Forum Archive Index - December 2001

["dsproul" <dsproul@corsairmarine.com>]

QUOTE HW:

 

"The basis of Phaedrus' argument here is the "efficient markets hypothesis" which is a tenet of economics theory but is increasingly
questioned by economists, particularly practical economists who get to grips with the real world."

 

QUOTE THE ECONOMIST:

 

 

Economists used to dismiss as mere snake-oil salesmen technical analysts who use simple patterns in past data to predict share prices. Now, some think that stock charts can reveal valuable information.

[The Economist, August 19th, 2000]

                    -------------------------OOOOOOOOO------------------------

QUOTE HW:

"I don't see any evidence of the TA investors actually examining the
fundamentals, analysing whether a share is a commodity share,
how good the management is & and therefore I am puzzled by Phaedrus statement
above."

QUOTE PHAEDRUS:

"I stumbled across this very good article comparing fundamental and technical
analysis. The conclusion? A hybrid system is best. Use both."     (my emphasis)

                    -------------------------OOOOOOOOO-------------------------               

AND FINALLY- QUOTE FROM ARTICLE RECOMMENDED BY PHAEDRUS:

"Buying a stock based on the fact that a stock is fundamentally undervalued, alone, is the trading and investment equivalent of driving at high speed on the wrong side of a major highway, heading into the oncoming traffic and screaming "I'll be fine, I'll be fine - I am driving a safe car"!

One way to get the best of the fundamental and technical analysis worlds is to use a hybrid approach. Fundamental analysis can be used to identify 'value' stocks, for example, however the decision to buy them is only made when an appropriate technical signal is given. Of course, you have to somehow conduct, or obtain, accurate and current fundamental analyses of a wide range of stocks. "

                    -------------------------OOOOOOOOOO-------------------------       

WHAT'S THE PROBLEM?

BEGIN:VCARD
VERSION:2.1
N:Sproul;David
FN:David Sproul
EMAIL;PREF;INTERNET:dsproul@corsairmarine.com
REV:20011207T211703Z
END:VCARD

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