Which one do you use? Technical or fundamental analysis?

[mit]

Re: Which one do you use? Technical or fundamental analysis

BSD,

I fell onto the Punting Ace forum a little while back. It was interesting a mirror of what goes on here. A POT of 4% is pretty good from what I was reading. I downloaded a heap of racing data and when I get a chance I am going to analyze it. Anything to smooth out the equity curve.

MIT

 

[tech/a]

Re: Which one do you use? Technical or fundamental analysis

Hmm say you have a $10,000 account your bet each week.
Over 52 weeks thats $520k.
4% of turnover for a year is $20,800 or over a 200% loss on initial capital.

Perspective---

 

[NettAssets]

Re: Which one do you use? Technical or fundamental analysis

Hmm say you have a $10,000 account your bet each week.
Over 52 weeks thats $520k.
4% of turnover for a year is $20,800 or over a 200% loss on initial capital.

Perspective---

Can you run that by me again
initial capital is 10000
turning it over every week
TO is 520K
4% profit on turnover for year is $20,800
108% gain on capital isn't it ?
John

 

[tech/a]

Re: Which one do you use? Technical or fundamental analysis

I stopped betting on horses after two years because my stats showed a loss in the vicinity of 6% of turnover.

Actually was taking the example from this quote. Didnt flick back to have a look but in a positive case yes your correct.

 

[mit]

Re: Which one do you use? Technical or fundamental analysis

Hmm say you have a $10,000 account your bet each week.
Over 52 weeks thats $520k.
4% of turnover for a year is $20,800 or over a 200% loss on initial capital.

Perspective---

It's 4% profit each time you turn over your capital. So if you have a $50,000 in capital you should make $2k every time you bet the $50,000. Turn it over 100 times you make $200k or 400% on you original money. Which means if you have a low POT you are glued to a computer betting on almost everything to get your turnover happening.

Now the question is why don't they just bet 5 times at $10k each to up the turnover rate, well they are caught in the same stats that traders are. Each bet has to be small enough so that a series of losses doesn't make too big a dent in your capital.

Another big problem is liquidity as some of the meets don't have a very big betting pool so if you bet too large you can distort the odds.

There also seems (like on share forums there is a lot of c**p going on so it is hard to know what's real) to be a TA - Fundamentals divide. Some people (the fundies) get a higher rate by studying the form of all the horses and bet accordingly. They bet less often but have a bigger POT.

Others (The T/A) might find a bunch of rules such as
- bet on the second favourite if the track is wet and his odds are greater than 6:1 (Totally made up of course).

MIT

 

[chennyleeeee]

Re: Which one do you use? Technical or fundamental analysis

A bit off track from the original thread. lol

CHEN

 

[bunyip]

Re: Which one do you use? Technical or fundamental analysis

Then again, some think it is claptrap and baseless assumptions - but some people didnt finish high school, let alone study statistics

If you're suggesting that people who didn't finish high school and didn't study statistics are in some way inferior to or less capable than those who did, then once again you're showing just how naive you are.

Some of our highest achievers are high school dropouts, but have gone on to build vast financial fortunes.

I have met in person a man who recently gave six million dollars to cancer research, and is one of Australias richest men with a net worth of 290 million dollars. He left school at the age of 14 and got a job in a sawmill.

Take off your blindfold, get in touch with reality.

 

[NettAssets]

Re: Which one do you use? Technical or fundamental analysis

well they are caught in the same stats that traders are. Each bet has to be small enough so that a series of losses doesn't make too big a dent in your capital.MIT

Actually its quite a bit worse than traders - the bookie doesn't let you jump off for half price at the last turn if you see the nag headed for heavy going.
John

 

[wayneL]

Re: Which one do you use? Technical or fundamental analysis

Actually its quite a bit worse than traders - the bookie doesn't let you jump off for half price at the last turn if you see the nag headed for heavy going.
John

Indeed!! LOL

 

[It's Snake Pliskin]

Re: Which one do you use? Technical or fundamental analysis

Getting back to the original question: I don`t use sentimental analysis

 

[cuttlefish]

Re: Which one do you use? Technical or fundamental analysis

having done a bit of a random walk through various small cap stocks being discussed under the 'asf stock talk' part of these forums I reckon there are plenty of people out there that could benefit from applying a bit of fundamental analysis.

Personally I'm amazed that people would even contemplate taking a long position in a stock without at least taking a cursory look at the fundamentals, and if taking a large long position then a detailed look at the fundamentals would certainly be warranted to my mind - unless that large long position is only a small part of one's total capital and an amount that someone would feel comfortable about losing altogether.

 

[cuttlefish]

Re: Which one do you use? Technical or fundamental analysis

and when I say a cursory look at fundamentals that doesn't just mean a subjective overview, it means looking at a stocks market cap, its current earnings, its current NTA and how much both of those would have to change to justify the current market cap or speculated future market caps, and then maybe trying to put some real metrics around the likelihood of those changes occurring.

 

[It's Snake Pliskin]

Re: Which one do you use? Technical or fundamental analysis

Hey Cuttlefish,

having done a bit of a random walk through various small cap stocks being discussed under the 'asf stock talk' part of these forums I reckon there are plenty of people out there that could benefit from applying a bit of fundamental analysis.

That may be true for some holding stocks fundamentally suspect.

Personally I'm amazed that people would even contemplate taking a long position in a stock without at least taking a cursory look at the fundamentals, and if taking a large long position then a detailed look at the fundamentals would certainly be warranted to my mind - unless that large long position is only a small part of one's total capital and and amount that someone would feel comfortable about losing altogether.

I guess it depends on the time frame one wants to hold for.
Re: Fundamental reports; I don`t care for inexactitude. :hammer:

Cheers

 

[cuttlefish]

Re: Which one do you use? Technical or fundamental analysis

I guess it depends on the time frame one wants to hold for.

Nobody (surely?) would day trade a stock that had a chance of getting delisted during that day due to solvency problems - so surely at least a cursory look at the fundamentals would be relevant. It only takes about 15 minutes to scan the last annual or half yearly report and last 6 months worth of announcements (for most stocks - large caps its a bit more) to get at least an idea of the fundamental situation.

 

[It's Snake Pliskin]

Re: Which one do you use? Technical or fundamental analysis

Nobody (surely?) would day trade a stock that had a chance of getting delisted during that day due to solvency problems

An extreme case, and yes no one in their right mind would.

A day trade of Macquarie bank or BHP would require fundamental analysis?

 

[cuttlefish]

Re: Which one do you use? Technical or fundamental analysis

An extreme case, and yes no one in their right mind would.

A day trade of Macquarie bank or BHP would require fundamental analysis?

Ok, so both of those stocks have such a high media and analyst profile that any financial cracks that could be picked up by a layman would probably have been dissected a thousand times over in the media as soon as they arose anyway.

But that aside - why not? If hypothetically BHP was trading on a PE ratio of 400 would that impact decisions about how to trade it? Surely you'd be looking for fairly significant trading returns in exchange for the risk of trading a stock so over valued?

 

[It's Snake Pliskin]

Re: Which one do you use? Technical or fundamental analysis

Ok, so both of those stocks have such a high media and analyst profile that any financial cracks that could be picked up by a layman would probably have been dissected a thousand times over in the media as soon as they arose anyway.

I`m not trying to play one upmanship, but the above refutes what you said in your first statment on the issue today.

But that aside - why not? If hypothetically BHP was trading on a PE ratio of 400 would that impact decisions about how to trade it? Surely you'd be looking for fairly significant trading returns in exchange for the risk of trading a stock so over valued?

Technical traders don`t look at the PE, so once again the holding time would be off concern. For fundies obviously it is unrealistic....

Maybe the feeling of self assurdness comes from the extra analysis; a discussion in itself and maybe a new thread.

 

[Bobby]

Re: Which one do you use? Technical or fundamental analysis

Ok, so both of those stocks have such a high media and analyst profile that any financial cracks that could be picked up by a layman would probably have been dissected a thousand times over in the media as soon as they arose anyway.

But that aside - why not? If hypothetically BHP was trading on a PE ratio of 400 would that impact decisions about how to trade it? Surely you'd be looking for fairly significant trading returns in exchange for the risk of trading a stock so over valued?

Cuttlefish with respect to your thoughts, can you tell us a stock that has traded T/A going up on chart, that got delisted ( broke ) ?

Bob.

 

[cuttlefish]

Re: Which one do you use? Technical or fundamental analysis

I`m not trying to play one upmanship, but the above refutes what you said in your first statment on the issue today.

I don't really see how? e.g. why did you raise those two particular stocks as examples? My impression was because you felt they are rock solid companies that can be safely traded without fundamental analysis. My response to that is the reason you believe they are rock solid is due to an implicit level of fundamental analysis thats out there in the public domain as a result of the high level of scrutiny they receive.

What I will concede is that I can understand that a trader trading to a system that defines entries and exits and is combining that with money management doesn't necessarily need to be looking at fundamentals when deciding to trade a stock.

As I've said in this and other threads - whether fundamental, or technical, or a combination of both; - the key is following a plan and having the discipline to stick to the plan.

I also still don't see why it has to be an either/or situation - I'm more than happy to concede that technical analysis can complement a fundamental investment strategy.

 

[It's Snake Pliskin]

Re: Which one do you use? Technical or fundamental analysis

I don't really see how? e.g. why did you raise those two particular stocks as examples? My impression was because you felt they are rock solid companies that can be safely traded without fundamental analysis. My response to that is the reason you believe they are rock solid is due to an implicit level of fundamental analysis thats out there in the public domain as a result of the high level of scrutiny they receive.

What I will concede is that I can understand that a trader trading to a system that defines entries and exits and is combining that with money management doesn't necessarily need to be looking at fundamentals when deciding to trade a stock.

As I've said in this and other threads - whether fundamental, or technical, or a combination of both; - the key is following a plan and having the discipline to stick to the plan.

I also still don't see why it has to be an either/or situation - I'm more than happy to concede that technical analysis can complement a fundamental investment strategy.

Cuttlefish,

It isn`t a big issue and I have posted before that they are both relevant. You have covered some important points above which I agree with.

My two examples are as you say implicitly known by anyone with interest in the market. My point being that not all people need to do fundamental analysis because of this. Sure those nasty illiquid stocks may need some further understanding, maybe in a hybrid strategy using both.

Anyway enjoy.
Snake