“The explanation requiring the fewest assumptions is most likely to be correct.” or "Simply put, the simpler one is generally correct."
Yeah. To apply Occam's Razor in my stock analysis:
- By simplifying my TA, I just look at support, resistance, price-volume actions, and trend lines.
- By simplifying my FA, I just look at consistency in dividends and low dividend payout ratio. Dividends are real money paying out by a company, and can only be sustainable if company continues to have cold hard cash from its business. Probably, this is the only indicator in FA that really matters; anything else are just guess works by retail investors who have limited resources to do anything substantial.
Read? Pareto Principle
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