Forum Archive Index - May 2001

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

>
> I stumbled across this very good article comparing fundamental and
> technical analysis. The conclusion? A hybrid system is best. Use
> both.
> http://www.marketmasters.com.au/articles/article_fundamentalanalysis
> .html 
> 
Well, I have to admit -recently- that I use a crude form of charting 
when buying shares locally, looking for double bottoms and double 
tops on the 'Stockwatch' chart when putting in my 'buy' and 'sell' 
prices  (I almost never put in an order at market).

So personally I wouldn't disagree too much with the idea of using 
fundamentals to select your shares and technical signals to pick the 
right buy/sell times.   But I remember buying into BHP not long after 
the 1987 crash.  The price was floating around $6-$8 from memory.   I 
bought in at $6.60, but 12 years on, and with the share trading at 
over $22, I wouldn't have been too upset at having to pay $8 (the top 
of the trading range) way back then.

I think part of the attraction of charting is that people (myself 
included) like to buy what they see as a bargain, and snaring 
something at the bottom of a trading range makes them feel good.   
But looking longer term, (as per my example above), I'm not sure if 
it really matters that much, from a investor's point of view. SNOOPY


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