Why Do We Still Need To Read Charts? - Part 2

Why Do We Still Need To Read Charts? - Part 1

I am hearing it again. Charts are irrelevant!

Who's Anthony Bolton?

From Wikipedia, the free encyclopedia

Anthony Bolton (born 7 March 1950) is one of the UK's best known investment fund managers and most successful investors, having managed the Fidelity Special Situations fund from December 1979 to December 2007. Over this 28-year period the fund achieved annualised growth of 19.5%, far in excess of the 13.5% growth of the wider stock exchange, turning a £1,000 investment into £147,000

In his book - Investing Against the tide.

Read chapter 12 - Technical analysis and the importance of charts.

"The truth is more important than facts" -  Frank Lloyd Wright

This is what the chart is telling at the moment - the truth.

If you think you are wiser than the two gentlemen, forget about the book.

Anthony said:

Although at heart I'm a fundamentalist I have definitely found that the combination of two approaches seems to work better than just one on its own. A few years ago I spoke at a technical analysis conference and said that if I was on a desert island and was only allowed one input for my investment decisions, it would be an updated  chart book. I think today  I would still be of the same opinion. The trouble with fundamental data is that I can't single out only one source that on its own would be sufficient. I could, if pushed, run a portfolio with just a chart book - although on a desert island, it wouldn't be high up on my list of survival items.

I look at technical situation as a summation of all the fundamental views available on a stock at that particular moment and it can sometimes be a warning signal of problems ahead. In the world where every professional fund managers knows that at least two out of five share picks will not work out as they hoped this is very useful.

The largest companies are often the most complex and also the most difficult to analyze and, with these, the charts can be most useful in indicating something that is being missed.
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CreateWealth8888:


I believe only the likes of Warren Buffet may have the means to say that charts are irrelevant. Why?

http://createwealth8888.blogspot.com/2009/08/are-you-buying-into-business-or-just.html

Another thing that really puzzle me most - why do hard core value investors think that by reading charts turn them into traders? LOL

So are you ready to read charts?