is fundamental analysis bullshit?

cole_ said:
Do you think the news is at all useful or is looking at the chart the best way to go? I have the feeling that fundamental trading is a crowded trade.
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Both are important! You can't have technicals without the fundamentals and vice versa. Fundamentals sets the stage for the trend and thereby the technicals start working off it. Trends start changing because of buyer exhaustion (or even more buyer bullishness) combined with fundamental changes in the company.

Case in point; Netflix's 100M movie, Bright was obliterated by the critics and there was so much negativity for Netlflix with Disney's acquisition of FOX. But, most traders watched Bright and saw that this was a brilliant way to enter into a franchise theme breaking away from Marvel (Disney) or Lord of the Rings (Amazon). This is basic fundamental analysis, stocks on the products that we use everyday. Market turned bullish on Netflix again.

A prolonged series of bad fundamental news however, will affect the trend of the stock. Take CMG and GE for eg.

Use fundamentals to invest and use technicals to enter / stay or exit / average down from the trade.
 
qxr1011 said:
What is the difference which stock to trade from the fundamental viewpont?
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If you have a bullish or bearish viewpoint on a stock, most (good) fund managers look at the technicals first (for entry/exit), then look at fundamentals on support their bias.

I'm currently short-term neutral to bearish on SNAP, because their fundamentals doesn't suggest anything remarkable and several failed products (goggles, user adoption). However, their fundamental model of connecting first with millennials, keep them a bullish play for the long run. Again, my individual viewpoint
 
qxr1011 said:
What is the difference which stock to trade from the fundamental viewpont?
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If one were looking for EOD trades that were less volatile, one would look more at stocks deemed blue chip. If one were looking at volatile stocks or shorting, they would go more speculative or those pharmaceutical drug type or exploration companies. Anything with decent steady and growing earnings could be perceived blue chip, anything making no earnings, no dividends, not a producer could be considered speccy.
Stocks with high PE ratios beyond normal expectation also carry higher risk for long EOD traders than those on lower PE's.
Those on very low PE are often unloved and may wallow awhile.
Stocks whose board of directors have politicians or celebtites will often turn to shit.
Stocks with a high % of institutions in the top 20 shareholders are usually worth looking at for the more buy & hold types.
I could go on and on...
 
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Who told you a piece of news coming out is FA? At best, it is the exprssion of some part of it.

cole_ said:
Do you think the news is at all useful or is looking at the chart the best way to go? I have the feeling that fundamental trading is a crowded trade.
More...
 
themickey said:
If one were looking for EOD trades that were less volatile, one would look more at stocks deemed blue chip. If one were looking at volatile stocks or shorting, they would go more speculative or those pharmaceutical drug type or exploration companies. Anything with decent steady and growing earnings could be perceived blue chip, anything making no earnings, no dividends, not a producer could be considered speccy.
Stocks with high PE ratios beyond normal expectation also carry higher risk for long EOD traders than those on lower PE's.
Those on very low PE are often unloved and may wallow awhile.
Stocks whose board of directors have politicians or celebtites will often turn to shit.
Stocks with a high % of institutions in the top 20 shareholders are usually worth looking at for the more buy & hold types.
I could go on and on...
More...

I see that we have quite different approach to trading.
 
qxr1011 said:
I see that we have quite different approach to trading.
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True.
For myself I look for high probabilities prior to entering a position, in other words, try and line up as many ducks prior to pulling the trigger. Random type selection give more random results.
The only fundamental I check prior to pulling the trigger is I will check back on news over the last month or so using google news that there is no lawsuit sort of action in play. I wish to eliminate negative surprises as much as possible.
F/A plays a very minor role in my trading, doesnt comprise of any buy/sell signals, just used in the context of which stocks are in my pool at this time and which aren't.
 
No, fundamental analysis is not bullshit, it's just more relevant to portfolio management and longer term trading and investment.

A trader or investor that knows how to use both will obviously be at an advantage over a purely technical trader or investor.

Intra-day price movement is affected by news and fundamentals but an intra-day trader doesn't need to concern himself with it. For many intra-day traders, it's just an unnecessary distraction.
 
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Fundamentals seem to me to be asynchronous events where current price is sampled to determine if past discounting is correct. Sometimes rapid re pricing occurrs on release proving that past discounting was incorrect and so on...
I couldnt interpret them in any other way for better or worse.
I would think, but may be wrong,that those that can interpret fundamentals are themselves sampling price and positioning for the inevitable correct discounting and favorable re-pricing.
So, the news release lags the FA. Some probably trigger/begin their FA on news events. I would bet the good FA is well positioned by then.
 
I don't agree that the fundamental analysis is useless. I use it myself, as well as technical analysis and then I make a compound conclusion.
 
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