What statistic could replace earnings in the "Amazon era?"

[farmerjohn1324]

Every trade or investment, that isn't just a hunch or shot in the dark, is based on a prediction of some sort whether using FA or TA or a combination.

The fundamentalist says company X has had Y number of quarters of increasing earnings or revenue or free cash flow or whatever so probabilities say this will continue extending uptrend - for at least the next quarter.

How is that any different from the technician saying company X has Y number of quarters of higher highs/higher lows or this squiggly line is above that squiggly line so probabilities say uptrend will continue - for at least the next quarter?

The fundamentals are more advanced than that. Even people with PhD's in economics mostly don't understand the fundamentals.

And that wasn't the reason for asking the original question. I was looking for a way to separate legitimate companies like Amazon that may choose to have zero earnings because of reinvestment from companies that are not as strong (like perhaps Snapchat?) that have negative earnings and not because they're choosing to invest their revenue for the future.

I'm asking for my own curiosity. I don't even buy individual stocks unless maybe an options spread.

 

[Tradex]

How is that any different from the technician saying company X has Y number of quarters of higher highs/higher lows or this squiggly line is above that squiggly line so probabilities say uptrend will continue - for at least the next quarter?

I must agree with you on this one, some 100% objective fundamentals, like increasing earnings, do have a predictive value.

I believe William O'Neils did some studies on the effect of earnings on trending stocks, in his book How to make money in stocks.

 

[farmerjohn1324]

I must agree with you on this one, some fundamentals, like increasing earnings, do have a predictive value.

I believe William O'Neils did some studies on the effect of earnings on trending stocks, in his book How to make money in stocks.

Well everyone should know that a surprisingly good earnings report can boost a stock.

 

[Tradex]

Well everyone should know that a surprisingly good earnings report can boost a stock.

Of course, but 50% of the time the stock goes south, even if the earnings report is good.

 

[IamTheCasino]

Of course, but 50% of the time the stock goes south, even if the earnings report is good.

exactly what i was about to say. This dude still thinks predicting something is possible. He will only learn after losing a ton of money based on his "predictions" it seems.

You can have the makings of the "perfect trade" and still go tits up. Nothing is guaranteed except the probability percentage over a series of trades e.g. a casino. Thats it.

 

[farmerjohn1324]

exactly what i was about to say. This dude still thinks predicting something is possible. He will only learn after losing a ton of money based on his "predictions" it seems.

If there's no way to predict anything... Then might as well play roulette, right?

 

[IamTheCasino]

If there's no way to predict anything... Then might as well play roulette, right?

when it comes to each individual trade it is no better than roulette, you are right.

Over the course of 20+ trades you couldnt be more wrong.

A casino needs to win 51% of the time to make money. thats it. You think they can predict who wins or loses each spin of the wheel? Nope they cant - they play the probability percentages.

The sooner you accept this truth the less money you will lose thinking you can somehow predict the human behavior of thousands of people at once. Last i checked you arent God.

 

[farmerjohn1324]

when it comes to each individual trade it is no better than roulette, you are right.

Over the course of 20+ trades you couldnt be more wrong.

A casino needs to win 51% of the time to make money. thats it. You think they can predict who wins or loses each spin of the wheel? Nope they cant - they play the probability percentages.

The sooner you accept this truth the less money you will lose thinking you can somehow predict the human behavior of thousands of people at once. Last i checked you arent God.

Ok. So I need to be right 51% of the time. Which I actually said in the last paragraph of post #11.

 

[Tradex]

If there's no way to predict anything...

There is no need to predict anything.

For instance a lot of traders make money following the trend. They are not predicting the direction of the market and yet they are making money just following its trend.

 

[farmerjohn1324]

when it comes to each individual trade it is no better than roulette, you are right.

Over the course of 20+ trades you couldnt be more wrong.

A casino needs to win 51% of the time to make money. thats it. You think they can predict who wins or loses each spin of the wheel? Nope they cant - they play the probability percentages.

The sooner you accept this truth the less money you will lose thinking you can somehow predict the human behavior of thousands of people at once. Last i checked you arent God.

The probabilities of casino games are written into the rules of the games.

There are no such written rules in stocks, currencies, commodities, futures, options, etc.

This is where knowledge of macroeconomics comes into play to enhance your odds.

Don't tell me your using TA, are you?