@amitrandive and @protrade
What protrade seems to be doing does fall under "fundamental analysis" but he is relying on information that is not always numeric in nature. In his appraoch, each stock is like a living breathing person.
Thanks Mastermind007!
Let me explain my logic slightly deeper, so people understand clearly. I consider this to be the ground up value approach of investing.
First find businesses that are doing well - especially businesses where the market and the analysts are not seeing some factors that could influence the business. Or maybe, where there is something wrong, but there is some scope for turnaround in the future - again, something missed by markets and analysts.
Out of these businesses, find ones that are trading at discount to their peers, and at discount to the market. This makes sure that the idea gets tighter.
Thirdly, do a basic technical check - even if you are not bothered about the technicals, the reality is that many others are - and that creates its own problems. For instance, a stock like Reliance could see extra resistance against psychological levels like Rs 1000. You won't get much mileage buying the stock at 990, however good the prospects are - might as well wait for a decisive break over 1000. Or some other such levels based on other tech indicators.
The stocks that meet all these criteria, would typically give you excellent performance. But don't just leave it at that. Because there is an opportunity cost to money. To overcome the opportunity cost, you can consider putting on covered call positions, etc, on some of these names - so that even if stock stays where it is, or moves marginally down, you can still make some money. And anyway, you can put on the covered call relatively cheap - your share position itself serves as the margin.
On top of all this, you need to make sure that your overall market direction is correct - despite all these things, if the market direction is drastically wrong, you could get taken to the cleaners. But that's where the covered calls also help to some extent. Some traders could also use the premium generated by the covered calls to buy some index puts - to protect against market direction risk.
Finally, avoid high beta stocks - typically a stock that moves up or down too much, could be operator manipulated. You don't want to play that game - because you will always be the bakra in that game.
With this sort of systematic structure, you are best positioned to beat the markets handsomely - every single time, or at least majority of the time. The beauty of this structure is that you don't need to worry about stoploss, target, etc - as long as your fundamental idea is sound and market direction is not too dicey, you are fine.
Wars are not won by the strongest armies. The wars are won by the armies that know which battles to fight, and which to simply avoid.