Fundamental analysis vs Technical analysis

[livermore by heart]

Definitely Technical Analysis. If done properly, it covers everything in fundamental analysis (apart from management quality)

I use the following tools that are thought to be fundamental in nature on my technical analysis charts. I find them to be useful in long term forecasts.

1)PE graphs
2) EPS overlays
3) 10 year bond charts
4) Inflation Data
5) Commodity Data : Gold and Crude

and many more...

The idea is that I capture most of the fundamental data along with gauging the action of the smart money using technical analysis.

So, I think if done properly technical analysis covers everything in spirit of the dow theory : PRICES DISCOUNT EVERYTHING

 

[sumeetsj]

Fundamental analysts need to read what Ridham Desai says:


http://economictimes.indiatimes.com/markets/stocks/market-news/morgan-stanleys-ridham-desai-questions-effectiveness-of-analysts-calls/articleshow/18363300.cms?intenttarget=no

 

[drgtgowda]

Read the following page: http://www.stock-trading-infocentre.com/fundamental-analysis.html http://www.stock-trading-infocentre.com/fundamental-analysis.html

 

[aryan.]

Fundamental analysts need to read what Ridham Desai says:


http://economictimes.indiatimes.com/markets/stocks/market-news/morgan-stanleys-ridham-desai-questions-effectiveness-of-analysts-calls/articleshow/18363300.cms?intenttarget=no

Warren Buffett keeps on saying the same thing, which is why he says most retails investors should invest in ETF's

 

[MANISH_DAMANI]

Every body knew bookish definition of both terms. But For me-
1) FA gives me confidence and TA guide me when to use that confidence.
2)FA tells me Who &why but TA tells me when, where and why.
3)FA show me path and TA tell me to walk.
4) FA show me sky and TA tell me when to fly.

So both has its importance and equally used for success.

 

[MANISH_DAMANI]

The premises of technical analysis were derived from observation of financial markets over hundreds of years. The oldest branch of technical analysis is the use of candlestick techniques by Japanese traders at least as early as the 18th century, and now one of the main charting techniques.[4]

Traditionally, "Honno, the God of the markets," a very successful rice trader in early Japan, is said to have invented technical analysis.

Dow Theory, a theory based on the collected writings of Dow Jones co-founder and editor Charles Dow, inspired the use and development of technical analysis from the end of the 19th century. Modern technical analysis considers Dow Theory its cornerstone.[5]

Technical tools and theories have been developed and enhanced in recent decades, with an increasing emphasis on computer-assisted techniques.

 

[MANISH_DAMANI]

FA and TA only wont works on market crashes time. Every body know TA is used for short run specially. FA and TA along with math is also a subjective concept and the way you use the studies.All is money game but every game has some rule to play.Players choose their strategies.If only one cartel dominate market then FA, TA nothing works whether long or short run. Because claiming on FA is only logical is bias without knowing other part completely. Who can guarantee reports given by co.Every body knew window dressing is happening in B/S by almost every co. in such a smart manner even you cannot trace it easily.Secondly if every body become rich then money has no value. In a class not every body come 1st. So to be no.1 we have to work hard for that level. If we are scared of these things we should not come in market for trade.Its all depends on hard work and smart work. If you are buying at high index or when prices run show high whether in commodity or stock market on rumors that market will go to new high then it is problem with your judgement and not with market. Common sense is most important thing.

 

[aryan.]

Who can guarantee reports given by co.Every body knew window dressing is happening in B/S by almost every co. in such a smart manner even you cannot trace it easily.

So use the concept of margin of safety to care of all these things.

 

[Einstein]

So use the concept of margin of safety to care of all these things.

You're statement is incomplete, please elaborate..

 

[Mr.G]

You keep a margin of safety in the sense that we keep a margin just in case our analysis is not Exactly on the market. Eg, my analysis tells me that xyz is worth rs.50 ots currently trading at rs.40 to keep a margin of safety I will buy it at rs.30,just to be safe. So that even if my analysis is wrong by rs.10, I am not at loss.