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Resending as I got a returned mail notice of no delivery.
-----Original Message-----
From: John Sellers [SMTP:ay286@xxxxxxxx]
Sent: Wednesday, July 23, 1997 9:33 AM
To: 'Joel Beck'
Cc: 'Cyberspace User Group'; 'Peter Rodriguez'
Subject: RE: Fundamentals?
I also think that fundamentals are important to advancing issues. A point to remember is it does not matter what a person's method is if he is being successful that is what counts. I talk with others and many people have variations of methods. But in general I believe that many think as you and I that fundamentals are the primary driving force for a bullish stock. Also we probably would agree that a strong economy such as ours today adds force to the bullish moves in the market. The bullish moves are probably the sum of the different forces existing in the market.
The other side of an method of investing is how it fits your own personality. For me I am more comfortable holding good fundamental stocks than weak ones. They help give me the staying power that is necessary for long holding periods. Most of my larger profits have come from issues held for longer periods of time.
My approach to include fundamentals is using AAII's Stock Data base of about 7700 stocks with about 138 different fields of data on each stock. Filtering can employed to retrieve a selected group of stocks that meet a criterion. For example long term debt less than 30%, increasing earnings year to year, minimum volume requirements, current ratio of short term liabilities, size of company, PE's and much more. After this selective process one can subsequently analyze these with other methods such as those offered by the Equis Metastock and the Investors Research Library software which both are available through Equis.
I would enjoy further discussion from other participants on their fundamental approaches which they care to offer.
-----Original Message-----
From: Joel Beck [SMTP:beck@xxxxxxxxxxxxxx]
Sent: Tuesday, July 22, 1997 9:49 PM
To: meta
Subject: Fundamentals?
Hi Everyone,
Am I the only MetaStock user that feels that fundamentals are an important
factor in selecting a stock to invest in?
MetaStock has a great user interface for doing technical analysis, but it
seems to me that it's missing at least half (if not more) of the equation.
I feel that based upon my (admittedly limited) experience, there are many
more factors that influence the direction of a stock. I've read in IBD in
AIQ's TradingExpert add that the following determine the price pattern of
stocks: "49% is due to the industry, 31% to the market and only 20% to the
company itself." I'm not sure of the exact percentages, but from what I've
be able to see, that seems VERY accurate to me. If this is indeed true,
wouldn't one be wise to take a look at these other factors in making their
investments?
Why don't I just buy AIQ's Trading Expert? Because I think that MetaStock
is a more solid program and would add the following features would be the
best "all around" program.
Not taking a companies financial situation into consideration seems kinda
foolish. MetaStock is the only software that I've seen that doesn't have
ANY provision for fundamental data.
If I'm off base here I'm sure that someone will let me know, but this is
what I've seen in the past. It seems like the market itself and to a
greater extent the groups/sectors act like the tide. When the tide comes in
(bullish) it seems like the stocks are like boats and most rise with it.
When the tide goes out (a particular sector cools off) it lowers the boats
as well. Obviously the market is bullish right now, but you can take a look
at different sectors and find that money seems to "move into" some while
"out of" others depending on what the particular "flavor of the
day/week/month" is. Please understand that I realize that this is a GROSS
generalization, and that there are MANY exceptions, but this is just one
guys observation. I'd like to hear from others if they agree/disagree with
this and what your rational is.
Haven't we all had a position with a particular stock, and one of the "big
boys" in that sector reports poor earnings and as a result, your position
is affected, even though it is a different company? The only thing that
they have in common is the particular industry.
Having said all of that, would anyone besides myself like to see a feature
in MetaStock that would be able to find the hot group/sectors (by doing
sector composites and breadth analysis), then once these are determined be
able to winnow down a short list of companies with good solid fundamentals?
Once that is done, you can go through all the technical indicator stuff to
try out your different scenarios on this more specific list.
I'd love to hear from all with an opinion on this.
Joel
beck@xxxxxxxxxxxxxx
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