Other people are just impatient, they want to make money fast fast. I believe that market is inherently unpredictable. Charts don't tell you anything about fundamental and systemic shifts in the market. Did any chartists or analysts successfully predict the fall of crude oil price from $120 to $50? None, zero, zilch. Investors are safer respecting the volatility of the markets rather than trying to tame it using charts. That's my opinion. Black swan event may be rare, but it can be catastrophic.
Posted by bracoli > Jun 6, 2015 07:45 AM | Report Abuse Try read the most important thing iluminated, then ull understand the power and reason behind FA
Yes, one of the best investment books if not the best. There are little numbers in the whole book.
Posted by Ooi Teik Bee > Jun 6, 2015 06:18 PM | Report Abuse
I do not want people to twist my facts, please note the change. To win big in stock market, FA alone will not work. You need a combination of market psychology, TA, FA and sectors to focus.
But this portfolio posted here did win big, didn't it?
Posted by Ooi Teik Bee > Jun 6, 2015 06:18 PM | Report Abuse X
I do not want people to twist my facts, please note the change. To win big in stock market, FA alone will not work. You need a combination of market psychology, TA, FA and sectors to focus. I also use FA to invest, but it contribute only 25% of my total consideration. I focus more on TA. If FA is very good, technical chart is a down trending stock, I will not buy this stock even the margin of safety is very high. I am not a long term investor, I want high growth stock so that my ROI is very high in every year. Thank you.
Oh, so the comparison of return is based on per month? I must have missed something because all the time I see record of return is in the form of annual compounded return over a long period of time. Good to learn a new metric.
Good comparison. I would like to get to Tan KW to ask him what is the purpose of putting up my portfolio. Is it to challenge you, or he just put that up for sharing purpose.
Is investment an endeavor to challenge to see who get the highest 6 months return, or is it a mean of building long term wealth?
We are discussing issues, not about people (that I have a small heart). The issue is about this statement:
"To be successful in stock market, FA alone will not work.”
You know I have been posting articles in i3investor, all talking about FA. You know I have been teaching FA to cari makan because can't win big in the stock market to survive.
So we just discuss issue, nothing personal. Don't always get angry fight.
Thanks very much for your positive statement about me. If I have offended you, please accept my apology.
Posted by Ooi Teik Bee > Jun 6, 2015 10:08 PM | Report Abuse
At least I am honest and frank to say that TA alone will not work. I had said it many times here. You need TA to combine with FA.
I had also mentioned in I3, you are the best FA sifu here. The best of the best.
I learn most of my FA from you.
The sifu I learn is always my sifu for life.
I also encourage all the readers to attend your class.
It depends on the time horizon. FA alone can work but maybe not in the short term. Sound fundamental investing techniques will work out in the long term. We have so many examples of successful fund managers using FA methods. I have not heard about Seth Klarman, Joel Greeblatt or Warren Buffett looking at charts before they make their purchase.
Personally, when I first started embarking on investment, I tried learning TA and it just wasn't right for someone like me who cant be staring at the screen all day to cut loss, buy on break -out, bullish divergence etc. Frankly speaking it was damn stressful.
And then I learnt the FA method and it just rang all the right bells in my head. It was simple to understand, intuitive and logical way of investing, looking at companies as bussiness with intrinsic values attached to it. It was a method I could apply without having to spend too much time and too much stress.
I m not saying that TA is not good, but it was just my personal experience. I know that my performance may not be as good as those who use TA or buy only up trending stocks, but at least I believe that in the long run, things will work out for me.
I am a pure fundamental based investor. Let me tell you something - everybody else's TA doesn't work, only OTB's TA works.
I know this because I have attended his course before. As such, I know what his TA is about.
The TA that everybody else uses try to predict how share price will move by looking at trend and pattern. This kind of TA 99% of the time will die. The reason is because it is too complicated, requires too many subjective judgement
OTB's TA is different, he uses a licensed software to detect Breakout point.
His TA's focus is to detect a Buy signal. He doesn't try to predict how the price will move up and go down.
As his objective and method used is simple, it works very well in predicting when the share price is about to rise, hence the right time to enter.
kcchongnz and OTB..come on guys..just relax and chill out..!!!
The financial discipline of FA will determine the INTRINSIC WORTH of any company under study...there are varying methodologies but they all share the same objective in determining the intrinsic worth of any company under study although the intrinsic values may differ based on different methodology and/or different assumptions using the same methodology. Nevertheless the main objective is to determine a VALUE for the intrinsic worth of the company under study..
Having determined a VALUE, the next decision is WHEN TO BUY or WHEN TO SELL???
At any point in time the market price maybe undervalued or overvalued versus the determined INTRINSIC WORTH ....so a savvy FA investor will buy when the market price is below the intrinsic value and sell when the market price is higher than its intrinsic worth. A savvy FA investor will accumulate investment capital/sell overvalued stocks and wait for the opportunity to buy undervalued stocks. A savvy FA investor requires financial skillsets to determine value, patience to wait for opportunity to buy or sell
A short term TA trader usually utilize Daily Chart patterns,1 min , 5 min etc candlestick chart, TA indicators, Price Volume action plus other advanced algorithm to buy at low/relative low and sell at high/relative high...the stocks traded may be Fundamental stocks or it may just be non fundamental momentum stocks or stocks where the fundamentals has yet to translated into future results or in process of being factored in market price...the short term trader will follow the main operator and ride along with the main operator to make the trading profits. However not anyone can be a successful trader as it takes a certain mindset to be a successful trader..I know of friends who are competent in TA knowledge, loves to trade but lack the mindset or killer instinct to be a successful trader. So they end up as losers.
There is another way of investing which we all know from Mr Koon Yew Yin who honed his investment experience through a businessman perspective...buy when a company is making profits, increasing profits/increasing EPS with PE much lesser than 10
FA alone can work if one has the competent skillsets to determine the intrinsic worth. If one does not have the competent skillsets then FA will not work. The key question is having acquired the skillsets, does one has the patience and the discipline of mindset to wait for the opportunity to buy at undervalued price or sell overvalued stocks...
Likewise it takes a certain trading mindset to be a successful trader...even though one is competent in TA trading knowledge...basically its about reading trend directions, price relative to certain moving averages, supports/resistances and oversold/overbought status
Whether it is FA or TA investors, the common problem is they know how to buy but dunno when to sell...or they love their stocks so much that they cannot part with it...
But how long? Because if against TA say TA is 3 to 6 mths w occasional 1 mth. Avg TA do 10% to 20% every 3 mths (avg) they can do 40 to 80% gain a year.
Buy and hold a good fundamental stock when price is cheap should able to provide investor a CAGR of 15% - 20%. Or, it maybe a more. Do check out the records for Warren Buffett and Peter Lynch.
If someone aim to earn more return (to beat Warren Buffett). A combination of TA, FA, trend and machine gun (the margin) would need to come into picture. Maybe, Mr Ooi can advise what's his return (in CAGR) for the pass 20 years. So, we can use this as a guideline.
I believe both approach have different risk profile. And, we have to remember High-Risk Investments Not For Amateurs. Do you think it is so easy to beat Warren?
If we can earn a good living with a CAGR of 15% - 20% (W.B. CAGR is only a 26%, and he is the world third wealthiest person), do we need to take extra risk?
Ok ok but I got 1 BIG Question, I hope sir sir, sifu sifu can help. If Najib step down do you think market will perceive 1 Mdb n other foray solved or not? Will market think n perform base on selected new Pm? Can FA or TA pick up faster? I think tuan tuan, Puan puan got answer d
Most important thing to invest in stock market is to make money. If you think TA alone can ensure you make fast money. Go ahead. If you think FA alone can ensure you make money over long term. Go ahead. If you think TA/FA can make money. Go ahead. If you think you are more comfortable FA/TA. Go ahead.
JUST MAKE SURE YOU WON'T LOSE MONEY. OR AT LEAST MAKE MONEY 9 OUT OF 10 COUNTERS YOU BUY
Whatever is it, no one can say FA alone won't work. Maybe we can say FA alone won't able to provide a very high return - I am interest to know what will be the number?
I think we need to have a longer record to check out the return of both approach.
The value investing (FA) player - Warren Buffett, Peter Lynch, Philip Fisher, and Joel Greenbaltt have a return of 20% - 30% p.a. (CAGR) in their portfolio.
Can I have the name and the portfolio return for FA + TA + Margin player? So, we can use this as a proxy to see what is the return p.a. (CAGR).
We can use above return as a guide and make decision which path to follow.
At this level of klci index, market uncertainty, weak market sentiments, further downside is possible but most likely it is quite limited...market is now waiting for uncertainty to become a bit clearer...rebound is likely as market is already oversold...
ks55, Price right just sell, Price not right, what do you do? Buy some more to average or just sell???
I will focus mainly on whether a company's biz model can continue to deliver future profits, increasing future EPS...I rely on basic TA charts for entry purpose ONLY and focus on FA info on past cashflows..
I will buy only at lowest or relative low. I went into EVERGREEN when it was just coming off its lows sometime in Nov-Dec 2014 as I see value in its improved business model which I concluded then that it will empower it to earn increasing future profits, increasing EPS.... The financials were not impressive then(although it had some good years in the past) but it had healthy cashflows all along although there were losses for quite sometime. Moreover I saw EVERGREEN as a turnaround cyclical stock...I see VALUE in what the controlling shareholders were doing in spending time and money in empowering its biz model and when the Q3 2014 results started to show profit for the first time, I just bought heavily into it. I am still holding it and I am up more than 100%. I had encouraged other investors in Datasonic forum to buy then but what I got was just scorn, ridicule and general blindness to new opportunity..Datasonic then was around 1.60 ...if any investor in Datasonic then had cut their losses and invested in EVERGREEN then, they will be laughing right now instead of crying and hoping.
At that time, the TA and FA were'nt good but I see VALUE in what the controlling shareholders were doing to its biz model..the rest is history...STAR even recommended a BUY yesterday!!!
bracoli, you may perhaps be interested to look at OPENSYS..it had a surge in its latest qtrly earnings, it's in net cash position with forward PE less than 10. Its has good management, it's business model is good but it's your money, it's your decision...OK?? I am still holding to my EVERGREEN
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
YiStock
1,984 posts
Posted by YiStock > 2015-06-05 22:32 | Report Abuse
how possible the chart is actually a designer‘s work? All path are designed to move in particular way..The same goes to financial statement....