Fundamental or Technical Analysis?
By visiting investment blogs, some time I really get entertained by some retail value investors trying to convince others how they have done their wonderful works of deep fundamental analysis while forgetting what their Grand Master towards to the end of his investing life said: A Conversation With Benjamin Graham
Technical or Fundamental analysis
One uses technical indicators and charting to forecast the stock price movement while the other one uses financial ratios, understanding businesses and attending AGMs to judge the quality of the Management and by asking the Management a few questions here and there to justify their investment decisions.
Technical or fundamental analysis are both guesswork and speculative in nature and the final results of such analysis are never certain and often lagging in nature.
The future of any company can turn unexpectedly in short time due to the external circumstances far beyond the control of the company and often the Management of these affected businesses will shut their mouths for as long as possible. Some may even deny it outright.
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Hi CW,
ReplyDeleteActually i read somewhere before, that this is where Graham and Buffett differs. Graham believes that you should sell when you hit a certain predefined target price. Whereas Buffet believes that you can earn more by holding on to the stock perpetually, as long as the fundamentals remain sound.
So while both advocate value investing, they differ on their take on when to sell.