Market perception... not fundamentals
- Thread starter ceasar73
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That's really sparse of detail Ceasar. Which stock? What ARE the fundamentals? What is the perception of the market regarding the fundamental characteristics of the company? Your question in it's current format is.. um kinda meaningless.
Give us an example
Cheers
Sir O
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If fundamentals set the share price for shares,i wouldnt be a technical trader! 
But what influences that perception? Fundamentals are certainly part of it.
Knobby22
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Price is driven mainly by fundamentals.
The actual price varies from the true price by what could be called an elastic band depending on market sentiment.
The main reason the price has dropped is that world trade fundamentals have changed unexpectedly. No one could possibly deny this.
Technical traders are delusional if they think that it is them that makes the market move.
They are really swing traders catching the ride as fundamental perception changes. They do not move the market. It is a good way to operate and make money though.
The actual price varies from the true price by what could be called an elastic band depending on market sentiment.
The main reason the price has dropped is that world trade fundamentals have changed unexpectedly. No one could possibly deny this.
Technical traders are delusional if they think that it is them that makes the market move.
They are really swing traders catching the ride as fundamental perception changes. They do not move the market. It is a good way to operate and make money though.
CanOz
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What a load of Rot!
Price is driven by emotion, nothing more to be said on the subject.
CanOZ
Knobby22
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What a load of Rot!
Price is driven by emotion, nothing more to be said on the subject.
CanOZ
What crap.
Babcock and Brown went broke on sentiment.
The US and GBR banks went down in price because of sentiment. Dream on!
CSL has gone up 20 fold because of sentiment. Nothing whatever to do with increasing eps by 20 times.
CanOz
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Knobby22
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No, mainly fundamentals. Sentiment plays a small part only.
Cheap money provided by government to encorage house buying.
Mismangement of banks and executive greed for short term goals.
Lax money supply. Corruption. Too much debt.
Fundamentals!!
I'd say they all play a part, influence each other and tend to be significant in different timeframes. Current crisis: fundamentals and (greedy) sentiment lead to the crash, crash creates negative sentiment, crash affects fundamentals, sentiment affects technicals etc.
Multiple factors, all should be considered.
Multiple factors, all should be considered.
CanOz
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Greed, fear, its all in the emotions.
Fundamentals might account for the reason that supply is cornered etc., but emotion drives the price to unsustainable levels.
CanOz
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LOL. LOL.
Ok im going to try break this down nice and small.
No it isn't! How does that even work are you kidding? So you are telling me the balance sheet of most companies on the asx has halved since last year!?! You have to be kidding me!
And how does one determine the "true" price. I wish i knew! I'd be rich!!
Change the word "fundamentals" to "perception"
Take a took at TAP oil on the asx and tell me that the breakthough of 90cents on the triangle there is from fundamentals. Technical traders do not move the whole market though. We play on the probability of an event occuring. Fundamentals do not move the market either!
Thanks for the discussion
Brad
so whats driven stock prices down?
-fundamentals,
what has driven stocks down to the extent were they are undervalued?
-sentiment,
fundamentals point them down, sentiment drags them down.
-think about the BOOM/BUST cycle.
but like Mr J said, totally depends on the timeframe you are trading
-fundamentals,
what has driven stocks down to the extent were they are undervalued?
-sentiment,
fundamentals point them down, sentiment drags them down.
-think about the BOOM/BUST cycle.
but like Mr J said, totally depends on the timeframe you are trading
CanOz
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Yep I agree Mr J.
sentiment mainly short term, fundamentals long term.
Exactly, isn't that the beauty of the markets, there is something for every analyst.
Take oil for example, there are long term fundamentals that will provide a fair price for oil, but it was greed, fear, and the US dollar that pushed the price up. Global economic growth slowed demand for oil and the US Dollar brought the price down and emotions certainly played a part in that dramatic fall.
CanOz
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So apart from those companies who have a faulty model (Mr T would say BNB!) fundamentals moves the price to a general area and perception moves it about from there?
When anxiety > perception of fundamentals, anything happens.
I bought some earlier on "good fundamentals" - they went down.
AS someone once said, "perception is reality". Can't recall who.
When anxiety > perception of fundamentals, anything happens.
I bought some earlier on "good fundamentals" - they went down.
AS someone once said, "perception is reality". Can't recall who.
I dont follow Ben Graham,
but i believe this is one of his quotes/sayings;
- In the short run the market is a voting machine, but in the long run it is a weighing machine -
so i guess on that quote
- perception of fundamentals = short term price movement
- realisation of fundamentals = long term price movement
but i believe this is one of his quotes/sayings;
- In the short run the market is a voting machine, but in the long run it is a weighing machine -
so i guess on that quote
- perception of fundamentals = short term price movement
- realisation of fundamentals = long term price movement
Someone also said something like (Wyckoff I think) 'The market is made from the mind of many...'
and the great Isaac Newton had a crack at it also...
'And back in the spring of 1720, Sir Isaac Newton owned shares in
the South Sea Company, the hottest stock in England. Sensing that
the market was getting out of hand, the great physicist muttered that
he “could calculate the motions of the heavenly bodies, but not the
madness of the people.”
and the great Isaac Newton had a crack at it also...
'And back in the spring of 1720, Sir Isaac Newton owned shares in
the South Sea Company, the hottest stock in England. Sensing that
the market was getting out of hand, the great physicist muttered that
he “could calculate the motions of the heavenly bodies, but not the
madness of the people.”
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But technicals is trading the motions of others, mapping their actions...
And those that do make the market move do look at technicals and use it to their advantage (not necessarily to the advantage of trad t/a analysts)
