Asked on 06 Dec 2019
Do you use technical analysis? Fundamental analysis? Psychological analysis?
FA TA PA? Why that form of analysis and not others?
It's a mix of both. Once I've filtered out a company to consider, FA will tell me if the company is worth investing in. TA will tell me the entry price.
Fundamental analysis all the way. Techical analysis, well sometimes but I personally try to avoid this (sometimes too greedy haha) because it's a little like timing the market. And it's purchasing the stock based on their past performance. The standard TA support & resistance lines are like "psychological" lines which if you really think about it, doesn't actually make sense. I remember a stock recently, it was at it's support line and people were saying buy. It broke below the support line.. So you gotta be prepared for things like this to happen.
Hey Gabriel! I use morningstar a lot. ^_^
Look at trends such as profitability, debt, cash flow, working capital and conversation cycle.
Fundamental analysis, even though I started with a background of technical analysis.
It's just more fun (imho) to learn about the business, its investment moat via competitive advantage, its revenue streams, cost buckets and potential for economies of scale etc.
It tells us about the value of the business, including reading management discussion and analysis, earnings transcipts and watching the interview for managements.
Fundamental Analysis. Understanding the business, how the management build and grow the business, how they manage in both good and bad times. And in the end how all this reflect on their scoreboard (Financial Reports)
I started at 18 yo trying to do TA, I was seeing my room-mate earning 500 usd in 10mins. But I realised it wasn't suitable for me emotionally and time wise.
Then I tried futures, options, day trading forex etc..
Then I realise at 22, if I just bought VISA and did nothing for 4 years, I would have made so much money!
So I decided to move to FA, and follow Warren Buffett philosophy and it worked so well for me.
I use only FA. This is because i feel no matter how good my TA is, the result still 50/50. But with a proper FA, i am not worried of my entry point because i know i buy into a good company. And so if the share price drop, i know how to react to the situation and not putting myself into stress. While if just by TA, i will easily cut loss if the share price tank.
Sometimes it is good to use TA for entry. But i think it doesn't really matters actually if the valuation is right.
I look at dividends and the price of the stock in the 52 week history. Then I try to find an entry point using supports. This is more for options entry though than stocks.
Fundamental Analysis - Study its moat, competitive strengths & weakness to determine approriate risk/return to enter market
Financial Analysis - Is Balance sheet strong enough to survive a downturn, breakdown of assets/liabilites. Cashflow is able to cover dividends & capex
Technical analysis - Looked at how the stock price behave since its inception, historical bottomline, largest price drop over an interval etc
I use fundamental analysis. My favourite is evaluating cash flow generation as an indicator
Generally, I follow the news broadly and get a sense of the market sentiment.
For stocks that I am interested in, I will study the past annual reports. Through this process, it allows me to understand if it will be a business that I will be interested in.
Once I am ready to buy the shares, I will perform basic technical analysis to find a time when I should long or short the share.
Here is everything about me and what I do best.