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I am a full time physician who invests and trades the stock, commodity and currency markets. I have been investing since 1990 and trading since 1994. Although my profession is my vocation, the markets are my passion. I started investing by utilizing fundamental analysis and relying on analysts... More
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  • Fundamental Analysis - Stop Underperforming Based Solely On Metrics.

    As investors, we can usually be placed into either the fundamental analysis or the technical analysis camp. Each have their advantages and shortcomings however I submit that fundamental analysis on its own is outdated and akin to Russian roulette. Knowing the majority of investors on Seeking Alpha are fundamentalists, my assertion is like trying to convince the hunchback of Notre Dame that he really did have a chance of becoming a male model had he decided to follow that route.

    When fundamental analysis reigned supreme prior to the advent of the personal computer, it really was the only game in town open to those bold enough to venture into the quagmire of rigged markets. Today the landscape is so totally different that it seems akin to committing Hari Kari to rely solely on the metrics of a company to place hard earned cash at risk. Why are fundamentalists so hell bent on sticking to a process that has, at best, a 50/50 chance of a beneficial outcome? No-one can ever assert that their analysis is accurate and based on all the relevant accurate information. The very old boring saying of Mr Market is ALWAYS right is 100% evidence that, irrespective of where you believe the stock should be based on all the marvelous numbers, the glowing reviews, the paid promotions, if Mr Market doesn't think the stock should be trading at the valuation you think it should, it won't. Mr Market is more often than not, irrational, owing to the fact that it is made up of a lot of crazy screwballs, with deep pockets, who don't share your same enthusiasm. Why place your funds into this random mess when there are far superior methods of assessing whether the stock is going up or down rather than why it should be going up or down? What is the reason a fundamental investor doesn't simply look at a chart of his intended investment and simply buy or sell the stock when it absolutely starts meeting it's expected metrics. Charts fortunately can never lie, unlike numbers that can be massaged in anyway, by anyone, at anytime.

    Think about it, keep an open mind and assess what's out there to assist in honing the accuracy of your predictions. Look how much more fun investing could be if you blend the two as our in depth article shows - colouredcharts.com/?p=blog

    Tags: AMZN, ARMH, MCP
    Jan 19 6:08 PM | Link | Comment!
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