SHAGHAI Composite) I fear those great gamblers in China have been taking profits over the last 2 days
If this continues on Monday then it will become all to obvious to the Yanks and the DOW will fall Monday night( our time) in Wall St

All I can say is that I have cancelled my Golf game and I will be battening down the hatches before the Dawn in Shanghai 

Salute and Take Care

PS It very rarely is Plain Sailing at any time ?

PPS Did you know that gambling in China is illegal and that the only outlet for Gambling is the Stockmarket?

PPS As Always DYOR

PPPS My apologies for the double read


----------



## nioka (1 April 2007)

*Re: Fundamental vs Technical*



nizar said:


> LOLOLOLOLOL
> Funny stuff.
> You dont know what your on about buddy.
> 
> ...




The boot may be on the other foot. It is the "Tecs" exiting on the first sign of trouble that has a domino effect which in turn is the real cause of violent fluctuations in the market. Of course this is often by design because it is the fluctuations themselves that allow them to exist.
If there were a true fundamental base to the market then prices would only change if the fundamentals change. 
Imagine what it would be like for a wage earner if the wages were set daily on a technical basis.


----------



## wayneL (1 April 2007)

*Re: Fundamental vs Technical*



nioka said:


> The boot may be on the other foot. It is the "Tecs" exiting on the first sign of trouble that has a domino effect which in turn is the real cause of violent fluctuations in the market. Of course this is often by design because it is the fluctuations themselves that allow them to exist.
> *If there were a true fundamental base to the market then prices would only change if the fundamentals change. *
> Imagine what it would be like for a wage earner if the wages were set daily on a technical basis.



I don't think so. Get a few FA's in a room to value a company and there is likely to be blood spilt... case in point BHP thread.

In fact, TA was born of the observation of fluctuations in price. Jap rice traders => candlesticks etc.


----------



## nioka (1 April 2007)

*Re: Fundamental vs Technical*



wayneL said:


> I don't think so. Get a few FA's in a room to value a company and there is likely to be blood spilt... case in point BHP thread.
> 
> In fact, TA was born of the observation of fluctuations in price. Jap rice traders => candlesticks etc.




I agree with you there. To examine the fundamentals is a science, partly learnt in a Management school and followed up by serving your apprenticeship. Most of the experts discussing probably studied economics and became immediate experts. ( ex=something that was, spurt= drip out of control.)


----------



## Freeballinginawetsuit (1 April 2007)

*Re: Fundamental vs Technical*



nioka said:


> The boot may be on the other foot. It is the "Tecs" exiting on the first sign of trouble that has a domino effect which in turn is the real cause of violent fluctuations in the market. Of course this is often by design because it is the fluctuations themselves that allow them to exist.
> If there were a true fundamental base to the market then prices would only change if the fundamentals change.
> Imagine what it would be like for a wage earner if the wages were set daily on a technical basis.




Or real estate was a liquid form of investment driven near term by the minority/small investment, regularily falling 2O percent past the mean with no change in real dynamics.

All forms of investment are cyclical with the stock market presenting an environment to speculate the gap between the mean, both near and long term. A forward view IMO is most certainly gained by a fundamentalist approach of the majority of liquidity.

Niz just choses to speculate on caravans and trade them as a house before it turns back to a caravan  , most punters do to some extent......just to different degree's/investment of thier funds

Its incorrect though to state in recent times that any singular approach is the 'Expert Way' the marketplace, in the most part any approach would have been succesful...........but ATM those trading the past trend would have outperformed IMO.

And for those investing with the majority of funds with a grasp on fundamentals and a clear forward view and trading plan, they would have been the clear winners!


----------



## wayneL (1 April 2007)

*Re: Fundamental vs Technical*



Freeballinginawetsuit said:


> Niz just choses to speculate on caravans and trade them as a house before it turns back to a caravan  , most punters do to some extent......just to different degree's/investment of thier funds



LOL

Sounds like a great idea.

My approach is the buy and sell the mansions like baseball cards.

Seriously though, I don't think FA's get an accurate view with what passes as TA on forums in bull markets. A Chimpanzee could do well (probably better) and thats not directed at any particular person. It is a fact that will become self evident in a bear market.

However a competent TA will outperform in the rough times (I dare say a competent FA as well)

But one thing we are all forget is our individual goals for being in the market.

One with a substantial normal income who invests spare cash in the market to build wealth will have an entirely different approach and style of analysis (whether FA or TA) to one who makes a living FROM the market and depending on the amount of capital in use. 

A wealth building investor will be prepared to sit out the bear markets with the conviction that their investments are sound and will come good. For an income trader that means starvation.

An income TA trader will utilize several tools in order to make an income at these times e.g. short-selling, options, futures etc.

Sometimes these discussions are like a horse and a dog arguing over what is the best food to eat.


----------



## Knobby22 (1 April 2007)

*Re: Fundamental vs Technical*



wayneL said:


> LOL
> 
> 
> A wealth building investor will be prepared to sit out the bear markets with the conviction that their investments are sound and will come good. For an income trader that means starvation.




A really good fundamental investor will have sold all their investments before the downturn. A really good technical trader will be riding the fall.

Most good fundamental traders use a little technical analysis and most technical traders use a bit of fundamental analysis. This is why in this forum both sides of the coin can discuss the potential fall of the market for instance.


----------



## wayneL (1 April 2007)

*Re: Fundamental vs Technical*



Knobby22 said:


> A really good fundamental investor will have sold all their investments before the downturn.



Not challenging you Knobby, just interested to know: At what point would a FA go to cash, what would be the signal to sell?


----------



## Freeballinginawetsuit (1 April 2007)

*Re: Fundamental vs Technical*



wayneL said:


> Not challenging you Knobby, just interested to know: At what point would a FA go to cash, what would be the signal to sell?



.

Wayne,

Fundamentalists positions would be liquid once the initial reasons for investment changes (wether that price action /forward views etc).

Economics aside Wayne, a simple question?, even though you have no interest in IPO's or investing in market dynamics.

6 months ago what was your view on the ore market, particularily forward view of the manganise upstarts in the midwest and the likely hood of offshore follow through investment near term. What is your view now on the state of these business near term..........youre neck of the woods GBG say. I know my views have changed


----------



## wayneL (1 April 2007)

*Re: Fundamental vs Technical*



Freeballinginawetsuit said:


> .
> 
> Wayne,
> 
> ...



To be honest, I don't have a view. As I trade US stocks and commod exchanges they're just not on my radar. 

Ask me something about corn acreages or something.


----------



## Freeballinginawetsuit (1 April 2007)

*Re: Fundamental vs Technical*



wayneL said:


> To be honest, I don't have a view. As I trade US stocks and commod exchanges they're just not on my radar.
> 
> Ask me something about corn acreages or something.




LOL,

I know nothing about corn

But I would trade the difference between squeezed leverage speculation and value! Corns probably mostly speculation though if youre trading it!


----------



## MichaelD (1 April 2007)

*Re: Fundamental vs Technical*



wayneL said:


> Get a few FA's in a room to value a company and there is likely to be blood spilt... case in point BHP thread.



Get a few TA's in a room to mark up a chart (eg Elliott Wave counts, even trend lines and support/resistance) and there is likely to be blood spilt, too...


----------



## Knobby22 (1 April 2007)

*Re: Fundamental vs Technical*



wayneL said:


> Not challenging you Knobby, just interested to know: At what point would a FA go to cash, what would be the signal to sell?




Easy to say, (hard to do). When the market looks too hot and expensive especially compared to interest rates, especially when interest rates are rising, especially when unrealistic assumptions occur. We are also allowed to look over our technical traders shoulders.

I'm not talking a correction here but a crash e.g.'87. I know this means we may go early but we aren't as quick. I know a few investors who sold before the crash, I didn't start investing till '89. I know one guy who even sold his house!!!! Hope I am up to it.

By the way, I am becoming quite liquid at present  finding that I am being forced to sell, particularly industrials, though I don't expect a crash (yet) maybe a good correction is due. We are starting to see some unrealistic assumptions but as everyone knows a bull market will always last longer than you expect.


----------



## nizar (1 April 2007)

*Re: Fundamental vs Technical*



MichaelD said:


> That's probably because with FA you can fool yourself for longer that your analysis is adding value when it most likely isn't. Most traders/investors that I am aware of simply do not compare their results with random entry. This is essential in my view to determine whether your analysis is adding value, subtracting value or is simply value neutral.
> 
> You can make money with FA, TA, darts, whatever - it isn't the analysis that makes the bulk of the money for successful traders/investors.




Good post Michael. 6 months ago I wouldnt have had a clue what you were on about but now I'm starting to have an idea.

I'm actually suprised at some of the results (I've seen) of random entry - coupled with good money management and a decent exit(s) - they are better than most would expect.

But as you mention, for any system to be valid it has to outperform random entry.


----------



## IFocus (1 April 2007)

*Re: Fundamental vs Technical*



> youre neck of the woods GBG say. I know my views have changed




Sorry off topic but

Our environmental guy left Friday to start at GBG, talked it up big time.


----------



## wayneL (1 April 2007)

*Re: Fundamental vs Technical*



MichaelD said:


> Get a few TA's in a room to mark up a chart (eg Elliott Wave counts, even trend lines and support/resistance) and there is likely to be blood spilt, too...



Red faces, bulging eyeballs, shouting, stamping of feet, throwing of coffee cups... but blood? Never!

We're far to highbrow for that.  

I think the stories of EW fracas are apocryphal. They seem do have very gentile discussions on this board. Maybe a few raise eyebrows/rolled eyes, a bit of tutting perhaps.  

Those FAs on the other hand...


----------



## wayneL (1 April 2007)

*Re: Fundamental vs Technical*



Knobby22 said:


> Easy to say, (hard to do). When the market looks too hot and expensive especially compared to interest rates, especially when interest rates are rising, especially when unrealistic assumptions occur. We are also allowed to look over our technical traders shoulders.
> 
> I'm not talking a correction here but a crash e.g.'87. I know this means we may go early but we aren't as quick. I know a few investors who sold before the crash, I didn't start investing till '89. I know one guy who even sold his house!!!! Hope I am up to it.
> 
> By the way, I am becoming quite liquid at present  finding that I am being forced to sell, particularly industrials, though I don't expect a crash (yet) maybe a good correction is due. We are starting to see some unrealistic assumptions but as everyone knows a bull market will always last longer than you expect.




Make sense. TKX


----------



## IFocus (1 April 2007)

*Re: Fundamental vs Technical*

Hi Tech



> Software which can analyse just about anything. a constant flow of new software with more powerful capabilities is being released almost weekly.Analysing powr NEVER seen before.




Allows Spruikers to profit from new comers to the market and throw in the world will end but join us as we have the holy grail. 



> Now go fly the JUMBO. Either by instrument (Technical) or Manual (Fundamental.) or BOTH.




This is a good analogy lost on most I think including myself in the late 90’s I was in to much of a hurry to make $$ I guess that draws most to the market fast $$



> Some who are experienced pilots will succeed.




Yes and others such as Ross B talks about on Reef who have the trading gene and are profitable from day one. I know and have met the trader he talks about well, her methods would be laughed off this site as they are so simple. Lot to be said for trading talent when discretionary.   

Focus


----------



## wayneL (1 April 2007)

*Re: Fundamental vs Technical*



IFocus said:


> Yes and others such as Ross B talks about on Reef who have the trading gene and are profitable from day one. I know and have met the trader he talks about well, her methods would be laughed off this site as they are so simple. Lot to be said for trading talent when discretionary.
> Focus



I think I know of and have seen her methods secondhand. As a clue, is she ethnic?

A lot of good tech traders have embarrassingly simple methods. It really does come down to the cliches'. 

However, I think a lot of success is in the setups people don't trade. Call it experience, gut feel, natural ability... there is something that lets folks discretionarilly reject certain trades they just "know" are gonna bomb.

FWIW


----------



## IFocus (1 April 2007)

*Re: Fundamental vs Technical*



> I think I know of and have seen her methods secondhand. As a clue, is she ethnic?





Hi Wayne

The trader I refered to  is Western Australian of Asian decent


Focus


----------



## wayneL (1 April 2007)

*Re: Fundamental vs Technical*

Ok, She's the one then.

Cheers


----------



## It's Snake Pliskin (1 April 2007)

*Re: Fundamental vs Technical*



wayneL said:


> To be honest, I don't have a view. As I trade US stocks and commod exchanges they're just not on my radar.
> 
> Ask me something about corn acreages or something.





Wayne,
What's the volatility and liquidity like?


----------



## wayneL (2 April 2007)

*Re: Fundamental vs Technical*

In corn only?

On Friday, 156,056 contracts traded in the next two expiries. Thats a face value of ~$3billion, open interest ~$14billion.

Volatility is roughly 30% (similar to BHP)

Margin is USD $1350 per contract which has a face value of ~USD $20,000


----------



## It's Snake Pliskin (2 April 2007)

*Re: Fundamental vs Technical*



wayneL said:


> In corn only?
> 
> On Friday, 156,056 contracts traded in the next two expiries. Thats a face value of ~$3billion, open interest ~$14billion.
> 
> ...




Thanks for the info.
Cheers


----------



## Captain_Chaza (2 April 2007)

*Re: Fundamental vs Technical*



Captain_Chaza said:


> Ahoy Officer 2020
> 
> As I am new this Arena I think this maybe a better thread to respond to your request in the April Competition
> 
> ...





Ahoy Brave and Loyal Sea-Cadet-Officer Coyotte
Thanks for your very warm welcome aboard

I hope you received my above Sea-Alert and battened down the hatches in time?

I have always found It is always best to Batten down the hatches and Run for Shelter when ever faced with  any sign of Bad Sea and Weather Conditions

Ahoy Officer 2020

As you can see, Today is certainly not "Plain Sailing"


----------



## coyotte (2 April 2007)

*Re: Fundamental vs Technical*

Ahoy
Capt. 

Read Dilerma and you'll see why!

He has a thread on this site -- also may pay to make a visit to his web-site.

See you're still braving the reefs around here -- just beware it doesn't turn into your wreath.


Salute:irate:


----------



## Captain_Chaza (2 April 2007)

*Re: Fundamental vs Technical*

Ahoy SCO Coyotte

Crikey!
The decks of  the Great ship Nikkei are now being pooped 

Salute and take care


----------



## tech/a (2 April 2007)

*Re: Fundamental vs Technical*



> See you're still braving the reefs around here




*Thats very clever!! *


----------



## Captain_Chaza (10 April 2007)

*Re: Fundamental vs Technical*

So far, so good,  Sea-Cadet- Officer Coyote

I hope nobody gets really Sea-Sick after reading this piece 
Re : When the Up-to-Date Technical teams up with the Age Old Disciplines of Seamanship?

IE:  "The Greatest Sport Of All"

No sport is more magnificent than deep water sailing on the Global Exchange in all types of weather. None requires more courage and such a sustained effort of both body and mind. Nor does any put on offer more splendid trophies and prize money. 

The key to all weather handling of any sized yacht is careful preparation beforehand and the severest simplicity when the time for action arrives, and then to act instinctively without hesitation. 

The safety of his craft and crew must always be the skippers first consideration. When sailing off-shore the chief difficulty lies in judging the correct moment when legitimate hard and exhilarating sailing becomes recklessness.  

This judgement requires seamanship disciplines and courage of the highest degree that unfortunately is not given to everyone. 

It is difficult to remember, safety at sea is  Paramount.

The pleasure of a cruise whether it is a way of life upon the sea or a convenient way of visiting interesting places can be almost unlimited; yet equally the discomforts can be quite horrifying. The difference between these two extremes depends on seamanship, the art of living upon the sea. 

Seamanship, with its very widely differing  interpretations of set information, facts, weather, wind and sea, is the nemesis of all skippers who set out sailing the Global Exchange.   

Perfection in this art depends not only upon the setting-out preparations but more importantly to the extent of holding a firm course and the skipper’s navigational skills, the art of getting from one place to another. 

It is a skippers folly to ignore the experience of others and even forget his own past experiences.

He must set in place a plan of action designed to avoid being locked into a bad and dangerous gale finding himself and his crew too far off-shore and the safety of land. Not only ruining the pleasure of the cruise for all, but more importantly missing out on the many other pleasurable opportunities that exist elsewhere on Global Exchange. 

In this highest of high-tech arenas, with all the yacht clubs now communicating with each other in real time, it must be remembered that for every bullish skipper heading north, there is one bearish skipper setting out a southerly coarse.   

Who is the one with the better seamanship skills?  

While a sailing ship of any size and design may have great fundamentals, it just doesn't make sense to set sail on her if she is caught up in a storm and is in angry seas, until there is some evidence of improving conditions. 

Similarly, it doesn’t make sense to jump off a perfectly sea-going vessel because of some old sailors tale of a successful percentage gain he found worked ages ago. 

Believe me old sailors only talk about their victories and leave their failed attempts in the bottom draw for their children and grandchildren to read. 

      "Sailing on Instrumentation"

Technology has won in almost every arena of human endeavour. Man has walked on the moon.  He can navigate the globe with satellite navigation. He can land a plane in thick fog in the middle of cities and at night in drenching rain solely on instrumentation. 

We put our lives on instrumentation everyday of the week. In business we install the latest in machinery and technology to get an edge on any fierce competitor.

Yet when we take a chance on the the greatest sport of all where more money is won and lost every week than the combined total of all the games of chance we put our money on blind faith, wishful thinking and even believe everyone's a winner.

Most skippers spend their time looking for the easy way (which as we all know is not an easy search) instead of learning the key to sailing any ship on Global Exchange--supply and demand. That is, the endless duel between the bullish and the bearish skippers. 

No one can consistently and accurately determine future prices on anything. For example, how much can you sell your own house for at auction this time next year (short term), in three years time (medium term) or in ten years time (long term)?  

Master the basics of seamanship “in the mind” and then learn to trust the navigational instrumentation you select to have on board, you will be able to navigate instinctively without hesitation, gain ground on any fierce competitor and enjoy the thrill of winning many more trophies. 

Discover the 4 Basic Sail Drills and learn to

#1 Wait Patienly!

#2 Hoist a sail without hesitation!

#3 Hold on tightly!

#4 Lower a sail and run for Shelter

It's as easy as that if you learn to "Sail the Circle"
IE: Make a plan of action for all winds

Some make a plan and assume that most Winds blow from the West 
We all know this just does not happen

We must therefore set a plan of action to suit all winds
(from each and every direction)

"The Wind Calls the Tune"

Salute and Gods Speed


----------



## chance fate (22 April 2007)

*Re: Fundamental vs Technical*

The captain found an article that agrees with his view of life...  (that proves it then!)....  it's clear that the captain can only sail a ship....  and has to be told where to sail to....and if left alone would just sail round in circles....  better to be able to sail a ship and have the intention to sail somewhere...  life's a bit boring otherwise..... the only concession (to hold the analogy to the market) some parts of mother nature can't be managed....  don't think the captain will be able to agree with this - probably an ego thing....


----------



## motorway (22 April 2007)

*Re: Fundamental vs Technical*

Maybe the Captain 

Is happy to sail where ever He gets paid the most to do so.

On occasion this might even mean sailing in circles..

I think the Captain is operating a business

No doubt When He wants to sail  somewhere in particular
For His own pleasure.. He will be the one Paying the $$$ to another captain.

I think the captain does not argue with His pay master.
he just sums up the potential Rewards and Risks
And at His discretion agrees or not to make the voyage

If the best relative option is staying safely in port.
The captain is happy to sail nowhere at all.

he gets offers everyday to set sail
But without His agreement
Nothing is ventured ..

motorway


----------



## chance fate (22 April 2007)

*Re: Fundamental vs Technical*



motorway said:


> Maybe the Captain
> 
> Is happy to sail where ever He gets paid the most to do so.
> 
> ...




I agree the captain should weigh up risk and reward....  which is the province of fundamental analysis and evaluation....  the captain comes across as a technical analyst...  I reckon it's better to use both approaches whenever appropriate....  to argue one approach against the other is irritating...


----------



## Temjin (22 April 2007)

*Re: Fundamental vs Technical*

Can't be bothered to read all this babblings about ship and sailing stuff. hahah

Put it this way, I agree that it doesn't matter if it's fundamental vs technical and that it is how you applied it.

In theory, I could easily follow a stock recommendation newsletter and "trade" on the basis of the authors' pure fundamental analysis. As long as I have my own "investment" plan which include entry and exit stratgies and incorporate position sizing and money management techniques into it, I can still profit from it as long as the newsletter is giving me an edge. 

I'm buying via fundamental analysis recommendations, and not based on price actions using indicators and patterns. 

Of course, how good the "system" is in comparsion to pure technical analysis is subject to debate and how much effort one could put in to operate that system.


----------



## chance fate (22 April 2007)

*Re: Fundamental vs Technical*



Temjin said:


> Can't be bothered to read all this babblings about ship and sailing stuff. hahah
> 
> Put it this way, I agree that it doesn't matter if it's fundamental vs technical and that it is how you applied it.
> 
> ...




Yeah ....  been reading the Adaptive Analysis thread...  seems someone has written a book on their system of when to do what... (haven't got a copy myself)....  reckon the way to go is to debate the pros and cons of what you describe above...  use fundamentals to decide what to buy and then use tech analysis for entries and exits...

On the selection of stocks I first get comfortable with the supply demand equation in a commodity/industry sector..  e.g. Chinese demand for raw materials is expected to continue for some years (refer to recent RBA report on commodities)... then narrow down on company's that are lined up to benefit from that type of situation....  e.g. Paladin seems positioned well to benefit from Uranium price strength....  and then upon selecting the stock use tech analysis to gauge the flow and ebb of fear and greed in the trading cycle and decide when to buy and sell, mixed with continued monitoring of company and regulatory activity...  then keep reviewing the whole lot to learn what works and doesn't....


----------



## tech/a (22 April 2007)

*Re: Fundamental vs Technical*



chance fate said:


> Yeah ....  been reading the Adaptive Analysis thread...  seems someone has written a book on their system of when to do what... (haven't got a copy myself)....




*Practice/Factual*




> reckon the way to go is to debate the pros and cons of what you describe above...  use fundamentals to decide what to buy and then use tech analysis for entries and exits...
> 
> On the selection of stocks I first get comfortable with the supply demand equation in a commodity/industry sector..  e.g. Chinese demand for raw materials is expected to continue for some years (refer to recent RBA report on commodities)... then narrow down on company's that are lined up to benefit from that type of situation....  e.g. Paladin seems positioned well to benefit from Uranium price strength....  and then upon selecting the stock use tech analysis to gauge the flow and ebb of fear and greed in the trading cycle and decide when to buy and sell, mixed with continued monitoring of company and regulatory activity...  then keep reviewing the whole lot to learn what works and doesn't....





*Theory/hypothesis.*


----------



## chance fate (22 April 2007)

*Re: Fundamental vs Technical*



tech/a said:


> *Practice/Factual*
> 
> *Theory/hypothesis.*




Just outlining a process here..... there's lots of ways to do the inidividual bits of analysis, e.g. porter's 5 forces to put a lable on what you could do, to do the industry analysis....

Is that book worth a read?

I'll have a flick through at the book store to see if it really could make a difference...  

Reckon the amount of analysis that people do is related to their own risk aversion...  for me i do fundamental work to get comfy that if the market dives on a day e.g. the recent shanghai fall, it'll bounce back because the underlying drivers haven't changed i.e. china is a state run economy with rapid development directives and cheap labour and the stock market is half the size of australia's....


----------



## Captain_Chaza (22 April 2007)

*Re: Fundamental vs Technical*

"Seamanship " 

Perfection in this discipline depends not only upon the setting-out preparations but to an equal extent to his navigational skills.

It is a little uncanny to notice that through history most of the participants in the greatest ocean regatta of them all, the America’s Cup, is filled with corporate magnates of the Global Exchange.

Did they learn their successful seamanship disciplines and navigation skills on land and then go to sea, or did they learn them at sea and then go on the land? Whichever voyage of discovery came first I am sure they always set out with the latest in technology and the finest equipment available to them at the time. 

You don't need to be a Rhodes scholar to fathom out the truth about Sweet FA 
All Fundamental Data is delayed Data (Sometimes even in a 10 week delay)
This is an extremely un-exceptable business practice IMHO when you can see how fast some people can type nowadays 

This has always been a bitter dissapointment to this Captain

Once again, the facts and fundamentals are not nearly as important a skipper’s interpretations of the seas, ocean currents wind and weather conditions. The difference in interpretations by many a skipper lies in the fact that each skipper hears and sees with his own built in perceptions and never, never learns by his past experiences.  

It seems he has all the excuses in the book and his source of free information and long-range sea and weather forecasters tips are priceless. Everyone wins in the long term.  How often does he come back years later with new funds and add a PAS, HIH, CRO ONE to his CTR BOR PDP BPC MIM

Searching through the many voyages of ships sailing the Global Exchange captured at any one moment in time shows truly amazing variety of conditions and situations.  

Some booming through on the crest of waves, some crashing in troughs, others beset by a calm drifting sideways and some with little food and fresh water on board waiting for friendly pirates who do take prisoners.

Numerous voyages have had magnificent starts and have then come to grief, a few perhaps with loss of life; certainly many with a great loss of dignity and investment. Almost all could have been avoided with the employment of a common sense respect for the sea and the navigator’s discipline of maintaining and recording regular sightings.

No other than the Technical can attempt  this 

Sea training requires some effort but becomes trivial compared to the excitement of competition and the pride of achievement. Even in the case of the novice cadet, for those who participate in virtual reality ocean trials, either as a sole yachtsman or as a member of a hand selected crew, their sailing experiences from anywhere on the Global Exchange may never be the same again. 

Courage unfortunately is given to all!

Some will gain invaluable expertise, be more informed and experience many more enjoyable voyages in the future. 

Some will develop new individual cruise strategies as they trash old sailors' habits and blind custom Fundamental beliefs. 

After some practice and experience in real time some may even venture on smaller ships  and test their skills to the fullest against those Magnificent 20/50/100/200 tall ships

A skipper must set in place a plan of action designed to avoid being locked into a bad and dangerous gale and finding himself and his crew too far off-shore and the safety of land. Not only ruining the pleasure of the present cruise for all, but also missing out on the many other pleasurable opportunities that may exist elsewhere on the great exchange. 

Seamanship, with its very widely differing  interpretations of set information, facts, weather and ocean charts is the nemesis of all skippers who set out sailing offshore..   

In this highest of high-tech arenas with all the exchanges now communicating with each other in real time, it must be remembered that for every bullish sailor heading north, there is one bearish sailor setting out a southerly coarse. 

Who is the one with the better seamanship skills? Who is the one with the better fittings and equipment on board? 

Who is the one to be overwhelmed with emotion? Who is the one blindly in love with his craft? 

Who is the one so much in love with sailing that he must always be at sea. 

Who is the one steaming with hatred and memories of a very unpleasant voyage clouding his next judgment? 

Who is the one who cannot admit to himself and his crew that the seas and weather conditions have suddenly changed? 

Who is the one to hesitate for fear of incurring a small loss of dignity and a few meters. 

Who is the one too proud and unable to give the order “Run for shelter!” 

The difference in interpretations lies in the fact that each skipper hears and sees with his own built in perceptions and even at times with his wishful thinking. 

Again, the facts and fundamentals are not nearly as important as his interpretations of the current seas, ocean  and weather conditions.  

 Also it seems that the more time, effort and money spent on a cruise, the more difficult it becomes for a positive thinking skipper to give the order, “Run for Shelter!” and conversely, for a negative thinking skipper to give the order, ”Set Sail!” 

A man often claims that he cruises for pleasure and long-term gains and cannot see the point of preparing for unpleasant events that might never happen. Some have no such feelings but just never get around to trying their rough weather gear until the need is urgent, life threatening and then panic or freeze up and do nothing. 

"She'll be right in The Long Tern" say the Brokers to the Fundamentalists
They have said it so often in the past it has become a cult /a religion and unfortunately "a bad habit"

The very thought of boarding another ship in the open sea or a man overboard sends a shiver down the backs of many well travelled yachtsmen especially if they have never experienced these drills under really difficult conditions. 

At sea on the Global Exchange during a gale, a man is in a similar predicament to a boxer whose defences are not too sound. He is hammered about with conflicting opinions and newspaper reports until he has the reasoning powers of a small child and the drive of a tired old man hoping for the best. An angry sea refuses to be leisurely.

She is always deadly serious and it is a poor time for untried gear and new practice drills.

I use the word “man”  to denote the species of “mankind,” whose female frequently has the same desire to go sailing and undoubtedly also has equal, if not better ability in this magnificent spectator and participant sport.

Before deciding on any cruise he would be well advised to closely study the effects of the weather and ocean currents on craft they have sailed before or wish to sail in the near future. Only then can he have a close and personal understanding of her and gain a better insight into her temperament, performance, character and integrity.

Once again This can only be attempted using Technical 

Every craft will behave in her own way under the same wind, sea and weather conditions and it will be quite different from that of any other vessel.

The fine balance between safety and adventure can only be learnt with experience and lots of practice and ocean trials.

Sailing by night and by day he must sail alone with his crew relying only on each others skills, the craft’s, fittings, equipment, current ocean charts and reliable tried and tested navigational instruments. 


Salute and Gods' speed


----------



## chance fate (22 April 2007)

*Re: Fundamental vs Technical*



Captain_Chaza said:


> "Seamanship "
> 
> 
> You don't need to be a Rhodes scholar to fathom out the truth about Sweet FA
> ...





Captain,

I disagree with this statement (perhaps we are working with conflicting understanding of what Fundamental Analysis means)...  e.g. it is widely known that china is a state run economy... therefore global markets react by selling off due a trigger like the shanghai fall it's a perfect buying opportunity for the fundamentalist.... i bought into Paladin at between $7.50 and $8 ...thanks .... that's historical...  now as a current example... looking forward and NOT REACTING TO OUT OF DATE DATA as you state....  it is ALREADY widely believed that OPEC is content to have oil sit between $50 and $60 US/bbl...  if tensions ease in the middle east for a few weeks for whatever reason traders will move the oil price lower...  say it dropped to US$40/bbl....  would you be prepared to jump into an oil stock like woodside which tracks oil closely?  I would be prepared to take that chance.....  but i'd wait for the technical signals on the stock to indicate that it's fully sold down too...

I don't need to be a Rhodes Scolar to figure that out....  what is the truth about FA?


----------



## Captain_Chaza (22 April 2007)

*Re: Fundamental vs Technical*

BTW

The Going rate for a Fundamental Analyst 4 years ago was $300,000 /Year 
Do you honestly think anyone here has the necessary 
Qualifications and Number of LETTERS after their name to answer that call? 

The best you will get here or on any other forum  is what I call 
"Sweet FA" 

If you expect anymore than that, I can promise !

"You will be very disappointed" 


As always DYOR re the FA's  and TA's
Fortunately, I only have to do my research on the TA's
I have thrown every Sweet and Sour FA'er overboard years ago 

It makes life at sea a lot easier in the long term IMHO

Salute and Gods' Speed


----------



## chance fate (22 April 2007)

*Re: Fundamental vs Technical*

Captain,

you sound pretty bitter....  oh well .... chin up.... & hope you catch some good trade winds....   fare well....


----------



## tech/a (22 April 2007)

*Re: Fundamental vs Technical*



> Is that book worth a read?




The first 50 pages in my view are a *MUST* for every trader to understand.
The rest of the book introduces the reader to one way Radge trades Elliot.

Gives a good insight to a methodology---an understanding of Elliot would be a great help but not necessary.

*So YES.*


----------



## chance fate (22 April 2007)

*Re: Fundamental vs Technical*

OK...  nice one .. thanks tech/a...  will take a look .....  checked out Elliot waves on wikipedia...  first thought that springs to mind is...  if everyone followed elliot waves then everything would be predictable and no one would make a profit...  will switch threads to raise some questions....


----------



## tech/a (22 April 2007)

*Re: Fundamental vs Technical*



chance fate said:


> first thought that springs to mind is...  if everyone followed elliot waves then everything would be predictable and no one would make a profit...  will switch threads to raise some questions....




You could say exactly the same about Company Valuation from a Fundamental view.(Or undervaluation--or future valuation)


----------



## rederob (22 April 2007)

*Re: Fundamental vs Technical*



Captain_Chaza said:


> BTW
> 
> The Going rate for a Fundamental Analyst 4 years ago was $300,000 /Year
> Do you honestly think anyone here has the necessary
> ...



Charlie
Why don't you give it up.
Just because you can't make FA do what you want it to do doesn't mean that others can't.
As a long term investor, I don't need to watch the markets, except for better entry prices in the main.
I don't see the need to get panicked by short term action, and it makes life a lot easier in the long term.


----------



## rederob (22 April 2007)

*Re: Fundamental vs Technical*



tech/a said:


> You could say exactly the same about Company Valuation from a Fundamental view.(Or undervaluation--or future valuation)



tech
It's usually safest to wait for ducati to give a valuation, and then do the opposite of what he suggests; contrarian trading at its simplest.


----------



## Captain_Chaza (12 May 2022)

As a Conscientious Student of History

*I have learnt that "We Don't Learn from History"

I repeat

"Fundamental v Technical "*

I wrote this article nearly a decade ago
I can't see that anything has changed since

“No man can serve two masters,” wrote Saint Matthew.

There are two basic approaches for deciding the future direction a sailing ship of any size and design might move.

The fundamentalist approach is faced with a massive information-gathering problem. Every fact relevant to the craft must be known and weighted according to its importance and its price equation. The skipper here assumes his own interpretations and his known facts are better than average.

He will analyze all the facets of world politics and its effects on the global economic community on a regular basis. He will study each member of the global exchange from currencies and interest rates to commodities and raw materials, to the latest developments in design technologies in the multitude areas of human activity.

He then turns his head to the economic statistics price/earning ratios, dividend yields, company reports on as many ships as he can mentally digest and consume as much written matter time allows. This is truly an awesome task for any skipper even those with a crew of skilled academics on each floor of a high-rise office building.

Unfortunately for the fundamentalist by the time he receives most of his information and statistics it is hopelessly out of date. By the time he evaluates and mixes up his recipe for a rational decision the moon has moved the tides. He often complains he is living in an irrational world and that the world has just gone temporally mad. Naturally, “She’ll be right in the long term,” he always says.

How often does a ship move in the opposite direction immediately after a good or bad report? Since information is never leaked in this fairest of all sports with its strong rules of fair disclosure, he will often claim an event has already been factored into the equation by the gamblers. How often does he cling to the skimpiest of fundamental good news as the price descends deeper and deeper south?

Because this has happened so often in the past it has even turned some fundamentalist heads inside out and they have developed a reverse fundamental approach.

This down-under, upside-down fundamentalist or contrarian viewpoint has surprising much to offer. Here the skipper has acknowledged the fact that punching the latest fundamentals into his computer will result in garbage.

He has accepted the fact that everything has been leaked and that it is not a fair game at all, but All-Out War.

Also, in view of his past experiences he has decided that he hasn’t been as close to the good information chain link as he would have liked and refuses to be fair game in the future.

The Technical believes that no fundamental fact whatsoever matters unless the masses have this shared psychology and provides the only mechanism to measure this irrational and emotional component.

Any experienced campaigner knows and the novice will soon discover how deeply the counter productive aspects of tension, anticipation and anxiety alter the way a skipper sails the seas. Usually directly proportional to the funds committed.


The technical believes the oceans are extremely efficient with its global sharing of information and regularly observes the actions of others, not their talk.

The technical can put objectivity at the helm and control the nemesis of all sailors at sea on the Global Exchange namely, emotion and rationale. They provide the mechanism to set entry and exit points, set risk/reward ratios and even foster a safety and risk management approach to sailing in all types of sea and weather conditions.

Technical allows the skipper to step back and gain a better insight and perspective of the Global Exchange and carry out numerous ship surveys. A chart is worth more than a thousand words.


The technical viewpoint encompasses every participant’s knowledge and beliefs about the future direction a craft may head next. It takes into account all the known facts as well as the human interpretation of those facts. More importantly it also takes into account fundamental news not yet known to the general public and is right up to date.



Finally, the fundamental academic with the I know all attitude who has ridiculed and under estimated his technical opponent for so many years, now believes he has room on board for some technical.


Unfortunately, as more and more skippers sail on technical, more ships are now moving accordingly, there is no room onboard for any fundamentalist with his long term excuse and his minuscule amount of up to date facts. He is in fact a most dangerous dinosaur to have onboard. He must be avoided at all costs and only regarded as fair game. Whether he is a bull or a bear he cannot change his spots and will always cloud a skipper’s judgment and coarse many costly delays.

Sailing in this modern era is All about the

Technical verses Technical.

"While we stop and think, we often miss our opportunity." Publilius Syrus, 1st century B.C.
"I believe the future is only the past again, entered through another gate." Sir Arthur Wing Pinero 1893


31 March 2007




A Complete examination of our own holdings re  "The Techninal Viewpoint verses The Noise of the Fundamentalist's  have had each and everyone  of our Portfolio's  hit front on  into this  Perfect Storm at Sea
(This Captain Included)

It is amazing how we Just Don't Learn from History

The problem now is
"Who is coming in to Buy at The Bottom "
We are still Holding!
Our Children are Holding

I suppose it will be left up to our Grand-Children  AGAIN!

Only the strictest of  'Technical " is cashed up for the Bottom   IMHO

*Is there anybody out there?*



Probably All of  us have been caught out bat Sea  "AGIAIN!"


----------



## tech/a (12 May 2022)

Been out for over a month 

The only position I have is the comp 

People complicate trading. They believe
the more complex it is Fundamental or Technical
the better or more accurate it should be.

See it all the time and see failure 
The way you handle the space between entry and exit 
will determine your ability to trade profitably.


----------



## divs4ever (12 May 2022)

i don't want to be fully cashed up  , but i have SOME cash reserves ( possibly a trickle of surplus div. cash )  and some possible M&A moves  that will dump me with a handful of cash , but i am liable to be buying extras somewhere near the bottom 

 but one thing i learned in 2013 was i can't afford to wait in hope of the crash that still hasn't happened yet ( nine years and waiting .. tick tick  tick )

 i may as we lock in some ( better than ) average prices , get some growth ( better than a term deposit )


----------



## Captain_Chaza (12 May 2022)

tech/a said:


> Been out for over a month
> 
> The only position I have is the comp
> 
> ...



Did You tell anyone on this Forum so I can verity !

Your link or No Link will say it all

I wait with great anticipation


----------



## eskys (12 May 2022)

Captain_Chaza said:


> As a Conscientious Student of History
> 
> *I have learnt that "We Don't Learn from History"
> 
> ...




Aye, aye, Captain. I'm here in the dark, paddling with an oar.......it's cold and scarey.......I need a safety raft, please.


----------



## tech/a (12 May 2022)

Sure
Tomorrow I’ll show the account balance of my portfolio from x date to x date 
should do the trick it will show no movement during this capitulation.
too busy watching paint dry to do it now.


----------



## Captain_Chaza (12 May 2022)

divs4ever said:


> i don't want to be fully cashed up  , but i have SOME cash reserves ( possibly a trickle of surplus div. cash )  and some possible M&A moves  that will dump me with a handful of cash , but i am liable to be buying extras somewhere near the bottom
> 
> but one thing i learned in 2013 was i can't afford to wait in hope of the crash that still hasn't happened yet ( nine years and waiting .. tick tick  tick )
> 
> i may as we lock in some ( better than ) average prices , get some growth ( better than a term deposit )



By all means do what you feel is right for You and the family you have on board

One of the biggest mistakes I have made in these sort or situations at Sea is to throw the Babies out of the boat to support a sinking ship Just to get a cashed up for the bottom  

I promise you
You will know the bottom when you see it

First of all you will see bodies floating to the surface
and  
Then you'll hear  the Fundamentalists screaming "RECESSION is  now here"

Soon as you hear those Magical  Screaming Sounds from the Fundamentalists

It is time to go back to sea with  a Full Spread of Sail presented to the Wind


----------



## divs4ever (12 May 2022)

Captain_Chaza said:


> By all means do what you feel is right for You and the family you have on board
> 
> One of the biggest mistakes I have made in these sort or situations at Sea is to throw the Babies out of the boat to support a sinking ship Just to get a cashed up for the bottom
> 
> ...



 well to my untrained eye  , i already see recession , i see my favourite packet of biscuits shrinking , i see more and more shops staying shut ( although two were claiming 'work from home ' but are up for lease now ) just little things that suggest negative growth and declining productivity 

 i think the recession started something like a year ago  , and i have a weather eye out for the DEPRESSION 

 and i think the market will be in a REALLY SCARY  place when MQG is back at $20 , PME is back below 20 cents  , CSR is $1.30  etc etc ( and all that happened in the last 11 years , we aren't talking ancient history )

 however in the next crash  i hope to spot different bargains


----------



## eskys (12 May 2022)

Maybe we should save our money, go away and live a life, come back and live another life another time


----------



## divs4ever (12 May 2022)

eskys said:


> Maybe we should save our money, go away and live a life, come back and live another life another time



sadly no  unless your cash is in rare coins  , all that saving in fiat is doomed  ( now gold and silver might be entirely different  , maybe some well-stored wines as well )


----------



## eskys (12 May 2022)

I'll assess the situation tomorrow morning, divs. Premarket red at the moment, Europe and Asian markets down, looking rough, good luck anyway..........better to get a shut eye than going cross eyed  looking at the screen, divs. Sleep well.


----------



## tech/a (13 May 2022)

Captain_Chaza said:


> Did You tell anyone on this Forum so I can verity !
> 
> Your link or No Link will say it all
> 
> ...





As requested

You'll note that all of May up to yesterday when I bought a little is Flatlined I didn't have a position.
So avoided the carnage --- so I guess there was one on this forum who did!
	

		
			
		

		
	





Now where's that Paint Brush!


----------



## eskys (13 May 2022)

More importantly, there's wind in all our sails this morning..........


----------



## systematic (13 May 2022)

Did I miss something? Are we talking crypto, or stocks, or? Carnage? I'm fully 'in' as usual and within a few percent of an equity high. So is the broad market. Anyway, don't want to take this further away from the topic of the thread, sorry. 

@Captain_Chaza I'm assuming the fundamentalists in this thread are those who get overly religious about their technical analysis?


----------



## Ann (13 May 2022)

Captain_Chaza said:


> I promise you
> You will know the bottom when you see it
> 
> First of all you will see bodies floating to the surface
> ...



I am surprised no one seems to be seeing the black clouds gathering above the triple top except us, bet everyone will get very excited with the coming dead cat bounce eh @Captain_Chaza?

Interesting description of a bottom my Captain, 
I shall look out for it, sounds almost, dare I say, like Fundamental Analysis to me!  
	

		
			
		

		
	




I used to call it a bottom after the main indices rose above the 200dsma, however, I am now seeing profound volume spikes scattered here and there on various indices and ETFs after all the previous crashes had bottomed. My eyes are going to be peeled for these volume spikes on my charts next time.


----------



## Captain_Chaza (13 May 2022)

systematic said:


> Did I miss something? Are we talking crypto, or stocks, or? Carnage? I'm fully 'in' as usual and within a few percent of an equity high. So is the broad market. Anyway, don't want to take this further away from the topic of the thread, sorry.
> 
> @Captain_Chaza I'm assuming the fundamentalists in this thread are those who get overly religious about their technical analysis?



I  am only referring those who Bloviate on Fundamental Analysis


----------



## systematic (13 May 2022)

Captain_Chaza said:


> I  am only referring those who Bloviate on Fundamental Analysis




Thanks for clarifying. As I've said here in the past; I think the same applies to many who say they follow technical analysis (or bloviate on it...ha ha, good one, I've learned a new word today!).

Correct me if I'm wrong, but in this thread you're picturing someone who is trying to form a macro view and/or pin down the valuation (or 'real value') of a company etc. In which case, I agree.
The difference (I think) is...I paint those who approach price movement subjectively with the same brush. (i.e. picture the 'chartist' drawing lines or adding indicators...and coming up with some sort of analysis of the stock or the current macro state etc). I don't see a difference in either picture. 

In other words, the source of data (price, volume, financial statements, news/social media, macro data) doesn't make the difference between whether you're objective or subjective in your approach to investing. Or again, in other words, the very old, 'TA vs FA' thing is a pitting of 2 things that don't particularly exist (at least not in my mind).

My take on this subject is: 
I see those who make subjective, discretionary decisions and those who (at least try) to follow a quantitative approach based on empirical evidence (which is a minefield of danger, itself). Regardless of the data they use.

For example: you can give me only price data, and I'll still take a quantitative, objective and empirical based approach...vs a qualitative, subjective and theoretical approach.


----------



## Value Collector (13 May 2022)

For me, Fundamental investing just comes down to predicting the income stream of assets and comparing that to the price you are going to pay upfront, and making a decision given various factors on whether that’s a sensible price to pay for the asset, to me that’s a very rational way to approach long term investing whether you are investing in shares, businesses, real estate, bonds, farmland, intellectual property, mineral royalties, water rights etc etc etc.

Where as fundamental analysis seems to more about ignoring the underlying assets, and instead just trying to watch market signals and jump in and out of assets and making money off short term price movements. 

I guess it just comes down to your own personality as to which you prefer, I personally like being a long term holder of quality assets, so fundamental analysis suits me.


----------



## divs4ever (13 May 2022)

Value Collector said:


> For me, Fundamental investing just comes down to predicting the income stream of assets and comparing that to the price you are going to pay upfront, and making a decision given various factors on whether that’s a sensible price to pay for the asset, to me that’s a very rational way to approach long term investing whether you are investing in shares, businesses, real estate, bonds, farmland, intellectual property, mineral royalties, water rights etc etc etc.
> 
> Where as fundamental analysis seems to more about ignoring the underlying assets, and instead just trying to watch market signals and jump in and out of assets and making money off short term price movements.
> 
> I guess it just comes down to your own personality as to which you prefer, I personally like being a long term holder of quality assets, so fundamental analysis suits me.



 yes VC , i can relate to your approach 

 cheers


----------



## Captain_Chaza (13 May 2022)

OK!
Let's get REAL for a moment
Sailing the ASX or any other Global Exchange is not easy

It is all about the FA vs TA

"Can anyone here "HANDLE THE TRUTH?"


"Would a True Life at Sea Exercise Drill in  Real Time be any help?

Well, I am prepared to give my Technical Analysis on the Seaworthiness  of any craft  after any FA'er has set sail
Some sort of Declaration/Proof  of sale would naturally be required
Otherwise I would be inundated with that many requests I could not handle any

Except in the case of my Brave and Loyal Crew which I have had onboard  for close to 15 years

Unfortunately,  there is only ONE  (1) left  at sea alive  nowadays

ie: My 1st Officer Braveheart  ( Ann)

I will always furnish her with my best Seaworthy Report  I can do before she gets tied up with those greedy sweet FA'ers

She has said on another thread here on ASF that she likes charting /Sailing on shares she does not own

What you do not  realize  my  most loyal 1st mate Braveheart   Ann
You like it because you are more successful on these Lack of/ No Fundamental Knowledge

You are more successful on these trades because you are strictly working from your CHARTS

*It's As Easy As That!*

You shouldn't even know what they are doing
( That's too much information (IMHO)

What I am saying Is
Beware of the Bloviate Sweet FA'ers with all their noise

It can be very deafening out at sea and "* Mistakes Will Happen"

The Charts Say it All
If they don't then just wait till they do !*

It's not rocket science here
*It's just the Simple art of SEAMANSHIP*



I


----------



## tech/a (13 May 2022)

Is there anything of interest in this thread other than waffle?


----------



## Captain_Chaza (13 May 2022)

tech/a said:


> Is there anything of interest in this thread other than waffle?



Nothing for You!

My advise to you is keep reading the Company reports  over the weekend and BUY at Friday's close on Monday 

The only place you can do this on this PLANET is at the ASF Monthly  Competition
Crikey!
Who else  on this PLANET runs a Competition based on a Friday's Close!!! 
That Starts on  Monday ???


----------



## tech/a (13 May 2022)

Your right 

Those that know what they are doing don’t need threads like this 
Those that don’t know need threads like this 
All they show ( Threads like this ) is what you don’t know.

Delusion is like dementia you function but you’ve got no idea what you’re doing !


----------



## Boggo (13 May 2022)

tech/a said:


> Is there anything of interest in this thread other than waffle?




I was hoping there would be too but I’m fundamentally 100% with you on this one.


----------



## Captain_Chaza (13 May 2022)

tech/a said:


> Your right
> 
> Those that know what they are doing don’t need threads like this
> Those that don’t know need threads like this
> ...



*I am more than happy to see you go
You contribute NOTHING*


----------



## tech/a (13 May 2022)

Oh I’m not sure about that 
20000 posts 
5300 reactions 

Ya got a bit of work to do on the contribution side of the ledger .
A Fundamental observation..


----------



## Captain_Chaza (13 May 2022)

tech/a said:


> Oh I’m not sure about that
> 20000 posts
> 5300 reactions
> 
> ...



All I meant
" You are not welcome on this thread"  and
 that you have contributed" Nothing to this Thread"
Whether you have contributed in other threads  is of no  interest to me


----------



## Value Collector (13 May 2022)

Value Collector said:


> For me, Fundamental investing just comes down to predicting the income stream of assets and comparing that to the price you are going to pay upfront, and making a decision given various factors on whether that’s a sensible price to pay for the asset, to me that’s a very rational way to approach long term investing whether you are investing in shares, businesses, real estate, bonds, farmland, intellectual property, mineral royalties, water rights etc etc etc.
> 
> Where as fundamental analysis seems to more about ignoring the underlying assets, and instead just trying to watch market signals and jump in and out of assets and making money off short term price movements.
> 
> I guess it just comes down to your own personality as to which you prefer, I personally like being a long term holder of quality assets, so fundamental analysis suits me.



oops, The second paragraph was meant to read "Where a technical analysis"


----------



## tech/a (14 May 2022)

*Warning* Personal Content *on topic*.

I think there is an essential component missing in the Technical/Fundamental discussion

*Systematic trading *is Often bracketed with technical trading.

To me, *Fundamentals* are as accurate as long Term Technical analysis. regardless of the investment method used the more extended the timeframe the more likely conditions will change. 

All analyses used by an experienced technician, Fundamental, Technical, and Systematic work fine until they don't. That Don't is usually a macro change in either the overall market OR in the individual stock, index, or commodity being traded.

*Technical* analysis and more specifically for me Charting give me a VISUAL representation of what's happening in all markets and I can see it in both MACRO and MICRO Frames. Not only that but it can show me where I'm right and Where I'm Wrong again visually sometimes (in Minutes when trading Futs) but always quick enough to take action. The biggest drawback is NOT acting on what the Chart is saying. Holding on to a personal belief can be very expensive. There have been discussions on my part in both the *MAY* thread and* FMG* thread ---not saying people are wrong in how they trade but for ME waste when there needn't be.

*Systematic Trading* is a gathering of buy, sell and risk management parameters fed into a program that you trade if under testing you find it robust and returning a good and consistent profit. The disadvantage is that you cannot use discretion if you wish to mimic the results under testing. You're expecting the market to remain similar to the testing period and the System to return similar tested returns.

One thing I also find amusing is the mantra " I'm at a paper loss of 50%" These are delusional comments the value of your portfolio or commodity is what you can get for it at the click of the mouse *NOW*.

*Psychology *plays a massive role particularly if you have no way of replacing funds (retirement without passive income). Even in a $1 million or more fund, the loss of $10000 is unpalatable and if it is your Risk management needs attention. Otherwise, a $100,000 loss could be next. I've seen this in people I know.
Sure if undermanagement then they have no control and adhere to the paper loss mantra and the other well-honed one "Its time *IN* the market not *TIMING* the market"

All well and good if you have the time and resources.


----------



## Ann (14 May 2022)

Captain_Chaza said:


> She has said on another thread here on ASF that she likes charting /Sailing on shares she does not own
> 
> What you do not realize my most loyal 1st mate Braveheart Ann
> You like it because you are more successful on these Lack of/ No Fundamental Knowledge
> ...



Ahoy, my Captain!

A goodly percentage of my charts carry a brief description of their cargo (what they do/dig up). I always read the notices of anything I hold. As far as using FA to guide my investments...noooo! For me, I only see FA as a company spinning a good story and their figures are so far in the past to be useless. The chart movements contain all the current FA that I need and it is totally up to date. 

Having said that, I have seen charts that have been built using FA, unrelated to price, this is a fascinating thing and if a person can see FA in their heads like I saw FA on these particular charts, then I might acknowledge FA and its value. One of the contributors here was working on that a few years ago but I have forgotten his name.

As far as charting something I don't hold, it is merely the pleasure of being able to read without bias. I actually don't have a whole lot of difference re the success or failure rate between a held stock reading or an opined stock reading. On reflection, I think the charts I read for myself are more likely to be successful as I spend more time thinking about them and I have skin in the game.


----------



## Value Collector (14 May 2022)

tech/a said:


> *Psychology *plays a massive role particularly if you have no way of replacing funds (retirement without passive income). Even in a $1 million or more fund, the loss of $10000 is unpalatable and if it is your Risk management needs attention. Otherwise, a $100,000 loss could be next. I've seen this in people I know.
> Sure if undermanagement then they have no control and adhere to the paper loss mantra and the other well-honed one "Its time *IN* the market not *TIMING* the market"




It depends what you class as a loss, I mean if you have a $1 Million portfolio, and is down 1% today ($10,000) thats no something I would be losing sleep over, thats just standard daily fluctuations. If you sold and locked in that loss or the $10,000 was in a stock that went to $0 permanently I guess some people might be upset, but if its just share price ups and downs, the long term holder shouldn't be fussed if their underlying assets are sound.

I mean if you owned a great piece of realestate, with a long lease would you really care if the price of the realestate went up or down by even 10% due there not being the right buyers around that week, if you weren't planning on selling probably not.

The liquidity of the share market and the minute by minute pricing changes causes some people to feel that they need to care about those daily movements, I believe this is often a mistake and they would feel the same about any other business they owned, but it sets them up for a life of over activity and often under performance and mediocre returns.


----------



## Ann (14 May 2022)

BlackRock is into cash, good enough for me!

BlackRock's Rieder: 'Holding Our Cash With Both Hands'​


----------



## Captain_Chaza (14 May 2022)

Ann said:


> BlackRock is into cash, good enough for me!
> 
> BlackRock's Rieder: 'Holding Our Cash With Both Hands'​



CASH ? No Cash Here


----------



## divs4ever (14 May 2022)

Ann said:


> BlackRock is into cash, good enough for me!
> 
> BlackRock's Rieder: 'Holding Our Cash With Both Hands'​




 for whom is it holding the cash , last i heard it had been the ( unofficially ) anointed fund-manager for the Fed ( or was it the Treasury )

 AND Blackrock  was busy  buying up residential properties at a massive rate 

 if they mean OUR ( Blackrock's)  personal war chest not the clients portfolio  , that is less impressive


----------



## Captain_Chaza (14 May 2022)

In figurative lingo 1st Mate Braveheart

A seaman and  all the others of course  who venture out to  sea should always know which Currency is best for them in their own  Time and Place

When I was at my RICHEST
The little Aussie Battler was BIGGER than the BIG Buck
Look at the Chart 
It was better than ONE $ for ONE $

Coca-Cola was cheap
Merc's and BMW's were  attainable

I show the charts  below for your perusal

I have placed a Vertical line @ Happy New Year 2022  just to FREEZE the Fundamental STRESS and the Technical STRESS of the day ON THAT DAY

*Let's see how we compare   FA vs TA Stress Tests*

I'd like to see ANY Fundamental Analyst's out there to produce any * "Financial Stress Tests"* on ANYTHING  You and I can  trade

Some Fundamentalists  seem to to think
They Can Do It on the Banks

And the CRAZIEST of ALL the Sweet FA'ers  I have ever seen  Think they can Curb INFLATION

WAKE UP! My Dear 1ss Mate Braveheart

*"THE ONLY CURE FOR INFLATION is INFLATION"*
Prepare for it and Be Sea-ready in a BIG way

This Could Be Generational!









*CASH is only relative to "The BIG Buck"



*


----------



## frugal.rock (14 May 2022)

I'm not going to wade through the whole thread, just say my thoughts.

I don't think it should be TA Vs FA, rather TA and FA.

Works for me.
Data is data, whether TA or FA.
The 2 are married in a natural way, in my opinion, and statistics and probability play a part on both endeavours.

Without detailed analysis, my thoughts are, a weighting of around 60% TA to 40% FA sounds about the right mix.

Charts change, depthsounders prove this.


----------



## divs4ever (15 May 2022)

Captain_Chaza said:


> "THE ONLY CURE FOR INFLATION is INFLATION"



 translated for the masses  .. high prices  and limited cash/credit  really puts pressure on demand  and try and price the product to cover those costs 

 part of the problem is producers  have to guess  how much resource costs will rise  for the next production run 

 remember many businesses  are successful because they can sell a LOT of their product  so not only  are resource costs rising  ( and normal production costs ) but they are losing efficiency of scale 

 now if inflation starts losing jobs  , there are simply less cashed up consumers 

 maybe the Captain should consider a submarine  as a back up plan  , there should be some sunken treasure in those wrecks

 cheers


----------



## Mohammed Hazabig'un (15 May 2022)

Ahoy.

As our ASX 200 dropped below the 200 dma this week, heck it even did it for 5 consecutive days ( @Nick Radge ) all the Tech heads were bailing. But the Fundamentalists realised the economic Fundamentals didn't support the notion of a drop below 200dma indicating a Bear Market YET, so didn't panic.

As the dear Captain wishes to challenge someone, I'd personally like to see him take on @tech/a or a Fundamentalist (Economist) like @over9k . I'd suspect Over9k might wipe the floor with him though.

(Some of these Tech heads sound like rummy Sailors at times, bit of RSI from playing with their ADX or ROC too much. )


----------



## Ann (15 May 2022)

divs4ever said:


> for whom is it holding the cash , last i heard it had been the ( unofficially ) anointed fund-manager for the Fed ( or was it the Treasury )
> 
> AND Blackrock was busy buying up residential properties at a massive rate
> 
> if they mean OUR ( Blackrock's) personal war chest not the clients portfolio , that is less impressive




Dunno, I have watched them, along with Vanguard massively reducing their holdings in some of the participants of their ETF funds for a while now, so I have no idea who their clients are. Although if you read some of the company notices they were shorting some companies like crazy it is probably their own money, the shorting proceeds would not have gone to the mug punters who hold their index funds. Not for the likes of you or me to ever know.



Mohammed Hazabig'un said:


> As our ASX 200 dropped below the 200 dma this week, heck it even did it for 5 consecutive days ( @Nick Radge ) all the Tech heads were bailing. But the Fundamentalists realised the economic Fundamentals didn't support the notion of a drop below 200dma indicating a Bear Market YET, so didn't panic.




Welcome MH, first post, yet you are well familiar with the participants on this forum, so well done Captain for drawing out a landlubber who watches without any contribution until now. Hopefully, we will see more from you finally! Going by your name you have a feeling of superiority, not an uncommon characteristic for a few of the blokes here, so you should fit in well!  @Joe Blow is this really a first-time poster, or someone taking on a second persona?

As a "Tech head" I can assure you I didn't bail, nor did I panic, I sold some stocks at a pre-determined price. I will continue to liquidate my current holdings over this coming week as the FOMOs rush back in. I have certain parameters in which I trade. I have no desire to trade when our markets enter bear market status with my current holdings. I prefer to have re-adjusted my portfolio by that time.


----------



## Joe Blow (15 May 2022)

Ann said:


> @Joe Blow is this really a first-time poster, or someone taking on a second persona?




I do not see any evidence that this account is connected to any others. So for the moment I will assume that it is a genuine first time poster. If that changes I will let you know.


----------



## Ann (15 May 2022)

I enjoyed this article today, I have no idea who he is or his credentials other than he is not an old fart. Here is a small sample, more here....
Price Anchoring and Broken Stories​


> *The Two Sides of Value*​
> Traditional finance teaches that every asset can be valued on fundamental metrics alone: cash flows, earnings, capital structure, and sales growth are all that matter. But in reality, we know that isn't true. Fundamentals don't have a monopoly on valuations. *Fundamentals are engaged in a perpetual game of tug-of-war with stories.*
> 
> The story of what an asset "could be" plays a huge role in what investors are willing to pay for an asset. Steve Jobs understood the role of storytelling better than most. Elon Musk's storytelling has turned Tesla into the world's most valuable automaker while spending $0 on marketing. Bitcoin's entire value is largely predicated on stories, from an inflation hedge, to a foil for the villainous Federal Reserve, to the power of the almighty permission-less blockchain. The value that the market gives these stories determines the price that you will pay for these assets.
> ...


----------



## divs4ever (15 May 2022)

Ann said:


> Dunno, I have watched them, along with Vanguard massively reducing their holdings in some of the participants of their ETF funds for a while now, so I have no idea who their clients are. Although if you read some of the company notices they were shorting some companies like crazy it is probably their own money, the shorting proceeds would not have gone to the mug punters who hold their index funds. Not for the likes of you or me to ever know.



 according to a Vanguard statement/disclosure  sometime back  , Vanguard lends shares  to enhance  unitholder returns , however i have seen no similar statement from BlackRock ( or State Street ) despite both quite obviously lending out selected shares  as disclosed it changes of shareholding documents 

i suppose it is only a matter of time before some curious analyst  crunches the numbers  on passive index fund returns over the return period ( last 3 years )


----------



## Ann (15 May 2022)

Captain_Chaza said:


> CASH ? No Cash Here



HAA HAA HAA, hilarious. I have no desire to be shot down without cash!


Captain_Chaza said:


> WAKE UP! My Dear 1ss Mate Braveheart



I already spotted the Big Buck and charted it somewhere. I am not going to re-do the chart, I will just shove the same one here. I did a potential swing trade calc just for fun.


----------



## divs4ever (15 May 2022)

Ann said:


> I enjoyed this article today, I have no idea who he is or his credentials other than he is not an old fart. Here is a small sample, more here....
> Price Anchoring and Broken Stories​



 interesting , however i see the writer falls into the US investing bias  , where capital gains is king  , now that may be compelling in the US tax structure ( before inflation starts into a full run )

 Australian investors  should be aware  that investing for investment returns ( dividend  and other capital returns like demerged entities ) can be worthwhile as well ( as least as long as franking credits are a factor in the Australian taxation system )


----------



## Captain_Chaza (15 May 2022)

Mohammed Hazabig'un said:


> Ahoy.
> 
> As our ASX 200 dropped below the 200 dma this week, heck it even did it for 5 consecutive days ( @Nick Radge ) all the Tech heads were bailing. But the Fundamentalists realised the economic Fundamentals didn't support the notion of a drop below 200dma indicating a Bear Market YET, so didn't panic.
> 
> As the dear Captain wishes to challenge someone, I'd personally like to see him take on @tech/a or a Fundamentalist (Economist) like @over9k . I'd suspect Over9k might wipe the floor with him though.




We are Professionals Helping others with our experience

You are an insult to the Human race
and Not Welcome on this Thread again

 Not only that

I will have you "Walk the Plank" never to be seen or heard of again on this thread

Put that on your big'un and smoke it

Att 1st Officer Braveheart

PM me the Manual on "Blocking " so that 'It" does not learn anything that this
thread has and will have to offer in the future


----------



## Captain_Chaza (15 May 2022)

frugal.rock said:


> I'm not going to wade through the whole thread, just say my thoughts.
> 
> I don't think it should be TA Vs FA, rather TA and FA.
> 
> ...



What I am saying is that Any Piece of FA distorts your reading of the Charts
Yes, the Weather and Sea Conditions Change Every Day   and in Melbourne sometimes 4 times a day

The charts cannot Predict /Forecast future Sea and Weather conditions
All they can tell us is
" How she is Handling the Conditions NOW"

I'll start with Captain Cathie Woods  on The Good Ship  ARKK




Sailing is all about feeling the stress on all parts of the Ships
Green Candlesticks shows a Good Day ,Week or Month at Sea
Eaclh colored Line, Dot, Dash and Oscillator aids the Captain with his Seamanship skills

As you can See
When she is Going NORTH  on top of the water All the Colored Instruments /Aids are Under
the Craft 
When the Captain wishes to go SOUTH the opposite occurs and they are on Top of the craft

I have Placed a Vertical Line on Happy New Year's Eve 2022 so we can compare the Seaworthiness on the crafts and their performances this year in all types of conditions


----------



## Value Collector (15 May 2022)

This video is interesting, Warren Buffett talks about how he spent years working on Technical Analysis in the first 8 years as an investor, but it wasn’t until he started fundamental analysis that his fortunes really took off. 

The first 3 mins of the video is where he discusses his TA time.


----------



## over9k (15 May 2022)

Mohammed Hazabig'un said:


> Ahoy.
> 
> As our ASX 200 dropped below the 200 dma this week, heck it even did it for 5 consecutive days ( @Nick Radge ) all the Tech heads were bailing. But the Fundamentalists realised the economic Fundamentals didn't support the notion of a drop below 200dma indicating a Bear Market YET, so didn't panic.
> 
> ...



So much of AU depends on china, and china's under quite a few lockdowns at the moment (their vaccine is **** and they won't use the western ones). Not going to see a great deal of action here until the lockdowns etc are lifted.


----------



## Captain_Chaza (15 May 2022)

Captain_Chaza said:


> Sailing the IVV  One Week at a Time







Sailing the XLK  One Wekk at a Time



Sailing the  IWM  One Week at a Time


----------



## Ann (15 May 2022)

Value Collector said:


> This video is interesting, Warren Buffett talks about how he spent years working on Technical Analysis in the first 8 years as an investor, but it wasn’t until he started fundamental analysis that his fortunes really took off.



From 11 years old until 18 years old he says he tried to use charts.  I could imagine a youngster would never have the patience to hand draw charts as there were no charting programmes back 70 odd years ago. I agree with him about doing post mortems, they are an essential part of my trading.


----------



## Mohammed Hazabig'un (15 May 2022)

Apologies Captain, I get a bit carried away on Sundays, reading the Scriptures and all.

Make no doubt about it, on the 7th day the Lord created @tech/a @Skate @over9k @peter2 @systematic and  @Garpal Gumnut who each peaked my interest in Charts, Occilators, Economics, Systematic investing, and linguistical abilities.


----------



## Captain_Chaza (15 May 2022)

Sailing the EOG  One Week at a Time




Sailing the ALB  One Week at a time



Sailing the FCX  One Week at a time


----------



## divs4ever (15 May 2022)

Ann said:


> From 11 years old until 18 years old he says he tried to use charts.  I could imagine a youngster would never have the patience to hand draw charts as there were no charting programmes back 70 odd years ago. I agree with him about doing post mortems, they are an essential part of my trading.



 actually back all those decades  ago  , the BIG danger would be stale data  to base those charts on  , 

 so calculating charts   on lagging data would have made it incredibly difficult to refine your technique 

 it is bad enough trying FA on data you suspect might be six months old 

 ALSO Warren was probably only tracking one or two stocks at a time 

 PS i try not to let my study subject die , before i run an in-depth analysis  ( i still get caught by some sudden deaths , but have jumped  on a different horse  when i feel the current ride  tiring several times  )


----------



## Ann (15 May 2022)

divs4ever said:


> actually back all those decades ago , the BIG danger would be stale data to base those charts on ,



I think most charting was done on the end-of-week price and that would be published in the newspapers of the day, so not really that out of date.

My favourite book by Stan Weinstein "Secrets For Profiting in Bull and Bear Markets" is his commentary on hand-drawn charts. He even gave the calculations for drawing Moving Averages I seem to remember. Must read it again, it has been a while. All his charts were hand-drawn weekly, lots of work. @Captain_Chaza used hand-drawn charts in the early days. I give much kudos to people who have done the hard yards before us. These people are the real deal!


----------



## Captain_Chaza (15 May 2022)

Sailing the LIT  One Week at a Time



Sailing the GL1 One week at a time



Sailing the LKE One Week at a Time


----------



## Value Collector (15 May 2022)

Ann said:


> From 11 years old until 18 years old he says he tried to use charts.  I could imagine a youngster would never have the patience to hand draw charts as there were no charting programmes back 70 odd years ago. I agree with him about doing post mortems, they are an essential part of my trading.



I think you are under estimating how intense Warren was as a youngster, also he didn’t have the distractions kids has these days, and spent every Saturday at his dads stock broking firm.


----------



## Ann (15 May 2022)

Ahoy @Captain_Chaza, what are your three weekly moving averages if that is not a trade secret? With respect Captain you may need to translate into words for the FAers what you see on the charts or else it is meaningless for them and the whole exercise of this thread is moot.


----------



## Value Collector (15 May 2022)

divs4ever said:


> actually back all those decades  ago  , the BIG danger would be stale data  to base those charts on  ,
> 
> so calculating charts   on lagging data would have made it incredibly difficult to refine your technique
> 
> ...



Share prices were printed in the paper daily, not to mention that warrens father was a stock broker, and had a ticker machine in his office.


----------



## Ann (15 May 2022)

Value Collector said:


> I think you are under estimating how intense Warren was as a youngster, also he didn’t have the distractions kids has these days, and spent every Saturday at his dads stock broking firm.



So his father was a stockbroker, which would help regardless of TA or FA. 

Really I think it comes down to a right-sided brain or left-sided brain as to one's analysis preference. I am thinking the right-siders are more likely to favour charts and the left-siders prefer figures. This could be a load of cobblers, of course, it is based on nothing more than an unresearched guess.


----------



## Captain_Chaza (15 May 2022)

Ann said:


> So his father was a stockbroker, which would help regardless of TA or FA.
> 
> Really I think it comes down to a right-sided brain or left-sided brain as to one's analysis preference. I am thinking the right-siders are more likely to favour charts and the left-siders prefer figures. This could be a load of cobblers, of course, it is based on nothing more than an unresearched guess.



Cricky Braveheart
My father was a Cobbler  and a very  good and valued one
Anyway
You don't need TA or FA when you are an Insider
He blames his charts to  and his limited FA to avoid prosecution

It has always Worked


----------



## divs4ever (15 May 2022)

Captain_Chaza said:


> Cricky Braveheart
> My father was a Cobbler  and a very  good and valued one
> Anyway
> You don't need TA or FA when you are an Insider
> ...



 YEP ! just hanging around parties was good enough for Renee Rivkin 

 so the odd invite ( as a tag-along  with dad ) is enough for the stray bit of gossip  ( the lubricated often talk shop )


----------



## Ann (15 May 2022)

Captain_Chaza said:


> You don't need TA or FA when you are an Insider
> He blames his charts to and his limited FA to avoid prosecution












						Warren Buffett writes The Post to say Activision buy wasn’t based on insider info
					

Berkshire Hathaway Chairman Warren Buffett adamantly denied that he or any other investors at the firm had advance knowledge of Microsoft’s plan to buy Activision-Blizzard.




					nypost.com
				



Yes, I guess FA is easier to fudge if you are doing insider trading.


----------



## Captain_Chaza (15 May 2022)

divs4ever said:


> YEP ! just hanging around parties was good enough for Renee Rivkin
> 
> so the odd invite ( as a tag-along  with dad ) is enough for the stray bit of gossip  ( the lubricated often talk shop )



Burgers once a week With Bill Gates 
Well ,What do you think they discussed
  I suggest  it was about New Aged Gaming Opportunities Microsoft bought


----------



## Captain_Chaza (15 May 2022)

Sailing the GBTC  One week at a Time



Now that you have ship surveyed these Technical Indicators  on a multitude of crafts in all types of Sea and Weather conditions

Are you a Buyer  Right NOW?


----------



## Value Collector (15 May 2022)

Ann said:


> So his father was a stockbroker, which would help regardless of TA or FA.
> 
> Really I think it comes down to a right-sided brain or left-sided brain as to one's analysis preference. I am thinking the right-siders are more likely to favour charts and the left-siders prefer figures. This could be a load of cobblers, of course, it is based on nothing more than an unresearched guess.



His father was a stock broker that got him interested in shares, but as he said in the video, it was his introduction to Benjamin grahams value approach that made him into the great investor he is today, he took grahams model and built on to it.


----------



## Value Collector (15 May 2022)

Captain_Chaza said:


> Burgers once a week With Bill Gates
> Well ,What do you think they discussed
> I suggest  it was about New Aged Gaming Opportunities Microsoft bought



Bill Gates has very little to do with Microsoft these days, he has no official role at the company, and owns less than 2% of it, which makes it less than 5% of his total investment portfolio.

In fact he owns more of Buffets Berkshire Hathaway than he does of Microsoft, which due to Berkshires large Apple holding means he owns nearly more of Apple than he does Microsoft, which is interesting.


----------



## sptrawler (15 May 2022)

Value Collector said:


> Bill Gates has very little to do with Microsoft these days, he has no official role at the company, and owns less than 2% of it, which makes it less than 5% of his total investment portfolio.
> 
> In fact he owns more of Buffets Berkshire Hathaway than he does of Microsoft, which due to Berkshires large Apple holding means he owns nearly more of Apple than he does Microsoft, which is interesting.



Why is that, didn't microsoft have to bail out apple years ago, i would think Gates has plenty of info and fingers in both platforms.
The good thing about being old, you remember $hit, until you don't.  





__





						Aug. 6, 1997: Apple Rescued — by Microsoft
					

1997: Microsoft rescues one-time and future nemesis Apple with a $150 million investment that breathes new life into a struggling Silicon Alley icon. In a remarkable feat of negotiating legerdemain, Apple co-founder Steve Jobs got needed cash — in return for non-voting shares — and an assurance...




					www.wired.com


----------



## Value Collector (15 May 2022)

sptrawler said:


> Why is that, didn't microsoft have to bail out apple years ago, i would think Gates has plenty of info and fingers in both platforms.
> The good thing about being old, you remember $hit, until you don't.
> 
> 
> ...



It’s interesting in that Bill was the founder of Microsoft, which in a lot of ways is a revile of Apple, but now he has been selling down his Microsoft ownership, and now indirectly owns as much if not more of Apple.


----------



## Mohammed Hazabig'un (17 May 2022)

Ahoy 1st Officer @Ann , can you please pass on my apologies to the Captain if I  offended with my "social dyslexia". He is obviously a Skipper very experienced in the use of the Charts and his Sextant to navigate the high Seas. I like the old Salty and there's a lot the other Chartists here can learn from him.


----------



## Captain_Chaza (17 May 2022)

*Sailing the AUD against the USD   One Day at a Time*

 Here comes The little Aussie Battler
Hold onto your Commodity classes of Sail
and Hold on tight to your hats


----------



## Mohammed Hazabig'un (18 May 2022)

Chartists don't like to read the Economic News because it clouds their interpretation of Charts.
Even Warren Buffett says looking at Economic News is a fools errand.
Research suggests you're either a Momentum Trader, a Value Investor or a Buy n Holder if you're sane.
So what's a person formally trained in other aspects of Value Investing doing working on his Economic interpretation skills? Maybe Astrology would've been a better choice? There is method and logic to my madness I assure everyone. Time will tell.


----------



## Captain_Chaza (18 May 2022)

*Sailing the AUD against the USD  
3 Minutes at a Time  Is Breathtaking*

A Man of the Sea ( as in Mankind ) must  always be prepared for CHOPPY Seas

When the going gets Rough the Tough  hark back to the  beginnings of TA





NB; the MACD Divergence


----------



## Ann (19 May 2022)

Value Collector said:


> His father was a stock broker that got him interested in shares, but as he said in the video, it was his introduction to Benjamin grahams value approach that made him into the great investor he is today, he took grahams model and built on to it.



I have been thinking about Warren's success over the last few days (been under the weather and laid low for the last few days). I think he has created the most successful fund because neither he nor Charlie syphon off profits from their investments for themselves or their shareholders, they never paid dividends, and all the profits were re-invested year after year. The companies they hold pay dividends which remained in the company, time and inflation increased the value of the holding companies as well which then reflected in BH bottom line. I think his success is basically the Rule of 72 more than any great fundamental analysis. I am convinced a lot of his success comes from inside information as well.


Mohammed Hazabig'un said:


> Ahoy 1st Officer @Ann , can you please pass on my apologies to the Captain if I  offended with my "social dyslexia". He is obviously a Skipper very experienced in the use of the Charts and his Sextant to navigate the high Seas. I like the old Salty and there's a lot the other Chartists here can learn from him.




I have passed on your message but no guarantees. The Captain has had over forty years of experience sailing the markets and has a lot of knowledge if one sits quietly and listens. I am thrilled he has started to post on ASF regularly, he is a gem with a wealth of knowledge.


----------



## Value Collector (19 May 2022)

Ann said:


> I have been thinking about Warren's success over the last few days (been under the weather and laid low for the last few days). I think he has created the most successful fund because neither he nor Charlie syphon off profits from their investments for themselves or their shareholders, they never paid dividends, and all the profits were re-invested year after year. The companies they hold pay dividends which remained in the company, time and inflation increased the value of the holding companies as well which then reflected in BH bottom line. I think his success is basically the Rule of 72 more than any great fundamental analysis. I am convinced a lot of his success comes from inside information as well.
> 
> I have passed on your message but no guarantees. The Captain has had over forty years of experience sailing the markets and has a lot of knowledge if one sits quietly and listens. I am thrilled he has started to post on ASF regularly, he is a gem with a wealth of knowledge.



Yes, retaining all earnings has allowed those earnings to compound, but it’s their ability to average over 20% per year returns for 60years that has allowed those retained earnings to grow.

Unless you are earning a high investment return, retaining earnings won’t help you, and that is a big part of buffets success, he is a great capital allocated, he knows which of his companies he should be sucking money out of and which he should be pumping money into.


----------



## divs4ever (19 May 2022)

Value Collector said:


> Yes, retaining all earnings has allowed those earnings to compound, but it’s their ability to average over 20% per year returns for 60years that has allowed those retained earnings to grow.
> 
> Unless you are earning a high investment return, retaining earnings won’t help you, and that is a big part of buffets success, he is a great capital allocated, he knows which of his companies he should be sucking money out of and which he should be pumping money into.



 his success isn't as easy as it sounds   , since he often has a big war-chest of available cash  he sometimes does complex deals  like preference shares with attaching warrant or options   , something like MacQuarie Bank would do   when  loaning to a troubled company  ( at the time )


----------



## Value Collector (19 May 2022)

divs4ever said:


> his success isn't as easy as it sounds   , since he often has a big war-chest of available cash  he sometimes does complex deals  like preference shares with attaching warrant or options   , something like MacQuarie Bank would do   when  loaning to a troubled company  ( at the time )



Firstly I didn’t say his success was easy, it takes a lot of work and knowledge, and I high degree of emotional stability and self confidence.

But, these days he has a big war chest, but he didn’t start with one, he started out with a couple of thousand dollars saved from childhood jobs.

In fact his investment returns in the early years before he had billions have been better than that of the latter years, as Berkshire has grown larger the investment returns have decreased, but have still averaged over 20% over his 60 year career.


----------



## Value Collector (19 May 2022)

If you want an idea of how small Warrens fund was when he started, check out this 2 min video clip of a former neighbour of Buffett’s talking about how Warren came to him and asked him to invest right at the start.

The Neighbor was Don Keogh who years later became the President of Coca-cola, but you can tell he regrets turning Buffett down and not investing when Warran asked.


----------



## systematic (19 May 2022)

...and if you strip everything away (leverage, private companies, companies he wholly owns etc) and _only_ look at his stock picking...it still shows he was brilliant at it...along with having the discipline and tenacity to never waver through decades of ups and downs (i.e. he conquered the biggest mountain of all, IMO; his own behaviour)


----------



## divs4ever (19 May 2022)

Value Collector said:


> Firstly I didn’t say his success was easy, it takes a lot of work and knowledge, and I high degree of emotional stability and self confidence.
> 
> But, these days he has a big war chest, but he didn’t start with one, he started out with a couple of thousand dollars saved from childhood jobs.
> 
> In fact his investment returns in the early years before he had billions have been better than that of the latter years, as Berkshire has grown larger the investment returns have decreased, but have still averaged over 20% over his 60 year career.



no you didn't , but some fund managers clearly imply  it was  

 and yes he would do a lot of research  and discussion with Charlie and crunch plenty of numbers  like any good fund manager   but when you have $US 50 billion ( plus ) in available cash  you can put on the eye-shade  and sleeve garters  and behave like a corporate banker

 you can do some things  when you are investing one or two  thousand   that you can't do when trying to park a million  , but investing one million  opens doors that a small investor will never even see let alone enter 

 ( for example $US 50 billion would buy Twitter  , but Warren and Charlie aren't the slightest bit interested in it )

 and return levels come and go  the next big winner could be walking  into reception now or still 10 years away 

 only Bernie Madoff made regular returns like clockwork


----------



## divs4ever (19 May 2022)

Value Collector said:


> If you want an idea of how small Warrens fund was when he started, check out this 2 min video clip of a former neighbour of Buffett’s talking about how Warren came to him and asked him to invest right at the start.
> 
> The Neighbor was Don Keogh who years later became the President of Coca-cola, but you can tell he regrets turning Buffett down and not investing when Warran asked.




 i suppose Don was lucky  Warren didn't carry a grudge ( Warren probably held enough Coca-Cola stock by the time Don  was appointed President  to block the nomination )


----------



## Value Collector (19 May 2022)

divs4ever said:


> i suppose Don was lucky  Warren didn't carry a grudge ( Warren probably held enough Coca-Cola stock by the time Don  was appointed President  to block the nomination )



No actually Don was already President in the 80’s when Warren started buying shares, there is another video where Don talks about how he was noticing a lot of purchases coming from Omaha, and suspected it might have been his former neighbour  (Don had moved to Atlanta by this stage), so he called Buffett and said “Hi Warren, you wouldn’t happen to be buying a share or two of Coke are you”, Buffett said he was and the rest is history.


----------



## Value Collector (19 May 2022)

divs4ever said:


> no you didn't , but some fund managers clearly imply  it was
> 
> and yes he would do a lot of research  and discussion with Charlie and crunch plenty of numbers  like any good fund manager   but when you have $US 50 billion ( plus ) in available cash  you can put on the eye-shade  and sleeve garters  and behave like a corporate banker
> 
> ...



Yep of course, but the point is you don’t go from $10,000 to $50 Billion by being one of the Muppets, Buffett has grown and developed his knowledge and skill and succeed at every level along the way.

So people that say things like “he only does well because of big Billion dollar private deals” or “he only does well because he buys whole companies” etc etc are simply dead wrong, he has done well from the start.

One moment of thought on the subject shows that you won’t ever get to making deals in the Billions or millions unless you master the lower levels first, which he clearly did.

That is a key part of his success, he has taken simple fundamental ideas, and continually grown and found ways of applying them as he continued to go up through the levels from school kid to global magnate.


----------



## divs4ever (19 May 2022)

Value Collector said:


> Yep of course, but the point is you don’t go from $10,000 to $50 Billion by being one of the Muppets, Buffett has grown and developed his knowledge and skill and succeed at every level along the way.
> 
> So people that say things like “he only does well because of big Billion dollar private deals” or “he only does well because he buys whole companies” etc etc are simply dead wrong, he has done well from the start.
> 
> ...



 so did i in the first 10 years ( do pretty good )  ( starting early in 2011 was a BIG help , rather straight talent , i admit ) but the big difference between Warren and i  is , i don't have another 50 years of investing in me to catch up and match trading records 

 so far 2022 hasn't been a disaster ( but could turn into one later in the year )

 actually from what i have read on Buffet ( and i haven't read close to everything ) his best deals  were cash injections to deeply distressed companies ( that the big banks probably wouldn't have touched  ) stuff like warrants and preference shares ( with attached options ) when a standard share placement would probably fall short ( he didn't buy the whole company but enough to put a director on the board  to make sure issues were resolved  .. a  bit like Australia's Millners )


----------



## Value Collector (19 May 2022)

divs4ever said:


> so did i in the first 10 years ( do pretty good )  ( starting early in 2011 was a BIG help , rather straight talent , i admit ) but the big difference between Warren and i  is , i don't have another 50 years of investing in me to catch up and match trading records
> 
> so far 2022 hasn't been a disaster ( but could turn into one later in the year )
> 
> actually from what i have read on Buffet ( and i haven't read close to everything ) his best deals  were cash injections to deeply distressed companies ( that the big banks probably wouldn't have touched  ) stuff like warrants and preference shares ( with attached options ) when a standard share placement would probably fall short ( he didn't buy the whole company but enough to put a director on the board  to make sure issues were resolved  .. a  bit like Australia's Millners )



The cash injections were good, but they weren’t until 2008, he had been kicking goals for 48 years before that, as I was saying it’s easy for people to point to things like that and say that’s why he is successful but that’s far from what made him, he was a big deal before that.

But investing such a large sum into the banks when the rest of the world is fleeing the market in droves certainly shows his ability to go with the long term fundamentals rather than the fear and greed emotions of the market.


----------



## Value Collector (19 May 2022)

This is a great documentary on Warrens life and investment style.

(They make one mistake though $1000 invested into buffets fund would be worth $50 Million not $5M like they said)


----------



## Captain_Chaza (19 May 2022)

Great Doco and many thanks

Is he a FA'er  Or a TA'er?

You must always remember that this doco is 8 years old
Crikey! 
That could be 1 or 2 Booms and Busts ago

That's what you get  if you waste time reading Sweet FA Yahoos and  Sweet FA Twits
IMHO  Tread Carefully is my advice with these modern intelligentsia

Don't get me wrong 
I publish the chart of Berkshire  Hathaway with great respect
and ask
Is he an FA'er or a TA'er?

And I Ask Sea-Cadet gg does this remind you of AMP?


----------



## divs4ever (19 May 2022)

Captain_Chaza said:


> Great Doco and many thanks
> 
> Is he a FA'er  Or a TA'er?
> 
> ...



 i would  say Warren tilted to the fundamentals side  , although fundamentals as an investor would see them ( rather than say a trend or momentum trader )

 cheers


----------



## Captain_Chaza (19 May 2022)

i would  say Warren tilted to the fundamentals side  , although fundamentals as an investor would see them ( rather than say a trend or momentum trader )


divs4ever said:


> cheers



Please Note
He had no staff!

Go Figure!


----------



## divs4ever (19 May 2022)

Value Collector said:


> The cash injections were good, but they weren’t until 2008, he had been kicking goals for 48 years before that, as I was saying it’s easy for people to point to things like that and say that’s why he is successful but that’s far from what made him, he was a big deal before that.
> 
> But investing such a large sum into the banks when the rest of the world is fleeing the market in droves certainly shows his ability to go with the long term fundamentals rather than the fear and greed emotions of the market.



 from memory  apart  from the high profile stocks ( like Coca-Cola ) Warren invested a lot in railways  , and that is an interesting investment theme if you start at the right time in the cycle  , they make nice core-holdings and probably a sensible counterbalance to the insurance company investments 

 i WAS using power companies like that until they were taken over recently  ( i just can't find a good price on AZJ  , so they are unlikely to be a substitute )

 the hard part on being a new(ish )  investor and looking back at early Warren  is visualizing the companies he invested in ( WHEN he invested in them )  take a company like GE  it is massively different to the 1970 GE


----------



## divs4ever (19 May 2022)

Captain_Chaza said:


> i would  say Warren tilted to the fundamentals side  , although fundamentals as an investor would see them ( rather than say a trend or momentum trader )
> 
> Please Note
> He had no staff!
> ...



 neither do i unless i start paying some members here 

 BUT the newspapers might have been more accurate with their reporting  and THAT would have been a big help 

 and cynic might argue  that Warren's staff ( he has now ) are detracting from his current performance  , a good computer software program  can do the basic screening now days  , but i suspect general market over-valuations are actually the real reason Warren is less eager to buy in the current climate ( and that would impact of gains )


----------



## Captain_Chaza (19 May 2022)

WARREN just sold WFC and Bought C

What sort of tack is that?







That's like selling NAB and Buying ANZ

What sort of tack is that?


----------



## divs4ever (19 May 2022)

am not overly familiar with US banks  ,  but i would guess  Citi has promised to clean up it's act OR taken a better growth path than Wells Fargo  had  the switch been a year earlier  , i would have said corporate governance was a factor 

 ( i assume the change  was shares into cash , into shares and not some special placement , because Warren should still have around $US 50 billion in cash reserves  , so wouldn't NEED to sell Wells Fargo )

 PS i assume the US government would ( discretely ) bail out either if need be . ( if NOT that would be a BIG factor )


----------



## Captain_Chaza (19 May 2022)

divs4ever said:


> am not overly familiar with US banks  ,  but i would guess  Citi has promised to clean up it's act OR taken a better growth path than Wells Fargo  had  the switch been a year earlier  , i would have said corporate governance was a factor
> 
> ( i assume the change  was shares into cash , into shares and not some special placement , because Warren should still have around $US 50 billion in cash reserves  , so wouldn't NEED to sell Wells Fargo )
> 
> PS i assume the US government would ( discretely ) bail out either if need be . ( if NOT that would be a BIG factor )



Plearse Keep Talking
I can't work out if you are a Yahoo or a Twit


----------



## divs4ever (19 May 2022)

am unfamiliar with either term , in regard to share trading 

 so far i am just an investor learning as i go ( in uncharted waters )


----------



## systematic (19 May 2022)

Captain_Chaza said:


> Great Doco and many thanks
> 
> Is he a FA'er  Or a TA'er?
> 
> ...





Captain_Chaza said:


> Don't get me wrong
> I publish the chart of Berkshire  Hathaway with great respect
> and ask
> Is he an FA'er or a TA'er?




Yet again, it depends on your definition of the terms. I’ve come to accept that most don’t share mine.
Given that he has spent a lot of his life sitting in his office, reading financial statements, I think you would call him an FA’er, by your definition. 

Added to that, given that his stock picking doesn’t load on momentum at all (meaning that recent price direction doesn’t seem to factor in) I think you’d definitely call him an FA’er.


----------



## Value Collector (19 May 2022)

Captain_Chaza said:


> Great Doco and many thanks
> 
> Is he a FA'er  Or a TA'er?
> 
> ...



The video is actually a bit over 10 years old, but Warren is 62 years into his career, and has been through many booms and busts,  and the video is largely about his style of thinking.

Warren is definitely a fundamental investor.

The companies that Berkshire Buys 100% of it plans to never sell, it literally plans to hold every company it buys 100% of forever until that company eventually dies and is sold off for parts, So market ups and downs and technical analysis isn’t relevant to these holdings, the same is true for some of their large share holdings that they consider semi permanent.


----------



## Captain_Chaza (19 May 2022)

systematic said:


> Yet again, it depends on your definition of the terms. I’ve come to accept that most don’t share mine.
> Given that he has spent a lot of his life sitting in his office, reading financial statements, I think you would call him an FA’er, by your definition.
> 
> Added to that, given that his stock picking doesn’t load on momentum at all (meaning that recent price direction doesn’t seem to factor in) I think you’d definitely call him an FA’er.



The First and Only Broker I worked  for came into the office at 8.30am  Read 3 pages of the Financial Pages of the AGE and Then told us to ring our clients to sell XYZ and Buy ABC
Would you call that FA ?


----------



## Value Collector (19 May 2022)

divs4ever said:


> from memory  apart  from the high profile stocks ( like Coca-Cola ) Warren invested a lot in railways  , and that is an interesting investment theme if you start at the right time in the cycle  , they make nice core-holdings and probably a sensible counterbalance to the insurance company investments
> 
> i WAS using power companies like that until they were taken over recently  ( i just can't find a good price on AZJ  , so they are unlikely to be a substitute )
> 
> the hard part on being a new(ish )  investor and looking back at early Warren  is visualizing the companies he invested in ( WHEN he invested in them )  take a company like GE  it is massively different to the 1970 GE



Warren invests a lot in power companies too, look up their “Berkshire Hathaway Energy”

When you look at Berkshire Hathaway it’s made up of a few parts, or as warrens describes it “groves”

1, Is the group of 100% owned companies which there is over 50.

2, Is the insurance companies

3, is the two large infrastructure businesses eg Berkshire Hathaway energy business and BNSF Railroad.

4, the portfolio of partly owned companies eg shares

5, A massive pile of cash.

their strategy is fairly simple, they use their Insurance businesses to enlarge their cash pile which is currently over $100 Billion, and then they constantly try to use as much of this cash as they can  to buy 100% of companies they wish to permanently hold, when they can’t buy 100% they will buy shares, and when they can’t find enough of these companies to soak up this cash pile they will look for rational investments to make in their infrastructure businesses, and if they can’t find rational investments in these 3 ways they will just stack up the cash waiting, hence the $100 Billion they are sitting on.


----------



## Value Collector (19 May 2022)

systematic said:


> Yet again, it depends on your definition of the terms. I’ve come to accept that most don’t share mine.
> Given that he has spent a lot of his life sitting in his office, reading financial statements, I think you would call him an FA’er, by your definition.
> 
> Added to that, given that his stock picking doesn’t load on momentum at all (meaning that recent price direction doesn’t seem to factor in) I think you’d definitely call him an FA’er.



Also, Warren doesn’t even have a computer in his office, he doesn’t even have a calculator in there, and has said he doesn’t look at charts because he doesn’t want the chart to influence his valuation of the stock.

He has actually said that when he is valuing a business he doesn’t even want to know what the share price is until after he has done his valuation.


----------



## Value Collector (19 May 2022)

Captain_Chaza said:


> The First and Only Broker I worked  for came into the office at 8.30am  Read 3 pages of the Financial Pages of the AGE and Then told us to ring our clients to sell XYZ and Buy ABC
> Would you call that FA ?



No, that’s probably not FA

I would call that “Trading the news”


----------



## systematic (20 May 2022)

Captain_Chaza said:


> The First and Only Broker I worked  for came into the office at 8.30am  Read 3 pages of the Financial Pages of the AGE and Then told us to ring our clients to sell XYZ and Buy ABC
> Would you call that FA ?




I’d call that sales prepping 😂

Unless he was studying the numbers and not the stories? Maybe he was just a brilliant quant!


----------



## divs4ever (20 May 2022)

Captain_Chaza said:


> The First and Only Broker I worked  for came into the office at 8.30am  Read 3 pages of the Financial Pages of the AGE and Then told us to ring our clients to sell XYZ and Buy ABC
> Would you call that FA ?



 not unless he had a 'photographic memory '  and already had memorized all the important stats of the companies concerned  ( or had spent the early  morning reading and reading various yearlies/quarterlies etc ) and only used the newspaper  for current trends and sentiment  ( he may have already slimmed the moves to say six candidates before arriving at the office )

 but then the only broker i knew was an odd old guy who didn't give a toss what YOU ( or i )  thought about HIS personal investing decisions   but then he was a ( live)stock broker with a keen eye for a block of land and decent beast 

 ( the family and neighbours  ribbed him for over a decade about his retirement shack  , and he is still probably laughing at all them 70 years later )


----------



## systematic (20 May 2022)

Value Collector said:


> Also, Warren doesn’t even have a computer in his office, he doesn’t even have a calculator in there, and has said he doesn’t look at charts because he doesn’t want the chart to influence his valuation of the stock.
> 
> He has actually said that when he is valuing a business he doesn’t even want to know what the share price is until after he has done his valuation.



Yeah, didn’t he say something about valuing a company on the back of an envelope, so to speak? 

I was initially surprised...I thought he’d tend toward recently beaten down prices, given he is valuing companies (i.e. a ‘negative loading’ on trend/momentum)...but nope, nothing there. What the price has been doing (at least in recent times) - up or down - doesn’t factor in.


----------



## divs4ever (20 May 2022)

Value Collector said:


> Also, Warren doesn’t even have a computer in his office, he doesn’t even have a calculator in there, and has said he doesn’t look at charts because he doesn’t want the chart to influence his valuation of the stock.
> 
> He has actually said that when he is valuing a business he doesn’t even want to know what the share price is until after he has done his valuation.



 i differ from Warren  there  i ALWAYS double ( or triple ) check my numbers on a calculator  , the calculator might be 60 ( odd ) years old  , but can handle all the decimal places i need  , the computer has it's uses but i can ( and have ) decided  on moves without it 

 i spot an interesting share price in a company i have basic understanding of and THEN do deeper research  ( say the initial buy of FMG ) , 

charts ?? sometimes yes sometimes no  that great depends on the time before making a buying/selling decision ( sometime i have days , sometimes minutes )


----------



## Value Collector (20 May 2022)

systematic said:


> Yeah, didn’t he say something about valuing a company on the back of an envelope, so to speak?
> 
> I was initially surprised...I thought he’d tend toward recently beaten down prices, given he is valuing companies (i.e. a ‘negative loading’ on trend/momentum)...but nope, nothing there. What the price has been doing (at least in recent times) - up or down - doesn’t factor in.



I think he would be constantly valuing businesses, and figuring out what price he is willing to pay, and if the market price is more than that then he would just sit his notes aside and wait for the price to drop.

So he might load up on a stock that has dropped in price, but only because he had valued it earlier and had been watching it for a long time, not because he just got excited seeing a drop.


----------



## Captain_Chaza (20 May 2022)

Keep your eyes on the little Aussie Battler tonite

We will all be a lot richer in the Morning


----------



## Value Collector (20 May 2022)

divs4ever said:


> i differ from Warren  there  i ALWAYS double ( or triple ) check my numbers on a calculator  , the calculator might be 60 ( odd ) years old  , but can handle all the decimal places i need  , the computer has it's uses but i can ( and have ) decided  on moves without it
> 
> i spot an interesting share price in a company i have basic understanding of and THEN do deeper research  ( say the initial buy of FMG ) ,
> 
> charts ?? sometimes yes sometimes no  that great depends on the time before making a buying/selling decision ( sometime i have days , sometimes minutes )



I agree, I can’t live without a calculator either.

But I have heard Warren say that if something needs to be worked out to decimal places, then there isn’t enough margin of safety for him, so I guess he is looking for deals where the bargain is leaping off the page.

He did also say though that some of his best investment have been where he was just so confident in the product and the “durable competitive advantages” that he could see, that it was just obvious to him that sales would continue to grow at rates that made the current numbers look cheap.


----------



## divs4ever (20 May 2022)

Value Collector said:


> I agree, I can’t live without a calculator either.
> 
> But I have heard Warren say that if something needs to be worked out to decimal places, then there isn’t enough margin of safety for him, so I guess he is looking for deals where the bargain is leaping off the page.
> 
> He did also say though that some of his best investment have been where he was just so confident in the product and the “durable competitive advantages” that he could see, that it was just obvious to him that sales would continue to grow at rates that made the current numbers look cheap.



 i wasn't hiding behind the shed when they were handing out greed  ( have one heck of a time trying to control it )

 but sometimes i NEED to see those decimal places as well  ( that half a percent might be a deal breaker  for me ) especially yields on hybrids 

 sometimes 'competitive  advantage ' doesn't  work well for me ( say Newsat or Gunns ) maybe with another 10 years experience i will make more good choices 

 'leap off the page ' sure , but i want to double-check first  , sometimes deals ARE to good to be true


----------



## Value Collector (20 May 2022)

divs4ever said:


> i wasn't hiding behind the shed when they were handing out greed  ( have one heck of a time trying to control it )
> 
> but sometimes i NEED to see those decimal places as well  ( that half a percent might be a deal breaker  for me ) especially yields on hybrids
> 
> ...



What I mean by a deal that leaps of the page is, if you know for example that your cost of capital is 4.5%, and see a share worth $72 paying $3.50 dividend you will probably need a calculator to know that that’s a 4.85% return and so is technically 0.35% above your cost of capital.

But, Buffett doesn’t want a deal with such a small margin of safety, he wants one that doesn’t require a calculator, eg if that $72 stock paid $9 dividend he would quickly be able to work out in his head that $7.2 is 10% of $72, and the $9 divvy is much higher than the 4.5% cost of capital, so it’s “leaping of the page” so to speak.

Obviously there is more to it that just dividend yield, but what I am saying is that he wants numbers that are obviously good, not just so small that you need a calculator to figure out they are positive or not.

Especially because at the end of the day valuations are estimates, you might be wrong by 30% and if you are relying on 0.35% profit margin, and are 30% wrong, it will end badly, but if the profit margin is well over 10%, say 12% of so that you can work out in your head you will still be fine.


----------



## divs4ever (20 May 2022)

Value Collector said:


> What I mean by a deal that leaps of the page is, if you know for example that your cost of capital is 4.5%, and see a share worth $72 paying $3.50 dividend you will probably need a calculator to know that that’s a 4.85% return and so is technically 0.35% above your cost of capital.
> 
> But, Buffett doesn’t want a deal with such a small margin of safety, he wants one that doesn’t require a calculator, eg if that $72 stock paid $9 dividend he would quickly be able to work out in his head that $7.2 is 10% of $72, and the $9 divvy is much higher than the 4.5% cost of capital, so it’s “leaping of the page” so to speak.
> 
> ...



 but i am dyslexic ( among other quirks ) , double checking  works for me in money matters  , instinctive reactions worked for me on the cricket field 

 at that div. yield  is usually the number that STARTS the deeper research and CALCULATE a maximum target price after checking some other metrics ( and recent news )


----------



## divs4ever (20 May 2022)

it looks complicated  but avoids  a yield trap


----------



## Mohammed Hazabig'un (20 May 2022)

Value Collector said:


> and has said he doesn’t look at charts because he doesn’t want the chart to influence his valuation of the stock.



That is GOLD.

Chartists don't like looking at Fundamentals and Fundamentalists (like Buffett) don't like looking at Technicals.

Buffett's Mother was a Teachers wasn't she, his Father a Stockbroker. He had the two essentials things for great success in place - Nature and Nurture.


----------



## Captain_Chaza (20 May 2022)

Sailing for GOLD is one of the greatest challengers any Sailor will have
Especially when Sailing  Against the Worlds Best

They set  sail  from the Great Lakes out of  Chicago  "The CBOE"
and  it is always a good idea to see what they are up to

I would put this chart on the GOLD thread but it would probably inspire the Yahoos and Twits
To go off topic with their multitudes of One Liners and fill our Mail boxes with Nuisance

For those only  in the Business of Sailing for GOLD  In a TA perspective

*Sailing for  GOLD  One Day at a Time


*

From Memory  The Oracle Of Omaha Bought lots of GOLD @ $2000  ~ a  1-2  years ago  preaching  $5000?
Does anyone know if  He is still holding?

As you can all see
There are lots of COLD FRONTS ahead to sail  through to get back to $2000
For his sake I hope it happens in his Lifetime
We all KNOW
INFLATION will do What INFLATION does  and yes he will be right
But will it be quick enough for the Legendary Oracle?


----------



## divs4ever (20 May 2022)

Captain_Chaza said:


> From Memory The Oracle Of Omaha Bought lots of GOLD @ $2000 ~ a 1-2 years ago preaching $5000?
> Does anyone know if He is still holding?



 i haven't seen any recent mention of Warren holding gold or selling gold , i did see mentions of increased holdings in selected shares 

 but i also find it surprising that he disclosed he was buying gold ( or silver ) because i would assume he would be buying physical


----------

