Do I Need to Hire a Fundamental Analyst?

[systematictrader]

Stay in futures and forex. From what I can see of your wish to do in this "collecting dividends from companies falling in value", you really are grasping at straws. How's that dollar-gas card idea going by the way? And your progress in starting up your own hedge fund?

I stay in futures in forex but for pretax money i cant trade those instruments, still workinng on the gallon card, and still
Worling on starting a hedge fund, from the track record iam doing in futures and forex, giving it another 2 years bfore i claim consistent victory

 

[birzos]

iam not sure i undestand,,

What don't you understand, you're going to have to learn to explore if you want specific answers, and that starts by asking specific questions. An open ended question gets an open ended answer, it's very simple.

An analyst is only as good as the framework you give them to work in. For that type of information you need access to inside via institutions or direct access.

Given your sizing why do you think you would be able to access information at the top, from the bottom of the ladder. So you need to analyze what's publicly available better than the other traders, which comes back to the framework.

 

[jj90]

@RUFUS MREHIN : I had the same issue with incorporating fundamentals into my analysis years ago. I didn't want a massive FA bias in my positions coming from a start in technicals. But you know what, I learned a lot and it never hurt. Now I can read financial statements, run DCFs and understand at a higher level the intricacies of companies.

Look, the whole I don't want to be biased thing is a non starter. Do you drive looking only out the front windshield? Or do you shoulder check, look at the side mirrors and the rear view as well?

 

[systematictrader]

What don't you understand, you're going to have to learn to explore if you want specific answers, and that starts by asking specific questions. An open ended question gets an open ended answer, it's very simple.

An analyst is only as good as the framework you give them to work in. For that type of information you need access to inside via institutions or direct access.

Given your sizing why do you think you would be able to access information at the top, from the bottom of the ladder. So you need to analyze what's publicly available better than the other traders, which comes back to the framework.

i believe i understand, what ur saying is that i need to be more specific in what i ask or hire some analyst for in the sense of i shouldnt be hiring them and saying what u think of this stock? cuz that might lead to may various answers, where as i zoom in precisly on what i want and ask the person to analyze it ill get more precise info,, and yes giving my size u are right i need to best incorporate whats publicly available,,, makes sense,,, thank u

 

[systematictrader]

@RUFUS MREHIN : I had the same issue with incorporating fundamentals into my analysis years ago. I didn't want a massive FA bias in my positions coming from a start in technicals. But you know what, I learned a lot and it never hurt. Now I can read financial statements, run DCFs and understand at a higher level the intricacies of companies.

Look, the whole I don't want to be biased thing is a non starter. Do you drive looking only out the front windshield? Or do you shoulder check, look at the side mirrors and the rear view as well?

that makes sense,, quick question to u ,,,, would u say the info u learned and the time it took didnt take much from ur devotion of technicals, in the sense if someone asked u today are u FA or TA would ur answer still be that ur TA and thats the dominant part in ur trading/investing structure?

 

[jj90]

@Rufus Mrehin : It's a part of the skillset. You have to get over the notion that TA is the only way to go. Did it take time? Of course. But it's complementary, not a substitute.

I argue that if your TA is being overwritten by your pursuit of knowledge in FA, then either you aren't in the right frame of mind, or your TA was shit to begin with.

 

[systematictrader]

@Rufus Mrehin : It's a part of the skillset. You have to get over the notion that TA is the only way to go. Did it take time? Of course. But it's complementary, not a substitute.

I argue that if your TA is being overwritten by your pursuit of knowledge in FA, then either you aren't in the right frame of mind, or your TA was shit to begin with.

That makes sense

 

[algofy]

In yuur hedge fund the key is adding many fundamental analysts.

 

[Scataphagos]

i TOTALLY agree cuz iam from the school of thought that u come from as welll,, but lets dive deeper a bit please,,, lets take a look at MACYS right now for example,,, at 25.16 the stock would be yielding 6%,, charts tell us stock is hammer, stock is on down trend,,, etc i get it,,, but iam looking to buy the stock at 25.16 and collect 6% dividend if keeps going lower or sell it if it goes up 18% which is 3 years worth of dividend which makes its price29.68,,,, the question is dont u think fundamental analysis here would add value on whether this company is staying in business, maintaining dividend? if insiders are selling? buying?? etc,,, ur inputs are appreciated it

I never consider any potential dividend I might receive. I know, people like to say, "the dividend is getting paid while you wait". But what about the times you wait and the stock drops significantly more than the dividend you earned? Is collecting 6% dividend worth it when you lose 25% on the position? Who's to say "it's gonna come back", and if so, when? What if it's down 50% in 2 years justifying a dividend cut "while you were waiting"?

Playing to collect a dividend is a "buy and holder's" game.

I want to be "in something when it's going up" and flat/short something going down... risking only noise counters... to the best I can manage.

 

[newwurldmn]

The true test of your strategy will be in the next down market to see how you react to adversity.

It will lose money but possibly outperform the market as the dividend will provide a reason for firms not to liquidate it. There is a lot of research supporting that.

OP, I like the strategy. You really need to answer one question: are the divs at risk. For example if the company is leasing out office space (like a reit, it might be at risk).

In this environment a company that pays a 6percent yield has one of two issues: they are passing the tax liability onto you (like a reit) or the market is pessimistic on the future dividend prospects. You need to do just enough analysis to prove the market is wrong.