Originally Posted by
Hoop
Beware of the part-argument....Lets add another part....If FA were the way to go then the market would collapse.....
What do I mean?....Simple logic...If all traders were of one make-up and only used one discipline whether it is FA, TA, Contrarian, Momentum, tea leaves, whatever they would all want to buy in at the same time creating buying chaos and very sharp movement up into overpriced territory (supply/demand).. ditto in reverse...Volatility to the max, or if no-one cared, boredom to the max..
Now lets be sensible guys this never happens in a free market apart from the rare panics...We are dealing with a marketplace..In the short and medium term FA can be worthless as sentiment rules..In the long term FA is very valuable as it can either confirm earlier negative sentiment was correct (company going to the dogs) or confirm earlier negative sentiment was misplaced (e.g AIR last year)...Share investors may be buying shares in a company but they have to realise they are also buying into a marketplace...The market place dictates and it can ruin you..e.g A FA disciple buying DIL at a high price deciding to ride out a bad bear cycle knowing that eventually the price will reflect the favourable forward FA, only to see it bought out and de-listed from the market...ditto investing in Frucor as along term "superannution" buy and hold forever, the market delisted it and you the shareholder had no say in the matter so much for that B&H strategy....The marketplace is made up of all sorts of people with differing ideals,attitudes, personal strengths and weaknesses,temperament, and beliefs, some have moral attitudes and will never buy SKC or RAK some will never buy cyclical stocks e.g AIR.....TA discipline ain't tea leaves or the holy grail of knowing everything.. it just measures (and uses tools to analyse) the sentiment of all the people within the marketplace at specific times from the past up to the last trading moment of present day..Like FA TA does not know the future as it is impossible to collect and analyse data that doesn't yet exist..but we all love to predict the future using our "expert" knowledge and it doesn't matter if we are FAers, TAers or believers of groundhogs, we all love to share our opinions, debate about it and shake around our crystal balls..It's us that makes up the marketplace (and these forums)...May it continue for centuries to come..:cool::t_up:
So today, what does all this mean .....TA says market sentiment towards SUM sucks at the moment.....that is all......