I have
End of conversation.
I often hear this on this topic.
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.
Anyone care to enlighten me?
[video=vimeo;19621172]http://vimeo.com/19621172[/video]
Really?
Your "mentor" is where I learnt my whole trading philosophy from.
Evidently it was on a personal level.
I haven't been able to find anything that verifies the information I received many years ago.
So I guess it should read ---- alegedly
Evidently it was on a personal level.
I haven't been able to find anything that verifies the information I received many years ago.
So I guess it should read ---- allegedly
Even the government goes for Technical Analysis.
They are obsessed with TA.
Being a fundamental investor I miss out on many opportunities to make money open to technical investors.
A quick glance at the ASX Top 20 reveals 11 companies that will for one reason or another probably never be considered as investment candidates. (AMP, BXP, FGL, MQG, NCM, ORG, RIO, SUN, TLS, WDC, WPL).
Over the entire ASX I estimate only about 10% of companies tick enough of my boxes for me to consider them. I am sure a lot of investors have made a lot of money out of the above stocks.
From a technical point of view this creates a huge opportunity cost. At any given time there must be numerous stocks in the middle of a huge up-trend or hitting key resistance points.... you fill in the blanks.
As I have previously explained the technique I follow consists of identifying exceptional businesses, buying them for less than they are worth and holding those businesses until either they become significantly over valued or cease to be exceptional businesses.
I thought it may be interesting to list 6 businesses that meet my criteria and I think should out perform the market in the long term.
Disclosure 4 of these stocks are also in Roger Montgomery's Valeline portfolio.
These businesses are all about or below current intrinsic values.
If I assume a equally weighted portfolio and track it against the ASX 200 it should be interesting to see the results over the medium to long term.
It would also be interesting to get any input from any other points of view to see any correlation between different investment techniques. Or if anyone wants to put up a alternative portfolio?
CBA $50.50
CSL $32.50
JBH $19.59
MCE $4.95
FGE $4.05
FRI $1.40
Portfolio total $112.99 ASX 200 4694.90 20/10/2010
Ok here is my 6 at today's close (i own stocks with *)
- BPT 0.615*
- CPU 9.71*
- TSI 0.665*
- PTM 4.75*
- CIF 1.15
- APN 1.95
Portfolio total $18.84 were gona include dividends in this?
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
A Technical Analyst and a Fundamental Analyst are chatting about the markets in the kitchen.
Accidentally one of them knocks a kitchen knife off the table, which lands right in the fundamental analyst’s foot!
The fundamental analyst yells at the technician, asking him why he didn’t catch the knife?
“You know Technicians don’t catch falling knives!” the technician responded.
He in turn asks the fundamental analyst why he didn’t move his foot out of the way?
The Fundamental analyst responds, “I didn’t think it could go that low”.
Bit of truth in the joke though.
All fundamental investors are tempted to catch falling knives, but it is very risky behaviour.
It pays to know a few basics that technical analysts use to reduce risk.
Fundamental investing works but it is hard. You are dealing with old information and can fall into traps set by a CEO wanting to make his bonus. The aim of the Fundamental investor is, like the technical guys, is to predict the future.
Bit of truth in the joke though.
All fundamental investors are tempted to catch falling knives, but it is very risky behaviour.
It pays to know a few basics that technical analysts use to reduce risk.
Fundamental investing works but it is hard. You are dealing with old information and can fall into traps set by a CEO wanting to make his bonus. The aim of the Fundamental investor is, like the technical guys, is to predict the future.
I disagree with the part I've bolded. To me, technical analysis means not making an attempt to predict the future, but placing oneself in a position to either benefit from a trend or be stopped out at a small loss should the trend falter. I think Tech was fond of saying the money was made from the math, not whether your predictions were right or wrong - and this sums up my understanding of technical analysis - hop on a trend and ride it, and get out fast if it fails. The profit comes (hopefully) from the amount made on winning trades outweighing the amount lost on the losers. Trying to predict what may happen in a year's time is hard enough these days, let alone trying to predict where the market/economy/world will look like 5 - 10 years from now.
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