Post deleted by Mat Sklansky
 

Re: Technical Analysis
 

does that teach people how to use stuff like charts at www.bigcharts.com? i've been using those for about 4 months. i don't really get the idea of what all those lines are...

Re: Technical Analysis
 

Technical analysis sucks.

I was looking over the Yahoo Finance message board for Briggs and Straton and came across this post...

"Depending on the movement of the market in general should help this stock higher...I am also looking for a entry point...I am just waiting patiently to time my entry with the trend of the market....I like this chart below...It indicates a bearish reverse signal and suggests a price objective of 89...However, please be careful about advice on these message boards and do your research....Good Luck ....
http://stockcharts.com/def/servlet/SC.pnf?c=BGG,P"

Well my curiosty got the best of my, I'll admit it, and I clicked on the link. I found this...

http://www.freepichosting.com/Thumbs/421580461/9/1.jpg

Now I got to a top 10 finance school and for the life of me I couldn't tell you what part of that graph suggests that I should be buying at 89. All I see is a big ass tic-tac-toe game where "x" appears to be kicking the crap out of "o". Welcome to technical analysis.

Post deleted by Mat Sklansky
 

Re: Technical Analysis
 

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Tech analysis by itself ssucks...

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I gotta tell you, I like how you're starting.

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good entries take a story that justify the position. part of that story may be technical analysis. another part might be an event or an economic report... or just the market movement in general.

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I disagree with a lot of this as you may have guessed from my affinity to The Intelligent Investor.

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that chart, isn't that a point & figure?

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I honestly don't know, I don't even know what that is.

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i don't know how to use a timing light on my car, but that doesn't mean they don't work.

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What's a timing light. Also, technical analysis sucks.

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so, your approach... if you don't use technicals as part of you trading, what do you use... i'm curious to hear what your approach is.

trend, gut feeling, news, what?

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Fundamentals of a business. I look at Porter's 5 Forces for any company I evaluate. I want to understand their business as well as possible and understand why they're different than their competitors. The qualitative stuff is always the first step once you find an interesting company. When you invest you're not buying numbers, you're buying a business. I promise no one that goes to work at Apple each day focuses on lowering their PE ratio, I want to understand what they focus on. Once I get past that I hit the quantitative stuff. I'll almost always do a DCF, depending on the nature of the business I'll use different models. If you want more info on this let me know.

The main point is to remember the qualitative stuff that most people leave out. Also, don't buy something that you don't want to own in 10 years. If you didn't make more than 20 investing moves for the rest of your life you'd be doing yourself a favor. This is all straight out of the Graham school of thought.

Post deleted by Mat Sklansky
 

Re: Technical Analysis
 

If you want to learn technical analysis, learn candlestick charting, and pay attention to volume and movements. Technical analysis has its place, but it is for short term investing and entry points. The main thing I look for in trading stocks is price/volume movements near tops and bottoms. This has the biggest impact on my buying or selling a stock.

The other areas I look at is Retracements and how the volume is coming back, typically if a stock goes up on volume and retraces on less volume, you can expect some more up side movement of the stock.

Briggs and Strat. in the link you have looks like a strong stock. I would not be buying at this point though. I would like it to break the Double Top from SEP and hold. If it does, I would suspect the bottom in OCT to be tested again because of the High Volume it had.

Good Luck

Re: Technical Analysis
 

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I would like it to break the Double Top from SEP and hold. If it does, I would suspect the bottom in OCT to be tested again because of the High Volume it had.

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I have no idea what you're saying, honestly. The company is awesome and so is the stock right now, but unless you're managing a million dollar portfolio you're buying it will in no way impact me so do as you wish.

Re: Technical Analysis
 

If TA has any value then it is just because everybody watches it. But I've never heard about or met anyone that has outperformed the market based on TA. The way it usually goes is they make a prediction. If their prediction holds true then it is because their system works. If their prediction doesn't hold true it is because support/resistance/trendlines/patterns/etc. have been broken.

Listen to what Evan says about intelligent investor, he is on to something.

Post deleted by Mat Sklansky
 

Re: Technical Analysis
 

You can talk about semantics all you want, the goal is to make money and I've never seen anything that makes me believe that TA is a way to make money.

Re: Technical Analysis
 

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please separate the idea of LONG TERM INVESTING (which i do) and short term trading

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I do seperate them, quite a bit actually. I treat one as the gold standard of managing capital and the other as fallacy. I'll leave you to guess which is which.

I think we may have found our main disagreement. Seriously, I will never accept "short term investing" as investing, it is specualation. If you like to do it that's fine. I was at the Borgata this weekend and I played some blackjack because I was drunk and it was fun, not because I felt lucky and thought I was making a winning bet.

Re: Technical Analysis
 

evan,

Value investing is what I do for a living so I am on your side but you should also realize that there are people who are good traders and can make money at it. A good trader is speculating/gambling only in the same sense that a good poker player is speculating/gambling. However, I don't know of any successful traders that use strict TA to trade. The good ones mostly would say that they 'read the tape'. I'd guess the success rate for traders is equal to or lower than the success rate for poker players.

Re: Technical Analysis
 

I do not doubt that peope can make money on short term trading. There are probably even people who can make money using purely technical analysis.

However, I can also make money by checking aces in the BB after 7 limpers. Do you see my point?

Re: Technical Analysis
 

I dident get a chance to read that book, although I will. An iteresting book on that topic is "Beat the market" by Edward Thorp.