I feel like fundamental analysis is completely useless

[Tradex]

and tell me how much better your long term technical systems perform...

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.

 

[ironchef]

Well, fundamentalists are much more willing to keep a plummeting stock, that's for sure.

For every C, we have SHOP, BRK, GOOG, MSFT...

 

[Tradex]

For every C, we have SHOP, BRK, GOOG, MSFT...

Thanks God.

 

[RGLD]

For every C, we have SHOP, BRK, GOOG, MSFT...

Wait.. Those are correlated...

 

[gaussian]

I would BUY a stock making higher highs and higher lows anytime, even if the company has negative earnings and the CEO just committed suicide.

As a timing device fundamentals are useless.
At best they can "explain" (and predict)....the past.

Fear and greed move the market, not fundamentals or news.

The law averages my friend. On a long enough time horizon fundamentals are the force moving the market.

This is especially true on stocks that are not covered well by analysts. Which, btw, are the ones you want to be doing fundamental analysis on.

You aren't timing the market with fundamentals. This is a fundamental (lmao) mistake of technicians. Fundamental traders can still use technical timing signals.

The idea of fundamental analysis is to get an idea of a fair price of an issue. If the stock is below that fair price it's worth a buy. Do you want to buy it now, or down the road? Well, that's up to you. If you've got some capital to spare maybe now. But if you think waiting a little longer (perhaps using technical signals) will get you an even better price why not hold off?


You're thinking about fundamental analysis too one dimensionally. I'd give Joel Greenblatt's books a read and maybe pay a visit to The Intelligent Investor for history's sake.

 

[Tradex]

On a long enough time horizon fundamentals are the force moving the market.

Yes, that much is true, no doubt.

The idea of fundamental analysis is to get an idea of a fair price of an issue

The problem is that there are MILLIONS of traders doing that everyday, without much success.

The only investor who truly mastered and profited from fundamentals is Warren Buffet, all the other investors are just kidding themselves and wasting their time, or they just pretend to make a living with fundamentals (yeah right).

 

[Stockboy]

Think about it, if you can find value or predict events before they happen based on balance sheets and economic data, but the market hasn't moved, it means it doesn't agree. Traders know going against the market is a terrible idea. Market is always right. If a bad company you analyzed is trending, than more than likely there is something you missed.

The whole concept is of fundamental analysis is just confirmation basis for technicals. No matter how good a balance sheet is for a company, it's a risk if the market isn't heading that way or the opposite direction. The best course is to just stay clear until the market agrees, which means you wasted countless hours looking at SEC filings for something that may never happen.

I feel like your statement is incomplete.

Fundamental analysis is useless for, daytrading, position trading, investing, outright buying entire companies? another way to say this is WTF are you talking about exactly? (but I would never be so rude to ask in such a way or to ask an incomplete question either)

It would be much easier to spend the time and energy to offer you my opinion if you make statements that are complete, please.

 

[gaussian]

The only investor who truly mastered and profited from fundamentals is Warren Buffet, all the other investors are just kidding themselves and wasting their time, end of story.

I'd argue there are probably more successful fundamental investors than technical investors for a few reasons. First, the logic of fundamental investment is relatively simple. The majority of people don't do much of it themselves and get reports from their broker. Obviously these are skewed towards whatever the broker covers but nonetheless it's something.

Second fundamental investors buy and hold. It's fairly easy to eventually turn a profit (one penny over breakeven) if you wait long enough on even a half decent issue. Time horizon has a major effect on return. There's a good book called What Works on Wall Street that covers that issue in great detail with a ton of great research.

But yes, your average piker looking to throw money into the market is likely better off investing in a well diversified ETF. It is a ton of work and if you haven't taken an MBA 3 sheet course or specifically trained yourself to read them it's very easy to arrive at the wrong conclusions. I agree. The devil is always in the details and just looking at EBITDA and cash flow is not enough.

 

[Tradex]

The majority of people don't do much of it themselves and get reports from their broker.

If their broker could predict the direction of the market he would not be a broker to begin with.

It's fairly easy to eventually turn a profit (one penny over breakeven) if you wait long enough

If you wait long enough you will experience a mega, mega drawdown, and it will take you years or decades to recover from it, if at all. Not a comforting idea when you are counting on that stock market money for retirement...

Buy and hope is for losers, it's a trap invented by brokers and Wall Street sharks to keep us in the market all the time.

Buy when the trend is up, short when it's down, that's all there is to it.
And zero fundamentals here, just simple price action.

 

[RGLD]

I feel like your statement is incomplete.

Fundamental analysis is useless for, daytrading, position trading, investing, outright buying entire companies? another way to say this is WTF are you talking about exactly? (but I would never be so rude to ask in such a way or to ask an incomplete question either)

It would be much easier to spend the time and energy to offer you my opinion if you make statements that are complete, please.

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.