Involves An Educated Guess
Fundamental Analysis is complemented by
You can be right on the event, and wrong
on your market timing, and still lose money.
You just shorted a stock. Your research
showed what you believe are flaws in their business plan,
reality has to catch up with them.
Market timing teaches us that inevitable
very seldom implies immediate.
A stock does not know you bought it.
Their business plan may have been flawed for a long time;
the stock may continue to go up.
The markets can be wrong for a very long
time. If you review popular fundamental analysts
from prior decades you will find them fixated on metrics
that still exist but are no longer followed.
The obvious value of "eyeballs"
to analysts in the late 1990s has been replaced with other
metrics. Foreign trade balances may be watched closely
one decade and ignored another.
and Dodd still works, but as you get further from
individual companies - inaccuracies and false assumptions
If the markets tide is up, even old hulks
will rise - until they start sinking.
It seems inevitable that the stock will
tank, sometime. It seems inevitable that those who play
the stock's fall properly will make money.
What is not inevitable is that it will
happen now, inevitable is not necessarily immediate. Just
because you are ready does not change reality.
That is the power of technical analysis.
Technical analysis can show you when a move is imminent,
and give you a tool that will tell you quickly if you
You will frequently be wrong.
The value of technical analysis then
is in discovering an entry point where being right has
a large reward, and being wrong is discovered quickly
for a small loss.
That button on the left for EWT will
lead you to one form of technical analysis, Elliott Wave
Theory, that may be valuable if used properly.
That is only one tool in a personal tool
box that should have drawers for both technical and fundamental
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