Fundamental Analysis

Fundamental Analysis

As perhaps seen in some other posts, I do not use fundamental analysis on the basis that this sort of analysis is simply opinion based as opposed to technical analysis which shows what is “actual”, and besides I find it very “yawn yawn”. Fundamental analysis looks at a wide range of aspects, not limited to the analysis of a company itself ie its P&L, P/R ratio’s and all that greek stuff, but also to other external economic aspects such as interest rates, and economic data, of which turns me off even more.

When a company releases it’s reports, whether they are good or bad, or whether the analysts have predicted such favourable results it still doesn’t mean the companies stock price will move in the direction one would think the report would send it.  Many a time companies releases favourable data and yet the stock would devalue.  This is another reason I am purely technical. I remember back in 2008 when Qantas was in the lime light for a couple of weeks following various saftey breaches, emergency landings and holes appearing in the fuselage. Even with all the public exposure the stock price continued it’s current trend upwards. Before this news the company had been battling a decreasing stock value. Work that one out…

Essentially I have the view that no matter how the company is doing, no mater what the news reports say, or what analysts are saying the stock will move which ever way it wants based on the psychology of the individuals trading them… Que the Technical Analysis page!