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I come down hard on fundamentals because I have never seen a correlation
between any of its measures, I am aware of, that provides an entry/exit for
optimal gains. The story/news is produced nearly all the time by people with
an agenda. The crowd psychology with its millions of variables is too much
for this mortal. The people who sold MSFT today had their reasons as did the
buyers. I can't outguess my wife's reactions much less those of the world.
What I have left is the results of any and all variables playing in the
market - Price. If I measure its movement, I might see how fast Price is
going and in what direction (momentum). I can determine what's normal and
what is pushing to the edges of the expected results based on the past
(overextended by move). We use math throughout our lives, why not on Price
and Volume?
A balance sheet gives me little insight into where price (who's movement
makes me money) will go. Product/news/sector/earnings/etc. do not give me a
point to buy or sell. It becomes a guessing game. Take the simplest TA tool,
the moving average, by looking at it, I can tell if people are willing to
pay more or less for a stock then they have over an average of the last X
days. Why they are doing that might have a "fundamental" reason but I can
only guess not measure. If I decide it is the new product, when do I sell?
The product is in place. Do I wait for that product to leave inventory?
That isn't logical or objective. As it isn't logical to buy based on a
future you can't predict. while price can't go down beyond my limits without
passing through that moving average.
The talking heads give us reasons for every move. Asia falling apart? you
wouldn't have been in the market for years if that was a mover. How will it
be explained when we hit 10,000? The interest rate fear used once a month
or so? What about earnings estimates? the market may or not react to
filings. When we have a reaction to an above or below estimates, what does
that tell us? especially since they are wrong 75% of time. Do the analysts
have an agenda or do they just do a bad job? How much over or under calls
for a buy or sell?
It is easy to say "Fundamentals+Sentiment = Price+Actions explained and
expressed in trends", there is no objective way to measure Fundamentals. And
the measure of Sentiment is a TA measure. So, TA covers 3 out of 4
components. Cave men would see the sun rise and contemplate why it happened
and they made up all sorts of stories, but the real smart ones measured the
day and night and gave us seasons and calendars.
Richard Estes
-----Original Message-----
From: John Sellers <ay286@xxxxxxxx>
To: 'metastock@xxxxxxxxxxxxx' <metastock@xxxxxxxxxxxxx>
Date: Friday, July 31, 1998 2:43 PM
Subject: RE: Cool Website
Well written. Would mention that based on the past short term if one can
formulate a system of trading that produces a winning paper result which
should comprise many more winning trades than losing ones in money terms. It
then may be extrapolated into the future assuming conditions have not
changed much and real profits may be produced.
Many may that but that is based on the past history but known past data is
all we have to work with.
John Sellers
Torrance, CA
USA
-----Original Message-----
From: A.J. Maas [SMTP:anthmaas@xxxxxx]
Sent: Friday, July 31, 1998 2:09 AM
To: metastock@xxxxxxxxxxxxx
Subject: Re: Cool Website
>Calling the market is beyond anyone's capability on an intermediate or long
>time basis, especially if you use the smoke and mirrors of funnymentals to
>explain price/market action. The only facts we have are price,
>time and volume, the rest is opinion
Facts are:
Fundamentals+Sentiment = Price+Actions explained and expressed in trends
Both components can be brought to you via News and/or be discovered by
inspecting their
internals using both TA and FA systems. With the emphasis put on the
"reading" of each
components single or combined and in conjunction with the use of special
analysis filters then
helps to explain any 'whys' outcomes in past, present and in future.
Neither of these analyse systems is perfect, combined just about are as much
as can be desired.
Predictions and estimates can be made on both historical and future
estimated figures, data and
outlook, but present presentations of the halve year results have again
proven these to be naturaly
imperfect, with as outcome that prices of several companies shares
publishing negative news in
halve year results and futher 1998/future outlook were wrongly estimated in
the first place and as
such some of the their share prices have dropped dramatically, others where
left stable and on the
other hand some others with few or very possitive news and forecasts were
able to gain upwards.
For these results only the single companies accounting departments have the
key, temperarely
hidden behind companies doors until they are published.
Neither systems are in this case the perfect right predictor, in fact they
are only able to guess as
to what the outcomes might be and as such also frequently supprise both
analists and markets,
one of the reasons why the markets and price are not always right and move
up or down in time
as they have done and will continue to do.
Market's prices are always the fundamentals with the sentiment as trends
added and i.e. at the
time of results publishing, the major factors to be reckonned with.
Ignoring either one will have great effect on the creation of succesfull
results, aside from using
the wrong sources, systems and filters, not withletting the fact that one
can be succesfull using
only a single one of the components, as has been historicaly proven. Asian
and European
markets have used these in a wide variaty since the 16th century(1500+) when
regular trading
started, first as the open markets and later as indoors fairs, auctions,
bourses, exchanges etc.
As much as there are old hat FA analysts not letting modern wisdom and
technology into their
analytical world, there are also TA analysts ignorant to the established
history and science.
Whatever sytems used, single or combined, all can be succesfull but will
mainly depend on ones
skills, expertise and ferm stands towards implementing and applying them.
Knowledge and experience can be established with study and practise.
Disapointments for one
does not nessaceraly mean a disapointment for others.
Ignorence is then irrelevent and not the question.
Regards,
Ton Maas
Ms-IRB@xxxxxxxxx
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