FA v TA

[ProRick]

Which method do you use? If a combination, how do you utilise them?

 

[wahkao3]

i ish combine them both

both say buy, then i buy

 

[ProRick]

i ish combine them both

both say buy, then i buy

What do you rely on for TA (EW, fibonacci etc) and FA? Which software do you use for TA?

 

[OddEye]

Both too. But I am geared towards FA though

 

[wahkao3]

What do you rely on for TA (EW, fibonacci etc) and FA? Which software do you use for TA?

I dont do EW or fibo. I think fibo is one of the dumbest indicator around.


TA I rely on my own high probability setup

FA I rely on value investing close to warren buffet style, but much less stringent

 

[coolhead]

I'm more experienced in FA than ta. What I'll do is that I'll assign a rating to each FA and ta for a stock. Eg, the rating can be buy/hold/sell.
if FA and ta indicates buy, of coz I'll buy.
if FA indicates buy and ta indicates hold/sell, I'll wait for a short while.
I dun ever buy if FA is not good, regardless of how good ta is.

 

[wahkao3]

I'm more experienced in FA than ta. What I'll do is that I'll assign a rating to each FA and ta for a stock. Eg, the rating can be buy/hold/sell.
if FA and ta indicates buy, of coz I'll buy.
if FA indicates buy and ta indicates hold/sell, I'll wait for a short while.
I dun ever buy if FA is not good, regardless of how good ta is.

what are the criteria of the rating?

 

[coolhead]

what are the criteria of the rating?

criteria is not firm but an approximation. There are 2 factors I look at to decide on a personal FA rating for a stock
1) the performance of FA indicators spanning over 3 years of annual report and 4 of the most recent quarterly reports. The quality of FA should show a general uptrend.

2) the relative performance of an FA stock compared to its peers. Eg, in local context you would compare starhub, m1, singtel.

for the above 2 factors, I use the following: p/e, p/e ttm, p/s ratio, debt to asset ratio, revenue, operating cost and profit. For Almost bankrupt companies, I look at p/b, debt to asset.

leaving Charles de Gaul airport now. Will continue later.

 

[victorlht88]

Some firms can't be evaluated fundamentally though cause they are trading at high p/e or way above nav also. Trading based on sentiments is kinda hard to evaluate though

 

[simon_84]

with hardly any time to do research, my preference is more towards TA.

FA wise, i tend to look at blogs instead...such as:

A Path to Forever Financial Freedom (3Fs)

the DW blog i think most should know, so don't need to paste his link here.

 

[ProRick]

I rely on TA for the majority of my trades. FA for the long term investments.

 

[sAVaGEmP5]

Obviously u guys dun read my posts.. had been answered and IMO is the best answer

 

[athulican]

FA: choose the right one
TA: fire at the right time

 

[avalonie]

FA: choose the right one
TA: fire at the right time

Yes. I agree.
Will base on FA analysis what stocks to buy among others.
And base on TA analysis to decided when to buy.

 

[sAVaGEmP5]

bingo... but ppl will counter and argue, in 2050s still same qns popping up. Thats the most magical thing abt markets.

Just like ppl sell when prices go down and buy when prices go up.

 

[sAVaGEmP5]

criteria is not firm but an approximation. There are 2 factors I look at to decide on a personal FA rating for a stock
1) the performance of FA indicators spanning over 3 years of annual report and 4 of the most recent quarterly reports. The quality of FA should show a general uptrend.

2) the relative performance of an FA stock compared to its peers. Eg, in local context you would compare starhub, m1, singtel.

for the above 2 factors, I use the following: p/e, p/e ttm, p/s ratio, debt to asset ratio, revenue, operating cost and profit. For Almost bankrupt companies, I look at p/b, debt to asset.

leaving Charles de Gaul airport now. Will continue later.

Reports and company FA only updates once every 3 months. So does it means the prices will only change once every 3 months ? I doubt so.

The report you read are stats and figures compiled even before the report is out. Which means we could have bought/(sold) before the report is out then.

And if a company had a very good FA for the past 12 earning seasons, does it mean u buy and buy and buy every day until a new FA report is out ?

 

[coolhead]

Reports and company FA only updates once every 3 months. So does it means the prices will only change once every 3 months ? I doubt so.

Prices change everyday. A stock does not do a complete turnaround in the span of 3 - 6 months. If there is an overhaul in the company's direction and/or management, it will take at least 1-2 years for progress to be shown in the quarterly reports.

The report you read are stats and figures compiled even before the report is out. Which means we could have bought/(sold) before the report is out then.

Yes.

And if a company had a very good FA for the past 12 earning seasons, does it mean u buy and buy and buy every day until a new FA report is out ?

Unfortunately, I do not buy companies with very good FA (indicating they may have peaked out in terms of growth potential. As a few have mentioned, FA only indicates the direction which you should buy / sell. TA will tell you when to buy/sell. Hence, for an investor to just buy everyday, it would incur alot of commission charges and is impractical. TA will tell me when to buy.

As I do not buy companies with good FA, i focus on companies with bad FA but with a change in direction which I believe in. Stocks with consistently good FA are out for me as they generally have higher P/E based on future growth potential already built into their share price. I believe most of their growth potential in share price is already lost. Generally, these are stocks which had fallen out of favour with the public, have bad sentiments but when peering deeper into the FA, things do not look so bad. These stocks generally have fallen about 90-95% of their value.
All the stocks which I was successful in include Nokia and NBG. However, as I feel that they have reached their growth potential in terms of future earnings, I have dropped them. NBG is still in my watchlist pending a debt haircut by the Greek Govt on Greece govt bonds, more stable political outlook after Greece Local elections in May '14 and an inevitable Bank recapitalization again. My recent FA analysis has pointed me to Nu Skin where it has dropped 50% in less than a month and ridiculously oversold no matter how I looked at it.

Only started this strategy in late 2012 but I'll say quite good so far

10 chars..........

 

[coolhead]

Take Nokia for example, its peers would be BlackBerry, HTC, Apple, Samsung. These are the big main competitors at that point of time. I had written off BlackBerry in 2012. HTC did not have any competitive advantage to begin with. Apple and Samsung had most of its growth potential realized. Nokia was beaten down heavily on restructuring fees but had a partnership with MSFT with quarterly payouts, strong competitive advantages in Windows Phone OS, one of the most profitable IP patents for mobile network/phones.

I bet many in 2012 would have written off Nokia as a bankrupt company. But it has risen from USD1.69 to a high of USD 8.2 a month ago. I bought in at USD 2.74 and sold off gradually with all my shares sold at USD 7.92.

I believe one of the main factors in stock picking, apart from FA (Which everyone is able to study) is your ability to have foresight in future direction of the company. Its a skill that can be honed and will gradually lead to easier stock picking as u become more experienced.

 

[wahkao3]

Obviously u guys dun read my posts.. had been answered and IMO is the best answer

can post those posts here?

 

[wahkao3]

I believe one of the main factors in stock picking, apart from FA (Which everyone is able to study) is your ability to have foresight in future direction of the company. Its a skill that can be honed and will gradually lead to easier stock picking as u become more experienced.

yep, could not agree more.
FA, financial analysis is easy.

Foresight is the tough one.

You have really good foresight and being able to see Nokia rise up from $2 to $7