Technical Analysis vs. Fundamental Analysis

[So_Cynical]

No worries, also I am not sure if I worked out the dividends properly however we may as well re-invest them in whatever we want.

OK so im happy to go with your dividends...mine added up to $1831 whole dollars, and my TSI money = $12706...sticking with the new entrant 10K theme ill plonk 10K into TOL -Toll Holdings @ $4.71 and put half the the rest into an average down in CPU @ 8.60 and the other half into APN @ $1.245...so.

• TOL $10000 = 2123 Shares @ 4.71
• CPU $2268 = 263 Shares @ 8.60
• APN $2268 = 1821 Shares @ 1.245

 

[LifeChoices]

Just interested if either of your views (Robusta and So_Cynical) has changed on the next 6 months ahead, and who is now losing the least based on the last ASX close?

 

[So_Cynical]

Just interested if either of your views (Robusta and So_Cynical) has changed on the next 6 months ahead, and who is now losing the least based on the last ASX close?

Robusta's 6 stock challenge portfolio down 10.25% My portfolio down 12.46%

Personally i feel the market will go sideways for the next 18 months with potential to go up and down within a 1000 point range 4000 > 5000, this has been my opinion for the last 20 months....i cant see any reason to change that.

I'm a panic buyer!

 

[robusta]

Robusta's 6 stock challenge portfolio down 10.25% My portfolio down 12.46%

Personally i feel the market will go sideways for the next 18 months with potential to go up and down within a 1000 point range 4000 > 5000, this has been my opinion for the last 20 months....i cant see any reason to change that.

I'm a panic buyer!

I am with you So_Cynical now is the time to panic buy not sell.

I however have no idea what the market will do.

 

[LifeChoices]

I think I'm going to enjoy earning 6% interest in the bank account waiting to pounce on new lows as you post your losses for the next few months on this thread.

If things start to go really pear shaped and there is a sign of a run on the banks, I'll scrape out what I can from my account and head over to Dan Murphy's and buy as much Johnny Walker Red Whiskey (I've never been a big fan of bourbon) and Winfield Red as money can buy.

My mother told me that towards the end of WWII in Hamburg when Hitler starting printing money, alcohol and cigarettes were the only items that had any real value.

 

[So_Cynical]

I think I'm going to enjoy earning 6% interest in the bank account waiting to pounce on new lows as you post your losses for the next few months on this thread.

How will you know when to pounce on the new lows?

Page 313 of the "XAO Technical Analysis" thread covers what some of the experts on this forum thought right at the bottom of the market in 2009

https://www.aussiestockforums.com/forums/showthread.php?t=4888&page=313

No one saw the bottom...however a few did see the recovery after it was a month or so old....will you be able to see it?

 

[quadfin]

chrislp mentioned this thread & with the reporting season starting up i will be back

Is it notr good to use both FA & TA, trading or ST or Lt

 

[chrislp]

chrislp mentioned this thread & with the reporting season starting up i will be back

Is it notr good to use both FA & TA, trading or ST or Lt

My opinion is that you need to find what suits you personally & stick to it.

Whether you use one method exclusively or a combination of both.

 

[Boggo]

I think I'm going to enjoy earning 6% interest in the bank account waiting to pounce on new lows as you post your losses for the next few months on this thread.

Often a bit like a dog chasing its tail, when he catches it what then ?

How will you know when to pounce on the new lows?

And more importantly, how do you recognise old highs, the exit is more important than the entry. See both the PEN and RED threads for examples of that.

chrislp mentioned this thread & with the reporting season starting up i will be back

Is it notr good to use both FA & TA, trading or ST or Lt

Whichever gives you the first heads up in either direction, see chart below.

My opinion is that you need to find what suits you personally & stick to it.

Whether you use one method exclusively or a combination of both.

Agree with a combination of both approach.
A recent example was FMS, it was a 14 cent stock that is in the ASX 300, there is usually a fundamental reason for it being in that group which is a heads up in itself. Looking at its price at the moment its obvious that someone else saw fundamental value in it too.

The we have QBE (monthly chart below), also in the ASX 300. Which came first, the chicken or the egg, the technical analysis or the fundamental analysis.
Does anyone else see where the warning signal was ?

I lean way more towards the technical analysis, it picked up something was happening with FMS a week before the price nearly doubled.
It is a much more reliable barometer, is a more reliable indication of overall market sentiment and is usually a heads up way ahead of the direction where the fundamentals are going to eventually take you as was the case of both FMS and QBE.

QBE is a perfect example of the errors associated with a dependency on the dividend being the life support in a decline.

There are numerous other examples that I could use.

Just my

(click to expand)

 

[tech/a]

My opinion is that you need to find what suits you personally & stick to it.

I often hear this on this topic.
I've been trying to list personalities to suitability of style.

To get my head around this accepted rhetoric.
My personal view is that the quote above is simply another one of those true-isms accepted by the masses without much thought.

Shwagger who seems to be attributed as the source of the quote while an accepted Author failed as a futures trader.

Im yet to find where one would say

Yep Ill trade Fundamentally because of x
or
Yep technically because of y

I think more to the truth of the matter is experience or lack of in each analysis style.
Anyone care to enlighten me?

I trade technically because the 10000 hrs of learning in MY VIEW gives me FAR FAR quicker and concise information.
It gives me a massive range of trading style types un available to the fundamental trader.
It also gives me something I can evaluate and test BEFORE I embark on investing---trading it.

My list of personality types is far longer and better served by Technical trading then that made up with Fundamental trading as its chosen analysis tool.---maybe your list is far different to mine?

Interested in responses.

 

[Julia]

You've omitted the large group who wouldn't even know what you meant if you asked if they invested/traded fundamentally or technically.

The people who read in the paper or some magazine that e.g. "QBE is a very well managed, very successful company and should be included in a core portfolio".

Or the ones who say "Woolworths must be a great investment because everyone has to eat".

"Gee whiz, look at the dividend yield on Telstra". How can you go wrong with that!"

Plenty more similar examples.

No thought re that company's position vis a vis its competitors.

No thought re that company's share price trend.

No calculation as to whether those supa dupa dividends compensate for the diminished capital as the SP falls.

Let alone debt levels, EPS, etc.

 

[tech/a]

You've omitted the large group who wouldn't even know what you meant if you asked if they invested/traded fundamentally or technically.

The people who read in the paper or some magazine that e.g. "QBE is a very well managed, very successful company and should be included in a core portfolio".

Or the ones who say "Woolworths must be a great investment because everyone has to eat".

"Gee whiz, look at the dividend yield on Telstra". How can you go wrong with that!"

Plenty more similar examples.

No thought re that company's position vis a vis its competitors.

No thought re that company's share price trend.

No calculation as to whether those supa dupa dividends compensate for the diminished capital as the SP falls.

Let alone debt levels, EPS, etc.

Julia Id place them in the Fundamental camp.
Not as a Fundamental Analyst but more on Fundamental background.
Same as a technical background for someone who sees or has pointed out a Trend
and buys based on that.
Its a technical background not analysis.

IMO

 

[odds-on]

Hi,

I am after a book recommendation. Is anybody able to recommend a techincal analysis book written by an author who has produced 20+% CAGR on total funds employed over 10 years? I would like to add a TA component to my stock picks.

Cheers

Oddson.

 

[notting]

I think more to the truth of the matter is experience or lack of in each analysis style.
Interested in responses.

A really great point.

It can be a mighty expensive learning curve for the bold!

Personally, I find fundamentals give me confidence to Hang on Harvey and buy hard in total panic. Suits my psychology. As does putting on massive shorts(I'm very skinny) to cover things at times when markets are gapping hard over nights.

However, it can be a long time between drinks which is far less entertaining!

However, even then you could argue that even fundamental analysis is just fooling yourself, as it is really an intuitive trend following method.
With no fundamentals backing it in reality!
Human natures as fundamental as it gets!

Your thinking 'gee wiz, these great banks usually trade at this multiple with that much dividend, they are absolute screamers! - That's simply anticipating previous tends to continue. There's nothing fundamental about it.
In the end, I suppose, it's beating rent and property appreciation less expenses, and the best I can do with a bank deposit.
This bank used to grow faster than both all things included.
It's big with government backing! Is bloody low relatively!
So I'll take the punt and hope that money isn't replaced with IToken.
Let's all go and short US bonds!

 

[Boggo]

The people who read in the paper or some magazine that e.g. "QBE is a very well managed, very successful company and should be included in a core portfolio".

Or the ones who say "Woolworths must be a great investment because everyone has to eat".

"Gee whiz, look at the dividend yield on Telstra". How can you go wrong with that!"

Plenty more similar examples.

Agree Julia.

If you guys wan a laugh then have a look at the "experts" tips in the finance section of The Weekend Australian.

The only one of the experts that I would give any time to would be Elio from StockDoctor (lincoln Indicators), those guys have the runs on the board from the past, the rest are just going with the usual top 50.

People pay money to these people - amazing.

 

[tech/a]

Hi,

I am after a book recommendation. Is anybody able to recommend a techincal analysis book written by an author who has produced 20+% CAGR on total funds employed over 10 years? I would like to add a TA component to my stock picks.

Cheers

Oddson.

My system Tech trader turned $30,000 to $370,000 in 5 yrs and had an open peak value of $428,000 from 2002 to 2008.

I closed all positions in 2008.
It was traded live and is still on one of the forums pretty well complete.

Sorry I dont publish books.

Nick Radge who has been my mentor for 20 yrs does.
His latest is soon to be released.
In it Tech trader and many others will be discussed.

Unfortunately you wont be able to return 20% on capital over 10 yrs from reading a book.

I've had no luck with Flying although the Author has flown over 8000 hrs. and never crashed.

 

[odds-on]

My system Tech trader turned $30,000 to $370,000 in 5 yrs and had an open peak value of $428,000 from 2002 to 2008.

I closed all positions in 2008.
It was traded live and is still on one of the forums pretty well complete.

Sorry I dont publish books.

Nick Radge who has been my mentor for 20 yrs does.
His latest is soon to be released.
In it Tech trader and many others will be discussed.

Unfortunately you wont be able to return 20% on capital over 10 yrs from reading a book.

I've had no luck with Flying although the Author has flown over 8000 hrs. and never crashed.

View attachment 45795

No worries. I will keep searching, i have read a few fundamentals based books by fund managers who have outperformed the market for many years and was wondering if there was an equivalent tehnical analysis book. I have read a few trading books which i found interesting just want to read one on technical analysis by an author with a track record.

Cheers

Oddson.

 

[tech/a]

No worries. I will keep searching, i have read a few fundamentals based books by fund managers who have outperformed the market for many years and was wondering if there was an equivalent tehnical analysis book. I have read a few trading books which i found interesting just want to read one on technical analysis by an author with a track record.

Cheers

Oddson.

Who are the Fundamental Fund Managers with the track record?
Many successful Fund Managers have floors of quants crunching technical systems.

Have you considered that being able to recognize an opportunity that lasts only a Short period of Time may be more life changing than achieving 20 % return over a long period of time?

 

[Wysiwyg]

My system Tech trader turned $30,000 to $370,000 in 5 yrs and had an open peak value of $428,000 from 2002 to 2008.

That looks great but the fact leverage was used in a strong bull market adds further perspective.

We started with $30K on margin which gave us around 100K to trade.

 

[odds-on]

Who are the Fundamental Fund Managers with the track record?
Many successful Fund Managers have floors of quants crunching technical systems.

Have you considered that being able to recognize an opportunity that lasts only a Short period of Time may be more life changing than achieving 20 % return over a long period of time?

Joel Greenblatt - Gotham capital performance was impressive
Mohnish Pabrai
Peter Lynch

Do not worry I am not a "fundamentalist",each to their own as far as i am concerned, i just want to read a book by somebody who has consistently made a lot of money using TA.

Cheers

Oddson