luckyd1976
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Fundamentals -Its just one tool to add to your chest/info.
Example: Based on my Fundamental views. Im building a LongTerm Jan 2010 Option Portfolio of US Gold Equity companies. (AEM, AUY, GG, GOLD, KGC, RGLD)
Fundamentally, I-rates are going to rise, Gold has had a huge runup, P/E's are all over blown at 36+.
But most people do use Fund
Profit Margins, Market Share etc... But aside for Irate(rs) I think most would say, You need both Fundy + Techy to trade.
iceman17
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Hey Lucky,
Thanks for the info. The first question I have is, where do you get your fundamental news from? I.e. do you have a site or do you watch the news?
The second is what does “P/E's are all over blown at 36+” mean? What is a good P/E?
Third, so would you say with the rise in uncertain times people are more likely to buy gold and therefore the price of gold will and if that’s the case would not also be right to assume that the Swiss franc will also rise and the dollar and sterling will fall?
Iceman
Thanks for the info. The first question I have is, where do you get your fundamental news from? I.e. do you have a site or do you watch the news?
The second is what does “P/E's are all over blown at 36+” mean? What is a good P/E?
Third, so would you say with the rise in uncertain times people are more likely to buy gold and therefore the price of gold will and if that’s the case would not also be right to assume that the Swiss franc will also rise and the dollar and sterling will fall?
Iceman
Fundamentals -Its just one tool to add to your chest/info.
Example: Based on my Fundamental views. Im building a LongTerm Jan 2010 Option Portfolio of US Gold Equity companies. (AEM, AUY, GG, GOLD, KGC, RGLD)
Fundamentally, I-rates are going to rise, Gold has had a huge runup, P/E's are all over blown at 36+.
But most people do use Fund
luckyd1976
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I get my fundamentals form listening, learning, reading, and watching. Theres a various of sites, none that stand out as #1 for Fundmental news.
MHO P/E's in gold have been taken to the roof! P/E's vary by sector and industry. But sometimes you see these type of events where HedgeFunds pick Equities as trading vehicles as a proxy for the Commodities. ie Oil/Airlines/Gold etc... And when this market psychology is over, The Stock Equities come crashing hard back to market norms for the particular industries.
Uncertain times can be a hotly debated issue.
But from my point of View.
Gold is #1 an Inflation hedge. ECB and the FED will combat it very Soon. Friday was An Eye opener for them Finally! The US jobs NFP tanked the USD and Programmed trading shot off (+8%) on the Oil market (Short Dollar/Long Oil) They are now focused on INflation. Raising rates ARE HERE TO COME. Raising rates, Strengthens USD, Tames Inflation Lion and the GOLD MARKET will sell OFF. And thus all the Gold Equity companies will see their 36+ PE's contract to the normal levels a 10- 20ish average.
P/E
Maybe you could have a look to this Online Data and learn shiller
For earnings sp500 look S&P | Indices > Equity Indices - S&P 500 - Earnings
For single stock see earnings reports
What aboit fundamental analisys....
It depends on what you trade: you may have to look to CPI or rates or earnings or macro like GDP Housing Price...or all them and...
Worst of all Fundamental analisys don't let you make money !!! .....or does ?
P/E
Maybe you could have a look to this Online Data and learn shiller
For earnings sp500 look S&P | Indices > Equity Indices - S&P 500 - Earnings
For single stock see earnings reports
What aboit fundamental analisys....
It depends on what you trade: you may have to look to CPI or rates or earnings or macro like GDP Housing Price...or all them and...
Worst of all Fundamental analisys don't let you make money !!! .....or does ?
Anyone who is an investor for the longer term will ignore FA at his peril.
Short term trading may not need it, especially with the Footsie shares , because most shares move with the index over a short period. Even so, I try to stay away from anything which has results, etc. coming up. RBS, a few years ago, had excellent results
but the plans that it had did not go down well with the market and the shares started to slide within a few hours.
I had them.
Split
I never trust FA of individual companies, regardless of my planned investment timescale. But I never ignore market sentiment, geo-political news and sector-wide FA, though I find it best to wait for the impacts of these to be reflected in the TA before making a decision on positions. The idea is to be in long positions only when the whole market, or at least that sector, is rising: then, if timing or calculating the entry was a little out, the rising tide will re-float me. Same applies to shorts, but in reverse obviously.
It is also intriguing to see how often FA is predicted by TA, e.g. a rising price on falling volume often comes right before a negative announcement or news item.
It is also intriguing to see how often FA is predicted by TA, e.g. a rising price on falling volume often comes right before a negative announcement or news item.
I interpret your post as being from a trading point of view. I agree with you, provided that you are trading the highly capitalised companies because these will have a high volume. Everyone piles into these shares when there is optimism and gets out quick on pessimism.
I've made good profits on small caps by using FA. Sometimes they take ages to move but its a different ballgame. I would never invest relatively large amounts in a company that had lousy figures, even if the chart looked good. Neither would I invest in a company with good figures if the chart was in decline.
I'm still trying to improve and there's lots of room for that!
Split
Hi split - yes, iceman, here is a caution that I am a trader and look at the question as a trading issue. I could never bear to put money into even the soundest company if it has a flat chart, regardless of its FA (including dividends). I admit this is a psychological issue, not a strictly financial one, but I need to see each parcel of money invested working to justify its position every month. Which is one reason I have no shares today but am more eager to see the market rally, then fall further, so I can short it.
I can also say that I don't trust my own FA skills over those of the market professionals. If they don't this week believe the FA sufficiently to put money in, in sufficient quantity to move the price north, I am not going to claim to be cleverer than they are.
I can also say that I don't trust my own FA skills over those of the market professionals. If they don't this week believe the FA sufficiently to put money in, in sufficient quantity to move the price north, I am not going to claim to be cleverer than they are.
I interpret your post as being from a trading point of view. I agree with you, provided that you are trading the highly capitalised companies because these will have a high volume. Everyone piles into these shares when there is optimism and gets out quick on pessimism.
I've made good profits on small caps by using FA. Sometimes they take ages to move but its a different ballgame. I would never invest relatively large amounts in a company that had lousy figures, even if the chart looked good. Neither would I invest in a company with good figures if the chart was in decline.
I'm still trying to improve and there's lots of room for that!
Split
I agree with both ! FA sems to me the guideline to enter (in long frame of time ) and TA can give Time to trade.
Moreover Icould argue FA is more complicated to learn and so much are the variables to have a look ... so that's the problem and the reason because it's less popular even if so :smart: Usually i never go to trade without having an idea about fundamentals.
I don't believe that FA is all that difficult. Constant EPS growth over five years. I'm very interested in the amount of debt and what they want it for, but once you know what to look for it can be sorted with Sharescope, or similar. Then ask around for opinions on the future and read the chairman's report. I don't do much else, but there again, I'm no Warren Buffett!
iceman17
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luckyd1976
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Business and Econ Cycles.
It's industry specific really just like p/s, p/e, expanding margins, etc...
Examples
Housing Turnover Stats---> Carpet companies, Furniture Companies, Bigbox (HomeDepot/Lows) etc...
Consumer Spending--------> Plastic Manufacturers, Metal Working, Equipment Makers, etc...
But all industries do have Fundamental news that can be plotted and tracked. Study the industry, plot the inputs/outputs and track margins.
One trading mentor of mine told me. Fundamental Analysis is Deductive reasoning. Start with Deductive reasoning and finish it off with a chart. Now Im sure he must have gotten it from some book out there, because those lines were to smooth for that old bugger but anyway it does hold true to FA. Now unless you want to become a Research Analyst for some big firm most people dont need that indepth look into Fundamentals. Use the data to make a hypothesis and pick a trade and act on it.
TrendTracker
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Hi tomorton,
an excellent point!! I will print it out and place it on the wall at the office (and at home!).
I think that summarises the whole issue of FA vs. TA. I work in a bank and face this FA vs. TA discussion every now and then. Most of the people who work in banks over here (in Finland) think that FA is a professional/scientific way of looking at stocks while TA is something to frown upon. My first job was in London trading futures for a fund that had all its trading based on computer models. Therefore, I've been TA oriented most of the time. Now, I'm using both TA and FA + market sentiment to create wider understanding of what drives the market.I reckon we will have a traders market for a quite some time from now on. Fundamentals (US-housing, price food and oil, consumer confidence, employment figures) are likely to make sure we'll not have a market for investors months - and who knows maybe for years. What's your view?
iceman17
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what did you look at? ie economic indicators, company reports etc..
luckyd1976
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Fundamentals -Its just one tool to add to your chest/info.
Example: Based on my Fundamental views. Im building a LongTerm Jan 2010 Option Portfolio of US Gold Equity companies. (AEM, AUY, GG, GOLD, KGC, RGLD)
Fundamentally, I-rates are going to rise, Gold has had a huge runup, P/E's are all over blown at 36+.
But most people do use Fund
Two months in GLD -1.3 But the Above picks...
AEM -27.7%
AUY -25.7%
GG -20.4%
KGC -16%
GOLD 7.9
RGLD 9.2
Companies get reigned in when the party is over. Because these companies stock had nothing to do with their fundamentals...
Sames goes for the MON, POT, MOS of the world. Do the makets think we created farming and agriculturals THIS LAST YR??? Fundamentals pay off but it generally does take longer and more conviction To stick with the plan.
