Fundamentals DONT MATTER

[DesertCat]

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...in deciding to take a position in a security.

That's because the sum-total of all information available in the universe about any security (including the baked-in "fundamental" info) is reflected now, in the price and volume. And in the price and volume of related (correlated and non-correlated) securities, such as options. The price of the base and related securities (and often, the relationships between them) represents everything that can be known, now.


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Buffett's entire career disproves this. He constantly buys securities in open markets where the market price does not reflect the obvious fundamental value of the security.

As far as fundamental analysis being "trend following in drag", EPS growth is a key component of a securities value, and any fundamental analysis. Whether the "trend" of EPS growth will continue, and for how long, is a big part of the analysis of a securities value.

A trend follower buys because the trend is up and hopes it continues (and that they can sell before it stops). A value investor buys because the current market price doesn't reflect the weighted likelyhood of future earnings discounted for time.