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#1
12-15-2006, 05:23 PM
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Just read random walk down wall st- techincal vs fundamental analysys
I just finished reading this book and defintly learned a lot. This has been the first book I have read on the stock market so I dont just want to blindly accept everything he says as 100% accurate, but I do like that he is given advice that you wont get rich overnight and that slow and steady wins the race. I dont know much about stocks yet but I know that with all of the poker and blackjack books ive read the ones that offer and get rich quick scheme are crap and the ones that don't are usually good.
For those who havent read the book the author is big on fundamental analysys, rips technical analysis and recommends a buy and hold approach with index funds as the soundsest investment. The evidence he gives for all of these things is very logical and convincing, but part of me thinks that since Im a lot smarter than the average person, very good with numbers and able to handle swings thanks to poker and blackjack I should be able to beat the market(I dont mean right now but if I put a lot of work into it)Then again on the other hand the so called experts usually cant do it so why should i be able to? I know im kinda rambling but I would like to here some thoughts on technical vs fundamental analysys, if the market really is beatable long term, if buy and hold really is the best approach (and if it is how the hell can someone who is buying and holding just hold after something like 9/11 happens knowing it will go down?) 
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#2
12-15-2006, 05:36 PM
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Re: Just read random walk down wall st- techincal vs fundamental analysys
[ QUOTE ]
I know im kinda rambling but I would like to here some thoughts on technical vs fundamental analysys, if the market really is beatable long term, [/ QUOTE ] Yes. [ QUOTE ] if buy and hold really is the best approach (and if it is how the hell can someone who is buying and holding just hold after something like 9/11 happens knowing it will go down?) [/ QUOTE ] Because they don't know how far it will go down before it reverses. The market had been in a long slide well before 9/11. It didn't change the direction the market was going in, just hastened it a little.
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#3
12-15-2006, 07:41 PM
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Re: Just read random walk down wall st- techincal vs fundamental analysys
It's fairly difficult to give a useful answer to the question of technical vs. fundamental.
To get a proper answer will require a lot of study of both technical and fundamental analysis. Then you will have to find a strategy which suits you, given your goals, risk tolerence, etc. There is more than one way to skin a cat in the market. The most important thing is that you are getting educated. Perhaps you could try a technical analysis book next to broaden your base.
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#4
12-15-2006, 08:51 PM
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Re: Just read random walk down wall st- techincal vs fundamental analysys
Stock prices go up because people are buying more than selling. Technical analysis tries to work off of this information.
People buy more than sell because the fundamentals of a company compell them to. Fundamental analysis uses this.
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#6
12-15-2006, 09:43 PM
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Re: Just read random walk down wall st- techincal vs fundamental analy
[ QUOTE ]
This has been the first book I have read on the stock market so I dont just want to blindly accept everything he says as 100% accurate, [/ QUOTE ] Skepticism is very good. [ QUOTE ] recommends a buy and hold approach with index funds as the soundsest investment. [/ QUOTE ] He is absolutely correct here. [ QUOTE ] The evidence he gives for all of these things is very logical and convincing, but part of me thinks that since Im a lot smarter than the average person, very good with numbers and able to handle swings thanks to poker and blackjack I should be able to beat the market(I dont mean right now but if I put a lot of work into it)Then again on the other hand the so called experts usually cant do it so why should i be able to? [/ QUOTE ] Even mutual fund managers, the pros who devote their careers to the stock market, can't reliably beat the market. It's a nice fantasy, but just use index funds to cut risk and cut costs. [ QUOTE ] (and if it is how the hell can someone who is buying and holding just hold after something like 9/11 happens knowing it will go down?) [/ QUOTE ] http://www.ifa.com/12steps/step9/step9page3.asp Scroll down to table 9-2. Also, it's not like you can sell it before it goes down. It goes down because people won't buy it at prices that high, which precludes the possibility of selling it before the price goes down. (I think)
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#7
12-16-2006, 12:21 AM
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Re: Just read random walk down wall st- techincal vs fundamental analy
[ QUOTE ]
Then again on the other hand the so called experts usually cant do it so why should i be able to? [/ QUOTE ] "Experts" take a low risk low return approach to ensure positive gain. As in poker/life, high risk brings high reward......it all matters what side of the coin you land.
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#9
12-16-2006, 02:46 AM
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Re: Just read random walk down wall st- techincal vs fundamental analy
[ QUOTE ]
[ QUOTE ] recommends a buy and hold approach with index funds as the soundsest investment. [/ QUOTE ] He is absolutely correct here. [/ QUOTE ] Absolutely? It might be right for people that know nothing about the market and won't learn, but that's all. [ QUOTE ] Even mutual fund managers, the pros who devote their careers to the stock market, can't reliably beat the market. It's a nice fantasy, but just use index funds to cut risk and cut costs. [/ QUOTE ] Yeah, right. Ever hear of Peter Lynch? Besides, mutual funds are very restricted as to what they will trade. Restrictions that don't apply to individuals.
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