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Post by oldman on Oct 19, 2013 8:16:11 GMT 7
As a fundamental investor, I put in a lot of effort in determining the price at which I will buy a stock. Those who read my book will know that I usually buy stocks only at a significant discount to net assets. This gives me the margin of safety that I need to reduce the risks that I take in investing in the stock market.
When I have decided to buy into a stock, I then do my own technical analysis on the stock. Usually, all I want to do is to draw the trend lines as well as the support and resistance lines and keep an eye on the volume traded. The reason I do this is because the market is all about supply and demand and I know that most investors and traders will be more comfortable buying at a certain level and more than likely, will be selling at another higher level. These form the support and resistance prices and for those of us in the market long enough, we can easily see these lines from the historical charts.
The trend lines are equally as important to me as I do not want to be buying a lot of stocks when the trend is downwards. Yes, I will still buy in a downward trend if I believe in the fundamentals of the company but I will not rush into buying. Rather, I would pace myself and leave a lot more ammunition to buy in the future. As for the drawing of these trend lines, this comes with experience. After a while, the trend lines in the chart stares at you and it really does not take much effort in drawing these once you have the experience.
I use the same support and resistance lines to help me sell a stock. I like to sell into strength and eat on the way to paradise. This means that if one of my fundamental stocks start moving up strongly, I will not hesitate to sell slowly. The price at which I sell will be determined from the support and resistance lines that I have drawn. The percentage of my holdings that I will sell really depends on my view of that stock .... whether the rise is justified in terms of company performance or other factors and of course, my general view of the markets.
If it is a young bull, I am unlikely to sell just yet.... in fact, I may even buy more stocks. However, if I feel that this is the last phase of a bull market, I am more likely to sell when the stock price rushes up, especially when there is no obvious reason for the rise.
I don't normally use moving averages or any of the other signals or indicators as I don't usually trade the market. However, for those who prefer trading, you may be better off just using a simple indicator like MACD as this is commonly used by many of my broker friends. The rational is that if everyone follows an indicator, it is more than likely that you will be buying together and also selling together. This combined buying and selling together based on an indicator, gives you strength in numbers which you will otherwise not have as an individual trader.
Hence, if you are a trader, it is better to use the most common indicators than to try to find exoteric indicators that very few traders use. Of course, if you believe that these exoteric indicators can truly predict stock prices, then your faith in technical analysis is very much stronger than mine!
For those keen to learn about technical analysis, simply google this as there are lots of free tutorials on the internet. You don't need to pay large sums of money to attend tutorials as I too learnt my technical analysis skills from the internet. Like most skills, it is the practice that will make you a better Technical Analysis(TA) practitioner as the understanding of TA is not rocket science.
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Post by oldman on Oct 19, 2013 8:34:52 GMT 7
Although I am essentially a fundamental investor, I also use very basic charting to help me decide when to buy or sell stocks. To me charting is an art form that provides me a rough estimation of the support and resistance levels. As such, I don't believe in using charts to create precise numbers for these support and resistance lines ... but just broad numbers so that I can remember these easily.
For me, the main support lines for the STI are 2,750 and failing that, 2,650. If it falls below 2,650 convincingly, I am more inclined to be bearish as the next support line after that is a distant 2,350.
The reason I feel that basic charting is important to the fundamental investor is because a lot of investors follow charts. If everyone feels that the last major support level is at around 2,650, then there is likely to be much more selling if the index falls below this level. Many fund managers I know also use charting and if the big money follows the charts, it is important for fundamental investors to also know basic charting.
Right now, I am still cautiously bullish and am still buying.... but I am buying more slowly. Currently, the STI is down 75 points at 2,749 after Dow closed 420 points down at 10,990 last night.
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Post by lovelydaughter on Dec 30, 2013 20:29:47 GMT 7
Maybe too much TA = TA TA .... bye...Too much FA = FAt ..... still good... ha ha.  ... give one the impression that this is a forum that emphasize on trading than value investing. No offence, just personal opinion. Quote kelvesy from Valuebudies forum: I've been hearing so many financial opinions saying that we are headed to a crash soon, certain bubbles are forming, FED officials are cutting off their QE program or trimming it, 2014 will be a growth year or DOW may be hitting 20,000 by Year 20XX. Chartists are showing similarities of certain charts of certain years and our current year and next direction is heading down. No doubt it is important but I think it has small part to play in context of the bigger picture.
As value investors, I think we rather focus our energies on picking good stocks that fit our bill than to forecast the next market action. Hundreds of hours were being placed into forecast, but is it really effective or futile? For me, I feel times are uncertain and markets are volatile. Just get ready a 'war chest' to take tremendous advantages when Mr. Market starts worry and offer you a ridiculously cheap price for wonderful company. Don't have to worry if your company is good, even if the share prices fall, it will go back to normal once everything is stabilized (long-term approach). Take advantage of Mr. Market's mood, dun let it run your psychological emotions. www.valuebuddies.com/thread-3344-post-68782.html#pid68782 |
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Post by candy188 on Dec 30, 2013 22:37:02 GMT 7
Maybe too much TA = TA TA .... bye...Too much FA = FAt ..... still good... ha ha. than value investing. No offence, just personal opinion. Quote kelvesy from Valuebudies forum: I've been hearing so many financial opinions saying that we are headed to a crash soon, certain bubbles are forming, FED officials are cutting off their QE program or trimming it, 2014 will be a growth year or DOW may be hitting 20,000 by Year 20XX. Chartists are showing similarities of certain charts of certain years and our current year and next direction is heading down. No doubt it is important but I think it has small part to play in context of the bigger picture.
As value investors, I think we rather focus our energies on picking good stocks that fit our bill than to forecast the next market action. Hundreds of hours were being placed into forecast, but is it really effective or futile? For me, I feel times are uncertain and markets are volatile. Just get ready a 'war chest' to take tremendous advantages when Mr. Market starts worry and offer you a ridiculously cheap price for wonderful company. Don't have to worry if your company is good, even if the share prices fall, it will go back to normal once everything is stabilized (long-term approach). Take advantage of Mr. Market's mood, dun let it run your psychological emotions. www.valuebuddies.com/thread-3344-post-68782.html#pid68782I was a victim of frequent trading even after attended value investing course in 2011 as the "members only" forum is also filled with TA postings, :(that affects my psychological well-being in holding fundamentally strong business until I realised my mistake this year.  Sharing this intriguing quote from Peter Lynch: "I've found that when the market's Going Down and you BUY funds WISELY,
at some point in the future you will be HAPPY."  Source of chart: wincrt.blogspot.sg/2013/09/create-wealth-through-long-term.htmlDetailed explanation at Bigfatpurse:Once again, Gurus like Peter Lynch have warned the public NOT to React to news when investing. Likewise for analyst reports, forecasts and stock recommendations will not bring you wealth by following them. Most people know that I must buy low and sell high. But why many do not buy when market crashes? Instead they buy just before or during the high and join the crash party? It is human psychology in play! www.bigfatpurse.com/2009/01/peter-lynch-ive-found-that-when-the-markets-going-down-and-you-buy-funds-wisely-at-some-point-you-will-be-happy/ |
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Post by oldman on Dec 31, 2013 6:08:21 GMT 7
For me, there are many more TA practitioners than FA. If I hazard a guess, I think 95% of the market is made up of traders. In this list, I will include those fundamental traders who buy and sell shares within days or weeks as well as those traders who simply use their own gut feel.
If I am correct that the bulk of the market is made up of TA practitioners, then it makes a lot of sense for FA folks to fully understand how TA practitioners think. Understanding TA will show you buying opportunities which a pure FA guy will not know. Also, when I want to sell, I look at TA charts to determine the best price to start selling.
When I started SI, I too wanted it to be a purely fundamental investors' forum. As the years passed, I realised that I was wrong in my initial desire as the market is made up of more TA than FA. To understand the market, one has to understand both and to embrace both TA and FA.
Please do not get me wrong. When I invest in a stock, I use FA alone to determine whether I will buy into the stock. I use TA to identify some of these stocks and to determine when I should start buying and at what level.
When I trade a stock, I use demand and supply analysis together with TA to determine my entry and exit points. As one is trading based on momentum, it is best not to do any FA on the stock. Otherwise, when the stock falls in value, you will find excuses why the stock is still fundamentally sound. In trading, one must have a strict cut loss strategy. FA confuses the issue and hence, best not to involve FA in any way, when you trade.
Many fundamental traders do not appreciate this key difference and end up holding on babies which they will regret. Worse, many fundamental investors are actually traders without them knowing it. This is why many fundamental investors land up losing money.... they do not realise that they are traders more than investors. Successful traders I know use purely TA because they stick to a strict cut loss strategy uninfluenced by FA.
Investors, to me, as those who can hold on to their stocks for years and can ride the upside in the stocks to deliver multi baggers in the process. If you are a fundamental investor who has not experienced multi baggers in your portfolio, you may want to re-read my posting and start asking yourself the important question - am I a trader or a fundamental investor?
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Post by zuolun on Dec 31, 2013 6:58:48 GMT 7
For me, there are many more TA practitioners than FA. If I hazard a guess, I think 95% of the market is made up of traders. In this list, I will include those fundamental traders who buy and sell shares within days or weeks as well as those traders who simply use their own gut feel. If I am correct that the bulk of the market is made up of TA practitioners, then it makes a lot of sense for FA folks to fully understand how TA practitioners think. Understanding TA will show you buying opportunities which a pure FA guy will not know. Also, when I want to sell, I look at TA charts to determine the best price to start selling. When I started SI, I too wanted it to be a purely fundamental investors' forum. As the years passed, I realised that I was wrong in my initial desire as the market is made up of more TA than FA. To understand the market, one has to understand both and to embrace both TA and FA. Please do not get me wrong. When I invest in a stock, I use FA alone to determine whether I will buy into the stock. I use TA to determine when I should start buying and at what level. When I trade a stock, I use demand and supply analysis together with TA to determine my entry and exit points. As one is trading based on momentum, it is best not to do any FA on the stock. Otherwise, when the stock falls in value, you will find excuses why the stock is still fundamentally sound. In trading, one must have a strict cut loss strategy. FA confuses the issue and hence, best not to involve FA in any way, when you trade. Many fundamental traders do not appreciate this key difference and end up holding on babies which they will regret. Worse, many fundamental investors are actually traders without them knowing it. This is why many fundamental investors land up losing money.... they do not realise that they are traders more than investors. Successful traders I know use purely TA because they stick to a strict cut loss strategy uninfluenced by FA. Investors to me hold on to their stocks for years and can ride the upside in the stock to deliver multi baggers in the process. oldman, I totally agree with you, especially on "the market is made up of more TA than FA. To understand the market, one has to understand both and to embrace both TA and FA." The most important difference is that, FA needs at least 3 months to know the latest situation of the company. So use TA as an additional tool/guide instead of solely depending on the company's quarterly reporting which may be obsolete when the facts and figures are released. Besides FA and TA, I also believe in SA (Situation Analysis).   |
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Post by me200 on Dec 31, 2013 8:06:16 GMT 7
In the short term, the stock market behaves like a voting machine  , but in the long term it acts like a weighing machine  - Benjamin Graham. en.wikipedia.org/wiki/Benjamin_GrahamIt's a pity that TA has enveloped Pertama forum ... give one the impression that this is a forum that emphasize on trading than value investing. No offence, just personal opinion. Quote kelvesy from Valuebudies forum: I've been hearing so many financial opinions saying that we are headed to a crash soon, certain bubbles are forming, FED officials are cutting off their QE program or trimming it, 2014 will be a growth year or DOW may be hitting 20,000 by Year 20XX. Chartists are showing similarities of certain charts of certain years and our current year and next direction is heading down. No doubt it is important but I think it has small part to play in context of the bigger picture.
As value investors, I think we rather focus our energies on picking good stocks that fit our bill than to forecast the next market action. Hundreds of hours were being placed into forecast, but is it really effective or futile? For me, I feel times are uncertain and markets are volatile. Just get ready a 'war chest' to take tremendous advantages when Mr. Market starts worry and offer you a ridiculously cheap price for wonderful company. Don't have to worry if your company is good, even if the share prices fall, it will go back to normal once everything is stabilized (long-term approach). Take advantage of Mr. Market's mood, dun let it run your psychological emotions. www.valuebuddies.com/thread-3344-post-68782.html#pid68782 I was a victim of frequent trading even after attended value investing course in 2011 as the "members only" forum is also filled with TA postings, :(that affects my psychological well-being in holding fundamentally strong business until I realised my mistake this year. Sharing this intriguing quote from Peter Lynch: "I've found that when the market's Going Down and you BUY funds WISELY,
at some point in the future you will be HAPPY." Source of chart: wincrt.blogspot.sg/2013/09/create-wealth-through-long-term.htmlDetailed explanation at Bigfatpurse:Once again, Gurus like Peter Lynch have warned the public NOT to React to news when investing. Likewise for analyst reports, forecasts and stock recommendations will not bring you wealth by following them. Most people know that I must buy low and sell high. But why many do not buy when market crashes? Instead they buy just before or during the high and join the crash party? It is human psychology in play! www.bigfatpurse.com/2009/01/peter-lynch-ive-found-that-when-the-markets-going-down-and-you-buy-funds-wisely-at-some-point-you-will-be-happy/ |
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Post by zuolun on Dec 31, 2013 9:29:43 GMT 7
It's a pity that TA has enveloped Pertama forum ... give one the impression that this is a forum that emphasize on trading than value investing. No offence, just personal opinion. Hi lovelydaughter, Perhaps you can start the ball rolling, emphasizing more on FA (value investing) to give readers a balanced view. Pertama forum could be much more interesting if there are more forumers who do not mind spending time and effort contributing more on both FA and TA investing. |
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Post by candy188 on Dec 31, 2013 9:37:15 GMT 7
For me, there are many more TA practitioners than FA. If I hazard a guess, I think 95% of the market is made up of traders. In this list, I will include those fundamental traders who buy and sell shares within days or weeks as well as those traders who simply use their own gut feel.  If I am correct that the bulk of the market is made up of TA practitioners, then it makes a lot of sense for FA folks to fully understand how TA practitioners think.
- Understanding TA will show you buying opportunities which a pure FA guy will not know.
- Also, when I want to sell, I look at TA charts to determine the best price to start selling. When I started SI, I too wanted it to be a purely fundamental investors' forum. As the years passed, I realised that I was wrong in my initial desire as the market is made up of more TA than FA. To understand the market, one has to understand both and to embrace both TA and FA. Please do not get me wrong.  When I invest in a stock,
==> I use FA alone to determine WHETHER I will buy into the stock.
===> I use TA to identify some of these stocks and to determine when I should start buying and at what level.
When I trade a stock, I use demand and supply analysis together with TA to determine my entry and exit points. As one is trading based on momentum, it is best not to do any FA on the stock. Otherwise, when the stock falls in value, you will find excuses why the stock is still fundamentally sound. In trading, one must have a strict cut loss strategy. FA confuses the issue and hence, best not to involve FA in any way, when you trade. Many fundamental traders do not appreciate this key difference and end up holding on babies which they will regret. Worse, many fundamental investors are actually traders without them knowing it. This is why many fundamental investors land up LOSING money.... they do not Realise that they are Traders More than Investors.  Successful traders I know use purely TA because they stick to a strict cut loss strategy uninfluenced by FA. Investors, to me, as those who can HOLD on to their stocks for Years and can ride the upside in the stocks to deliver MULTI BAGGERS in the process.  If you are a fundamental investor who has NOT Experienced Multi Baggers in your portfolio, you may want to re-read my posting and start asking yourself the important question - am I a trader or a fundamental investor?Hi oldman, appreciate the in-depth explanation of of True Fundamental Investor.  This is an intriguing question that every investor should answer truthfully: "If you are a fundamental investor who has NOT Experienced Multi Baggers in your portfolio, you may want to re-read my posting and start asking yourself the important question - am I a trader or a fundamental investor?"- My answer: I had experienced Multi Baggers in my portfolio but that is due to luck during the dot com craze and not based on FA, all gains had been donated back to the market and incurred enormous loss subsequently.  Recently, I conducted a survey in another forum on the portfolio performance todate and there are already 4 casualties, which could indicate that their margin of safety is not high enough & perhaps they are clueless what investment style they are practicing.  |
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Post by lovelydaughter on Dec 31, 2013 11:03:47 GMT 7
It's a pity that TA has enveloped Pertama forum ... give one the impression that this is a forum that emphasize on trading than value investing. No offence, just personal opinion. Hi lovelydaughter, Perhaps you can start the ball rolling, emphasizing more on FA (value investing) to give readers a balanced view. Pertama forum could be much more interesting if there are more forumers who do not mind spending time and effort contributing more on both FA and TA investing. Hi zuolun, It's a tall order to fill. I am a novice investor and interested in FA More.  Since you mentioned FATA, I would like to learn more FA from you. Quote zuolun:
"Besides FA and TA, I also believe in SA (Situation Analysis)." |
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Post by zuolun on Dec 31, 2013 11:24:04 GMT 7
Hi zuolun, It's a tall order to fill. I am a novice investor and interested in FA More. Hi lovelydaughter, Since you're a novice investor and more interested in FA than TA, may I suggest you continue to read and learn more from valuebuddies forumers, there. And if you happen to read any interesting in-depth reviews of any stocks from there, do post the link(s) and share with everyone, here. BTW, I've been a regular reader of valuebuddies forum and I used to quote and post the links on some stocks here in Pertama forum, too. It's a pity that TA has enveloped Pertama forum ... give one the impression that this is a forum that emphasize on trading than value investing. No offence, just personal opinion. Quote kelvesy from Valuebudies forum: I've been hearing so many financial opinions saying that we are headed to a crash soon, certain bubbles are forming, FED officials are cutting off their QE program or trimming it, 2014 will be a growth year or DOW may be hitting 20,000 by Year 20XX. Chartists are showing similarities of certain charts of certain years and our current year and next direction is heading down. No doubt it is important but I think it has small part to play in context of the bigger picture.
As value investors, I think we rather focus our energies on picking good stocks that fit our bill than to forecast the next market action. Hundreds of hours were being placed into forecast, but is it really effective or futile? For me, I feel times are uncertain and markets are volatile. Just get ready a 'war chest' to take tremendous advantages when Mr. Market starts worry and offer you a ridiculously cheap price for wonderful company. Don't have to worry if your company is good, even if the share prices fall, it will go back to normal once everything is stabilized (long-term approach). Take advantage of Mr. Market's mood, dun let it run your psychological emotions. www.valuebuddies.com/thread-3344-post-68782.html#pid68782 |
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Post by lovelydaughter on Dec 31, 2013 20:53:57 GMT 7
The main purpose that attracts me to Pertama forum, after alerted by a friend, is that a true millionaire, Dr Michael Leong is sharing his investment strategies online. Will filter those trading strategies (including TA) that didn't match my investment philosophy. Respect the fact that everyone has the right to voice his opinion on the forum.
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Post by oldman on Jan 1, 2014 5:32:57 GMT 7
Lovelydaughter, thank you for your kind comments. But truly, we learn from each other. I too have lots yet to learn and I am learning from all contributors... sometimes from an investment perspective and at other times, from the other aspects of living. Life to me is more than just investing. I love life and there is so much to learn about everything around us. This is why I expanded the scope of Pertama to talk about everything in life. The main purpose that attracts me to Pertama forum, after alerted by a friend, is that a true millionaire, Dr Michael Leong is sharing his investment strategies online. Will filter those trading strategies (including TA) that didn't match my investment philosophy. Respect the fact that everyone has the right to voice his opinion on the forum. |
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Post by zuolun on Jan 2, 2014 13:11:57 GMT 7
The main purpose that attracts me to Pertama forum, after alerted by a friend, is that a true millionaire, Dr Michael Leong is sharing his investment strategies online. Will filter those trading strategies (including TA) that didn't match my investment philosophy. Respect the fact that everyone has the right to voice his opinion on the forum. Lovelydaughter, thank you for your kind comments. But truly, we learn from each other. I too have lots yet to learn and I am learning from all contributors... sometimes from an investment perspective and at other times, from the other aspects of living. Life to me is more than just investing. I love life and there is so much to learn about everything around us. This is why I expanded the scope of Pertama to talk about everything in life. oldman, Sometimes, by asking questions and giving feedback, it may be the fastest/best way to learn new things in the shortest possible time.  |
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Post by oldman on Jan 2, 2014 14:40:07 GMT 7
Agreed. But it is by thinking and pondering over what has been written that makes the strongest impression. I too learn a lot from you Zuolun. Some of the stocks that you discussed become interesting stocks to me as well given my preference for cheap stocks. Yes, those that are testing their lows. Thanks. oldman, Sometimes, by asking questions and giving feedback, it may be the fastest/best way to learn new things in the shortest possible time. [/quote] |
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... give one the impression that this is a forum that emphasize on trading than value investing. No offence, just personal opinion.
, but in the long term it acts like a weighing machine 
- Benjamin Graham.
