Which one do you use? Technical or fundamental analysis?

[tech/a]

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

It is black and white - investors buy companies, traders buy stock prices.

If you buy a nice house, or investment property and it is revalued 6 months later for less than you bought it for would you sell it and buy a better performing house?

You have much to learn.

You are looking at your theories through a tunnel.
I bought and still hold on one thing PRICE I dont care if the company is undervalued,Overvalued,I only care whether the share price remains above its exit.Infact some holdings I have no idea what the company does.

House.
WOW if only. If I could liquidate a house as quickly and as cheaply as I can liquidate a stock ---YOU BET I WOULD!

 

[BSD]

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

On QBE - nice trade, great company.

Where is your "trailing stop"?

 

[Realist]

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

House.
WOW if only. If I could liquidate a house as quickly and as cheaply as I can liquidate a stock ---YOU BET I WOULD!

Well we are definately coming from completly different perspectives and will never agree or even meet halfway. You need investors in the market and I need traders. So it is a good thing.

I'm outta here off to the pub, have a great one guys. I'll continue this argument, I mean indepth discussion, later.

realist.

 

[wayneL]

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

You need investors in the market and I need traders. So it is a good thing.

Indeed! That's why I've never understood the disdain investors have for traders and visa versa.

 

[MichaelD]

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

What exactly does it prove though?

How about you show us one of your losing trades - what would that prove - nothing.

I beg to differ. This trade shows you exactly what technical trading is on about.

Technical traders let their winners run (eg QBE) and cut their losses. For every QBE there will be another trade which was closed at a SMALL loss whilst the VERY LARGE gain is left to run until it stops performing. If Tech/A posts a losing trade chart you will see this in action.

With long term trading systems, hold times for winners are usually 6 months or longer. Personally, I see it as fishing for the big catch. Throw the minnows back and keep the blue marlins.

Realist - what is your exit strategy? (or do you simply buy and hold?)

 

[Realist]

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

I'm still here, off in 5 minutes.

I respect traders and want to learn from them and even dabble myself with a small part of my capital. Trading is very interesting. And I can see how you can make quick profits.

I am an investor though, through and through, and PROUD OF IT!

 

[tech/a]

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

BSD

The method has only a 180day EMA of the low exit any close below.
Which as you can see aint that far away.

 

[Realist]

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

Realist - what is your exit strategy? (or do you simply buy and hold?)

Okay off in 2 minutes.. :

My exit strategy is to sell companies that become too overvalued. That is it!

( can see the traders laughing already.)

If a company's profit starts to go down, or god forbid they make a loss, I'd review them closely. But probably still hold.

I have not sold any shares ever though...

I have some Nasdaq listed shares which worry me.

But for instance I see no reason to ever sell Fosters. Unless it becomes too overvalued (unlikely) in which case I'd sell it and buy back if/when they become fair or undervalued again.

Bear in mind I only buy companies that I see as having an excellent longterm future. No specs whatsoever.

I could not watch the market for a year and be safe my companies arew performing adequately.

 

[tech/a]

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

Ive just had a look at outperformers in the ASX100

There are quite a few.
2 that I like chart wise are.
CML,BHP

CML has out performed consistently.
BHP over longer timeframes of late underperformance (last week compared to this week) However last 3 mths compared to the previous 3 mths has out performed.

You get the picture.

My exit strategy is to sell companies that become too overvalued. That is it!

Was QBE ever over valued over the last 3 yrs?

Is it now?

 

[Realist]

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

There are quite a few.
2 that I like chart wise are.
CML,BHP

I bought more BHP about 9 days ago!!

We agree! WooHoooOOOO!


Off now !

 

[Knobby22]

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

Good on you Realist.
I think the main difference between a trader and an investor is patience.
Trader's want the zing!

 

[tech/a]

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

I bought more BHP about 9 days ago!!

We agree! WooHoooOOOO!


Off now !

That makes it at $29
Hmm The techie $25.6


Who has better value?

 

[It's Snake Pliskin]

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

Tech or fundamental it doesn`t matter.

Some find a guru and read their books and then think it is the code for life itself.

 

[MichaelD]

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

Tech or fundamental it doesn`t matter.

Some find a guru and read their books and then think it is the code for life itself.

One of the most sensible things said in this thread.

 

[Julia]

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

Julia, by my definition and that of many investors you just described yourself as a trader.

It is black and white - investors buy companies, traders buy stock prices.

If you buy a nice house, or investment property and it is revalued 6 months later for less than you bought it for would you sell it and buy a better performing house?

Depends whether I am buying the house to live in myself or if it is an investment.

If I buy a house to live in, I am not in the least concerned with its subsequent market valuation.
This would only become of interest if I decided to sell it. I have bought the house for the pleasure of living in it, not as necessarily a means of making money.
If I buy an investment property, however, and it has appreciated in price over, say, a couple of years, but then market assessments indicate it has achieved its maximum likely capital gain in the foreseeable future, and I can see another property in an area which is beginning to show good appreciation, then, yes, I will sell my initial investment property and buy where I can expect further appreciation.

It's nothing more than maximising opportunities.

Julia

 

[Staybaker]

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

The true beauty of buy and hold is there are no, or virtually none, ongoing expenses whatsoever. That is the one true indisputable advantage of investing over trading.

I am going to dispute that statement, thus it is not "indisputable"

The lack of expenses associated with buy-and-hold investing is only an advantage over trading if it produces superior results.

Suppose investor "A" generates a long-term average annual return of 15% (i.e. greater than the general market return due to superior stock selection). This return is achieved after expenses, which are minimal.

Meanwhile, suppose trader "B" can generate a long-term average annual return of 25% before expenses, but expenses account for 5%, leaving him with a 20% return. He would still be doing better than "A" even after expenses are taken into account.

Now, it is clear from your many posts, Mr Realist, that you are tacitly assuming that the trader cannot outperform the investor - if you are correct, then clearly the trader is irrational if he continues to trade rather than invest. Traders, however, clearly believe they can outperform the buy-and-hold investor.

The real question, then, is whether traders can outperform investors over the long term. The "advantages" of investing that you continue to mention (low expenses, low tax, less time commitment, etc.) are really irrelevent without knowing the degree to which one group can outperform the other.

Furthermore, even if we can make a general statement about whether trading or investing gives a better result, it wouldn't necessarily translate to any individual's case. Maybe, in the aggregate, investors do outperform traders over the long term. (I'm willing to accept that that may be true.) But that doesn't mean that every investor outperforms every trader. (For example, it may be true that Americans, in general, are more overweight than Asians. But that doesn't mean that every American is heavier than every Asian. And you certainly couldn't conclude that every American should therefore be on a diet, while no Asian needs to watch their weight.) So even if investing outperforms trading in general (which is debatable), a talented trader would still be rational to stick to trading if he is sufficiently good at it. It really comes down to each individual finding out what works best for them, given their skills and experience and personality.

I know of traders who have made over 50% per annum consistently over the last four years (some nearer 100%), after expenses. You'd certainly be hard-pressed trying to convince them that they shouldn't be trading, because of the high expenses involved!

Cheers, Staybaker.

 

[Realist]

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

That makes it at $29
Hmm The techie $25.6


Who has better value?

Actually I bought more at 26.60 - even announced it on here at the time.


Did you buy any? No - tough luck...


I got the better value.

 

[wayneL]

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

:sleeping::sleeping::sleeping:

 

[nizar]

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

I am going to dispute that statement, thus it is not "indisputable"

The lack of expenses associated with buy-and-hold investing is only an advantage over trading if it produces superior results.

Suppose investor "A" generates a long-term average annual return of 15% (i.e. greater than the general market return due to superior stock selection). This return is achieved after expenses, which are minimal.

Meanwhile, suppose trader "B" can generate a long-term average annual return of 25% before expenses, but expenses account for 5%, leaving him with a 20% return. He would still be doing better than "A" even after expenses are taken into account.

Now, it is clear from your many posts, Mr Realist, that you are tacitly assuming that the trader cannot outperform the investor - if you are correct, then clearly the trader is irrational if he continues to trade rather than invest. Traders, however, clearly believe they can outperform the buy-and-hold investor.

The real question, then, is whether traders can outperform investors over the long term. The "advantages" of investing that you continue to mention (low expenses, low tax, less time commitment, etc.) are really irrelevent without knowing the degree to which one group can outperform the other.

Furthermore, even if we can make a general statement about whether trading or investing gives a better result, it wouldn't necessarily translate to any individual's case. Maybe, in the aggregate, investors do outperform traders over the long term. (I'm willing to accept that that may be true.) But that doesn't mean that every investor outperforms every trader. (For example, it may be true that Americans, in general, are more overweight than Asians. But that doesn't mean that every American is heavier than every Asian. And you certainly couldn't conclude that every American should therefore be on a diet, while no Asian needs to watch their weight.) So even if investing outperforms trading in general (which is debatable), a talented trader would still be rational to stick to trading if he is sufficiently good at it. It really comes down to each individual finding out what works best for them, given their skills and experience and personality.

I know of traders who have made over 50% per annum consistently over the last four years (some nearer 100%), after expenses. You'd certainly be hard-pressed trying to convince them that they shouldn't be trading, because of the high expenses involved!

Cheers, Staybaker.

Great post there Staybaker - on the ball...

 

[Realist]

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

but then market assessments indicate it has achieved its maximum likely capital gain in the foreseeable future, and I can see another property in an area which is beginning to show good appreciation, then, yes, I will sell my initial investment property and buy where I can expect further appreciation.

It's nothing more than maximising opportunities.

Well Julia, in my opinion if you sold an investment property soon after buying it because its "value" had decreased then you made a mistake. Either in purchasing the wrong property, or in believing other peoples valuations.

Do not ever forget "values" are merely other peoples opinion. They change constantly depending on peoples moods.

Be a leader, not a follower in life! Make your own decisions, do not let other peoples judgement decide what you do. If you have a damn good house that you like - keep it!!

Surely no-one thinks real estate agents give fool proof valuations on properties?? Just like share prices are not fool proof valuations of a companies worth.

Sometimes they are wrong.