Which one do you use? Technical or fundamental analysis?

[Realist]

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

I realise I am never going to win an argument with you Realist : but you're looking at things selectively. If you want to try and pick bottoms in falling stocks as a profession then good luck - the point about CMI and PBB is that purely in PER terms they have looked cheap all the way down over the last year or so. I'm not talking the last few weeks - everything has bounced the last few weeks.

Everything has bounced 30% recently?

It paid out a half yearly 12% dividend in May as well.

PRG looks a decent company to me and is certainly not on the nose in sentiment terms so I wouldn't try and convince you not to buy it. It's not enough of a stand out for me though. I think overall you're a bit too focussed on ratios without looking at the growth potential though.

I agree totally. I am not interested in predicting growth potential - I purely look at the past. I don't try and predict the future.

Is that wrong? should I be trying to predict the future?

 

[It's Snake Pliskin]

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

Is that wrong? should I be trying to predict the future?

You should have some interest in what the future may bring you. Call it prediction, projection, gambling, goal fullfillment, profit capturing.etc.

 

[eddievanhalen]

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

Numerous stocks have bounced >30% and not necessarily because they're any good. In many cases it's because they're junk and got hammered harder than most during the correction. I wouldn't get too focussed on your 30%.

And yes.............all my best investments have involved reading between the lines in company announcements and getting a feel for the growth potential in the near term. There's a big difference between buying cheap and buying cheap growth.

Anyway - I'm outta here for a while again LOL

Ed

 

[Realist]

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

Realist,
So you are fundamental and believe investing is long term but seem to be influenced by the short term moves that theoretically you cannot realise until after 1 year to receive a tax benefit for the hassle of buying into the company.

Sorry I just don`t understand your logic.

My question for you:
If the stock dictates how long you hold for, and that may be less than 1 year so no tax benefit; how do you know it is time to get out?

Snake, I was just pointing out to Ed that the 'dog' he picked has paid out half a 12% dividend and risen 30% recently.

Snake, that is the same question I asked before about this theory you can do both TA and FA at once - when you are doing both FA and TA investing at once when do you sell?? what about stop losses? what about tax and compounding - you can;t ahev it all - when do you sell?


My answer in FA investing is hold for as long as possible, the main reasons to hold are compounding, dividends and tax.

You may want to sell if the companies fundamentals change (ie profits go down), if it becomes overvalued. If you need the money (family, house, lose job etc.) or if you have tax advantages in doing so ie. lost somewhere else so you pay no tax, or moved overseas where you can avoid it.

 

[Realist]

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

Numerous stocks have bounced >30% and not necessarily because they're any good. In many cases it's because they're junk and got hammered harder than most during the correction. I wouldn't get too focussed on your 30%.

And yes.............all my best investments have involved reading between the lines in company announcements and getting a feel for the growth potential in the near term. There's a big difference between buying cheap and buying cheap growth.

Anyway - I'm outta here for a while again LOL

Ed

Fair enough. We'll see how you go in a bear market or a crash sooner or later.

 

[eddievanhalen]

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

Just for clarity's sake CMI has paid a 10-12c dividend every year for the last five years , has been on PER's between 8-10 for the last 3 years and even after your 30% bounce is 43% lower than it was 2 years ago when the stock was also nice and cheap. So much for ratios telling the story without some form of qualification. Eventually , given a positive outlook, it may well be genuinely cheap. The way it has progressed in recent years does illustrate my point clearly whether you like it or not.

As far as corrections go I will be more than happy to compare figures with you during the next correction and see how our respective approaches stack up.

Ciao

Ed

 

[It's Snake Pliskin]

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

Snake, that is the same question I asked before about this theory you can do both TA and FA at once - when you are doing both FA and TA investing at once when do you sell?? what about stop losses? what about tax and compounding - you can;t ahev it all - when do you sell?

Realist,

One`s exit strategy will determine when to sell.

I can`t answer your question because I am not a TA/FA guy. Maybe Swingstar can answer it, or Mostafa.

 

[Realist]

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

You should have some interest in what the future may bring you. Call it prediction, projection, gambling, goal fullfillment, profit capturing.etc.

The efficient market theory dictates companies with a poor outlook are priced cheaply.

The fact I try and buy cheap companies mean I focus on buying companies with a poor outlook.

I do not go looking for companies with great outlooks, if anything I go looking for companies with poor outlooks.

I know all too well analysts are wrong as often as they are right.

I own about 6 stocks that one analyst or another has recently said would be their worst buy of the year.

You'll find some analysts worst buys outdo their best buys.

 

[eddievanhalen]

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

I keep coming back but FFS - now you're quoting efficient market theory which Buffett believes is a load of rot and which effectively means that your "poor outlook" companies are fairly valued because the market is efficient. And.........that you and everyone else is wasting their time trying to outperform benchmark indices.

WTF

This is clearly a waste of time

Ed

 

[Realist]

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

I keep coming back but FFS - now you're quoting efficient market theory which Buffett believes is a load of rot and which effectively means that your "poor outlook" companies are fairly valued because the market is efficient.
:

Graham agrees with efficient market theory.

But you miss the point. The poor outlook companies are sold currently at a discount. Obviously because analysts predict future earnings will not be as good. Why buy them when you can buy a company with amazing prospects?

My point is analysts are often wrong. Or right in the short term, but long term things change.

If you are planning to buy a share for 10 years it is largely irrelevant what analysts short term predictions for the stock are.

 

[eddievanhalen]

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

Tell all that to the people who bought seemingly cheap companies like HIH and ION with a 10 year outlook.

What you say makes not one iota of sense as far as I'm concerned.

I really think the next bear market and/or recession will be good for you (sincerely) because that's the only way you're going to feel enough pain to learn some lessons. If you can then maintain your current stance after watching the value of your portfolio halve and see a few of your "cheap" companies go under then I really don't know.........I understand you're a long term investor and all but we're here to see if we can do better than that aren't we??

I agree with you about the importance of corrections/bear markets. Period such as 2002 are the best time to really see if you have what it takes and get in there and develop your systems/philosophies. If you can come out the other end better off than you were before then you know you're on the right track.

Over and out........somebody else's turn :

 

[lesm]

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

Yes, it would be good if Joe or one of the moderators would step in here.

We are now seeing some serious allegations that could give rise to a potential breach of the regulations administered by ASIC.

Gentlemen and others, (as it applies), it might be a good time to get the egos under control, false accusations (in public) may also have repercussions for the accuser, as there is a requirement to produce facts and evidence.

This or any other forum is not necessarily the right place. There are proper avenues.

 

[Joe Blow]

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

Yes, it would be good if Joe or one of the moderators would step in here.

We are now seeing some serious allegations that could give rise to a potential breach of the regulations administered by ASIC.

Gentlemen and others, (as it applies), it might be a good time to get the egos under control, false accusations (in public) may also have repercussions for the accuser, as there is a requirement to produce facts and evidence.

This or any other forum is not necessarily the right place. There are proper avenues.

Agreed Les,

I do not want to see innuendo or unfounded allegations on ASF and as a result some posts in this thread have been removed. This thread is getting increasingly personal and if it continues on in this fashion I will be forced to suspend some accounts.

I urge everyone involved in this nonsense to grow up, leave the puerile playground stuff for other forums and stick to the issues. If you can't then perhaps you will be happier posting at another forum.

I will be watching this thread closely from here on in so please, as Les suggested, get the egos under control gentlemen and stop the personal attacks and innuendo.

 

[RodC]

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

Rod, please list 3 companies now which are good TA and FA purchases.

So I can learn from your expertise..


I'll give you one myself - PRG.... do you agree it is??

Thanks..

Realist,

I don't know what would be a good FA purchase as I don't use FA for stock selection. For my main portfolio I select stocks using a TA system then have a cursory glance at the fundamentals to make sure that the selection is something I'm comfortable with and is a reasonable "fit" with my existing holdings.

PRG looks reasonable both technically and fundamentally, but unless it got "triggered" I wouldn't even look further at it.

Rod.

 

[Realist]

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

Tell all that to the people who bought seemingly cheap companies like HIH and ION with a 10 year outlook.

Ahhh yes the oldest criticism traders have of buy and "hope" investors. Suggesting that we could have held and kept a large company that went under like HIH and lost "all" our money.

I'm sure some mums and dads did lose all their money on HIH. They aint Fundamental investors that diversify though - that is for sure.

I did not hold HIH or ION so they are irrelevant to me.

And even if I did they would be at most 5% of my portfolio (I diversify) - so no great loss in the whole scheme of things.

Neither did I hold ANZ or BHP or CBA years ago when they were 1/4 of what they are now (and they paid good dividends all those years) you probably made 6 times what you invested in 10 years just buying and holding them.

So your argument that I could have bought some duds is right. Just like you could buy some crappy exploration company that has a trading freeze before your stop loss is activated and it goes under overnight - it is not impossible, it could happen.

If you can then maintain your current stance after watching the value of your portfolio halve and see a few of your "cheap" companies go under then I really don't know

It is impossible that my porfolio halved. That is the beauty of it. You can not possibly suggest that Westfield, Fosters, BHP, CBA, IAG, Bluescope, DB Reef all could halve. That in all reality is not possible. They are not overvalued, if anything they are on average undervalued they all make good profits. They can go down - but to halve is just ridiculous.

 

[Realist]

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

For my main portfolio I select stocks using a TA system then have a cursory glance at the fundamentals to make sure that the selection is something I'm comfortable with and is a reasonable "fit" with my existing holdings.

That is pure trading to me. No investment part whatsoever.

A cursory glance, to see what? What have you seen that has ever stopped you buying?

What does a cursory glance at MTN's fundamentals tell you? or BMN's?

 

[RodC]

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

That is pure trading to me. No investment part whatsoever.

I never claimed it wasn't trading. But I'm not aware of any reason that says trading can't be part of an investment strategy.

A cursory glance, to see what? What have you seen that has ever stopped you buying?

I did say it was only cursory.

It's mainly to check out the dividend yield and history (dividends pay the interest on the margin loan). A glance at recent announcements to see if there's been any obvious reason for recent price movements. And also a check of which sector the company is in just so the portfolio doesn't bceome too overweight in one area.

What does a cursory glance at MTN's fundamentals tell you? or BMN's?

I trade on margin, neither of these 2 have made it past the fundamentalists who determine the accepted shares on the margin list so I'm not interested in them. They also don't pay dividends, so I'm doubly not interested.

Rod.

 

[Realist]

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

Rod, first you said this...

Rubbish, used properly TA and FA can complement each other, if you think they only contradict then you really have no idea.

Rod.

Then you say this..

I never claimed it wasn't trading.

I did say it was only cursory.

Lets make one thing clear - You do not combine both technical and fundamental analysis. You trade and take a cursory look at fundamentals.

Your trading sounds highly weird as well. Not that there is anything wrong with that.

What have you bought recently. And why?

 

[eddievanhalen]

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

Like I said Realist you've obviously never experienced real carnage on the markets. BSL dropped 40% in five months only recently and that wasn't even a bear market..........it was nice and cheap on PER right at the top too , BHP very nearly halved in 97-98. FGL lost a lot of ground 2001-2003 and is only now back around its 2001 peak.I could go on. If you're happy to experience paper losses like that and ride them out (or hold stocks that go nowhere for half a decade) then good for you. Personally I'd rather be cashed up to buy them when they actually are cheap and on the up. Add in a couple of CMI type "value" stocks from the last few years and you'll just have a ball when a fair dinkum bear market hits. NOT.

It's pretty clear you haven't been investing long enough to suffer some real damage. Your time will come (just like it has for all of us) and maybe then you'll start to look and see if there's a better way. Perhaps come back to this thread (forgetting me for a minute) and look at how some of the experienced traders/investor who do it for a living work.

We've done this to death , gone around in circles and ended up right back where we started. Given your strategy I'd recommend you invest in an index fund as I can't see you outperforming the index long term with your strategies. I sincerely wish you all the best but I really fear for your financial health.

I've officially 100% resigned from this thread until some sort of new tangent pops up. If I keep replying every time Realist says something illogical I'll be here fulltime

 

[RodC]

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

Lets make one thing clear - You do not combine both technical and fundamental analysis. You trade and take a cursory look at fundamentals.

Yep, that's what I said.

Your trading sounds highly weird as well. Not that there is anything wrong with that.

If having a system that works is weird, then I can live with that.

Rod.