I feel like fundamental analysis is completely useless

[ironchef]

While you fundamentalists wait years or decades to earn 12% a year (if you are lucky) with your extremely time-consuming and complicated fundamental approach , we technical analysis day trade or swing trade the market and earn triple that return (at least), using only price action and/or ridiculously simple trend-following indicators, like moving averages.

I won't try to convince you because I know you are a successful day trader and you should stick to what is successful for you. However, there are more than one way to skin a cat.

Fundamental probably won't work for day trading. But for someone who swings, a combination of fundamentals and charts or TA might give that someone an edge.

 

[ironchef]

Thanks God.

Yes that is what I said everyday.

 

[Tradex]

Fundamental probably won't work for day trading.

Yes I know IronChef, fundamentals are supposed to work in the longer term (daily, weekly or monthly charts).

Their alleged predictive value is still debatable however.

But hey, if fundamental analysis can somehow help you (or at least confirm your position), so be it, why not.

 

[RGLD]

I remember buying this stock TITN in late 2000's. The fundamentals were top notch, IBD gave the stock a high rank. The stock is at $12 now and I don't care for the fundamentals anymore only for the purposes of writing this. So much for the long game, I'm glad I didn't average down.

 

[Stockboy]

My point is fundamentals is confirmation basis for technicals. I did not invent terms like

"Don't catch a falling knife"

Fundamentals also have the problem of encouraging investors to buy on the way down. With how much information is out there about the market, do you really think you can process it all and justify buying more or holding on a stock based on your own research?

I bet more people went bankrupt with fundamentals more than technicals. Because with Fundamentals it's one big trade, averaging on your own down until it eats up all your winning trades too. One day you'll re-cup your losses when the market realizes how under valued your company is. Yes you can play the long game, but remember sometimes the destination is at 0.

Okay you still have not stated are you referring to day trading, position trading, investing, or outright buying businesses ???

 

[maxinger]

 

[RGLD]

Okay you still have not stated are you referring to day trading, position trading, investing, or outright buying businesses ???

I just trade. I don't use time frames, I have positions that I've been on since last year. I just find it a waste of time when I look at a good company and I see it already trending. I could have just found a trending company than see why it's trending.

Just recently I've been looking at LULU. Great company, explosive growth and lots of potential. Oh what's that? It's already up like 40% this year? Is it over valued? Why I do all that research?

The worst thing is if you look at a good company but it's trending down. You buy it thinking based on your research it's a good entry. Than when it goes lower, you buy more... That never ends well.

And the opposite might be true, you find a trending company, you see bad fundamentals so you short it.......

 

[RGLD]

Yes I know IronChef, fundamentals are supposed to work in the longer term (daily, weekly or monthly charts).

Their alleged predictive value is still debatable however.

But hey, if fundamental analysis can somehow help you (or at least confirm your position), so be it, why not.

Why do people always think fundamentals is "Long Term" like some never ending void?

You can always use fundamentals in quarterly reports. If you think they're going to have a good quarter, that's only a 3 month investment.

 

[Tradex]

You buy it thinking based on your research it's a good entry. Than when it goes lower, you buy more... That never ends well.

Exactly.

Sometimes at my local bar I hear total idiots saying stuff like : "Today I bought XYZ stock, it is a GOOD company!"

Then I put the ticker symbol on my smartphone and show them that the stock is clearly in a downtrend. Their reply? "Nah, it's Ok, it will come back, the company is solid!"

Yep, pure fundamentals crap in action.

 

[Tradex]

You can always use fundamentals in quarterly reports

Yes, but some financial instruments - like currencies or interest rates - trend for years and years, and fundamentalists try to predict these slow movements on the higher time frames (with dubious success probably).