Is Fundamental Analysis Somewhat Useless?

Quote from deucy28:

"Is fundamental analysis SOMEWHAT useless ?"

Just about everything is SOMEWHAT.

Asking a question like this needs some more definition. I search the internet for answers to questions and find what turns out to be very different answers that eventually I learn all of them turn out to be right. How can that be ? My huge peeve about articles on the internet is they mostly are not dated. What is true today can be different from 3 months ago which can be different from a year earlier, which can be different.......

And this ONLY refers to time frames. Just a few posts ago, TheMickey just posted, "Trading / investing successfully is fraught with twists and turns..." OldTime just posted, "I make money by betting how fundamentals will affect the market long term. Doesn't help me much on a daily or even weekly basis," which is exactly opposite of what make my gains.

This is why as a pairs trader who is apt to hold positions longer than I suspect most pairs traders (I learned this about myself from a great ET thread on this style trading), I have found that fundamentals and their associated events dampen out over time as manifested in their stock plots, and do so with the Short leg in my pair and the Long leg in my pair. (Mind you, these are selected stock pairs with good correlation.) I am so much a pariah to other pairs traders, I even ignore imminent earnings reports from chasing me out of positions or putting on a hedge, e.g. options. Time heals wounds and time dims memory of good events. I don't worry about a trade becoming "an investment" because of it getting a way from me, because "reversion to the mean" is another manifestation that fundamentals all come out in the wash between the two stocks. Studying varying chart TIME frames proved this to me before getting into the trade.

So the thread originator's question is open ended to correct answers coming from all directions. This is especially true when it comes to TIME and DEGREE.
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This picture (link below) is worth a thousand words, pretty much illustrating my first post on this subject (the quote above). Particularly when knowing it was just a few ticks away from adding a 3rd layer at an obvious place on the chart (about the middle of the chart on the 14th).

I captured this chart with a screen shot yesterday. I got out a few days before with a modest gain on the first (original) position and a very nice gain on the 2nd layer, but two more days (ending yesterday) would have been all that much more significant. Today, it would have been the pot of gold at the end of the rainbow, intra-day.

Hopefully this post IS end of subject: layering (not averaging down) via pairs trading. Just wanted to put the picture with the original post on the subject.


SEE LAST CHART AT THE LINK SHOWING CI / AET

http://www.elitetrader.com/vb/showthread.php?s=&threadid=134253&perpage=10&pagenumber=277
 
I pay attention to the timing of fundamental releases, but not the content. Purely a technical trader, you know the kind that many think it's worthless, that kind :)
 
I know this thread is old but here's my take.

I check out the fundamentals but I validate my entire outlook by what price is telling me. For instance, if I feel that due to fundamental reasons a market should fall, I would have to see prices setting up for a fall before I trust the fundamental view. In other words, the tape is what I trust. If the fundamental picture isn't confirmed by the tape, then I will listen to what the tape is saying and discard the fundamental view. I trust the tape, why? Because after all, we study the markets fundamental and technically to get an idea of where a market is likely to go, so why not let the market itself tell you what it's likely to do?
 
Money Trust said:
I know this thread is old but here's my take.

I check out the fundamentals but I validate my entire outlook by what price is telling me. For instance, if I feel that due to fundamental reasons a market should fall, I would have to see prices setting up for a fall before I trust the fundamental view. In other words, the tape is what I trust. If the fundamental picture isn't confirmed by the tape, then I will listen to what the tape is saying and discard the fundamental view. I trust the tape, why? Because after all, we study the markets fundamental and technically to get an idea of where a market is likely to go, so why not let the market itself tell you what it's likely to do?
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I agree with MT, most of that, except I hate the tape, too many numbers on tape for me.But I do like candlechart-numbers,+ mountain + valley chart- numbers. because a candlechart picture is worth a thousand ticks /2 thousand ticks...............................................................................................................................................

Don't know why anyone would consider fundamentals useless?????
Rich ''turtle trader'' Dennis said'' I hope they don't stop using fundamental analysis''; LOL but true.

But you do have to be careful;
the fundamentalist oil bulls just ''knew/predicted'' peak oil was bullish/price,LOL. Not a prediction;best trends+ fundamentals look like a gasoline/TX TEA low bid war[bearish] but I am still bullish on tek stocks. NOT a prediction..............................................................................................................................................
 
murray t turtle said:
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I agree with MT, most of that, except I hate the tape, too many numbers on tape for me.But I do like candlechart-numbers,+ mountain + valley chart- numbers. because a candlechart picture is worth a thousand ticks /2 thousand ticks...............................................................................................................................................

Don't know why anyone would consider fundamentals useless?????
Rich ''turtle trader'' Dennis said'' I hope they don't stop using fundamental analysis''; LOL but true.

But you do have to be careful;
the fundamentalist oil bulls just ''knew/predicted'' peak oil was bullish/price,LOL. Not a prediction;best trends+ fundamentals look like a gasoline/TX TEA low bid war[bearish] but I am still bullish on tek stocks. NOT a prediction..............................................................................................................................................
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To clarify, when I say "the tape," I'm speaking of price action in general.
 
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