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re: 50 Unfortunate truths about investing
Posted on 3/12/13 at 9:05 am to Fat Bastard
Posted on 3/12/13 at 9:05 am to Fat Bastard
quote:
complete and utter BS. it has worked for me just fine. as well as others. as a matter of fact i have taken a loss before at times when all i used was FUNDAMENTALS. chew on that.
The price of a stock should reflect the value of the company, do you agree? The value of a commodity should reflect the supply and demand of said commodity, right?
Technicals "work" because people want them to work and see things that are completely and utterly irrelevant. I think it is absurd that technicals must be taken into account when valuing an asset simply because a large portion of investors believe they have value, when in fact they should be irrelevant. For example, if a large chunk of investors believe Stock A should always be down 1% on Tuesdays, that would be an absurd, yet necessary piece of information to use in the valuation of said stock. Technicals are in the same boat.
1
Posted on 3/12/13 at 11:57 am to slackster
quote:
The price of a stock should reflect the value of the company, do you agree? The value of a commodity should reflect the supply and demand of said commodity, right?
It SHOULD, but it doesn't always work in practice.
quote:
Technicals "work" because people want them to work and see things that are completely and utterly irrelevant. I think it is absurd that technicals must be taken into account when valuing an asset simply because a large portion of investors believe they have value, when in fact they should be irrelevant. For example, if a large chunk of investors believe Stock A should always be down 1% on Tuesdays, that would be an absurd, yet necessary piece of information to use in the valuation of said stock. Technicals are in the same boat.
Once again, the irrational market doesn't care whether or not you believe that technicals SHOULD work. The truth is that technicals DO work, and therefore you should take them into account when trading. At the same time, if you're investing for the long term, technicals should mean very little to you. If you feel that XYZ is a great buy at $25.00/share, then buy it at $25.00/share and hold on. You don't need to worry about moving averages, volumes, candlestick patterns, etc.
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