Saturday, June 25, 2016

What analysis are we using?

Morning ... Saturday ... will update the funds report (over-due) as we are going into end of June.

Also ... need to update details for the e-learning (still needing few to start. Contact me).

It is difficult to think straight ... to be logical when market at chaos. For one, the Brexit created many stories ... from the collapse of EU itself ... to the recovery of the UK, in power in future.

Everyone seems to be an analyst ... having their own opinions, based on what they have read. Confusing, right? Yes ... be VERY confused.

To reduce that, stop reading from media. Let it go .. we will never understand that, right? Focus in our own portfolios or things we are doing right now ... for me, blogging. haha.

Oh yes ... I do think UK will be stronger by choosing Brexit. I will if I have to vote. EU is dragging on ... politically and economically drained. So ... we shall see the RISE of UK ... was thinking if I should be changing some cash into british-pound? MYR weakening too, anyway.

Let it go ... go jalan-jalan.

It has been ages since I last heard of people arguing on FA vs TA ... because more and more so-called traders learnt FA ... and TA.

FA : To me, I knew very little about FA (PE, PB, NTA, RNAV, ROI, DCF, DY and such ... jargons) ... I do not hide and telling others I knew these. I read loads of it ... yes.  I used it as guide-line ... as NONE of these are so-called correctly pointing to us ... if the company is UNDER-valued during market correction or crash? But ... these are signals I use to drive in such a winding road ... to investing in stock-market.

TA : To me, I knew little about TA (RSI, MACD, Stoc, MA, MFI, BB, FR, OBV, ADX, VSA ... and such). I went for a trading-course to learn these ... spent hours reading many books!!

So ... due to my limited knowledge in FA ... and little knowledge in TA ... I m building up strategies, in the preparation of market up-coming market crash. Very little ... I m not being humble, but stating FACTS. I do not care what others seen me ... being humble or boastful. I do care to share with others ... SOME truth.

So ... you knew about FA ... ok, ok. You are an analyst of an IB. Great ... I do respect most IBs as they are highly paid and they must have been one of top-students, graduated from respectable Uni. But ... why analysts made MANY bad-calls on the reports and those target-prices seem to be 'unrealistic'?

I am in favour of FA ... as I do believe that lousy losing money companies will be used to goring and benefit the major shareholders and/or some operators. If one is fully trade using TA ... ignoring FA, one might get caught when there is a huge sell-down. Of coz, we place a cut-loss where we assumed to be DISCIPLINE to cut-loss.

TA ... didn't give us a strong conviction in buying HUGELY in a stock due to the position-sizing and RRR calculation. Many of the times, it fails to hit our target-price and coming down ... it takes years of experiences for me to understand that ... if you trade in-out, you will only earn peanuts due to 'small' position size.

If one is to sai-lang any stocks what moving higher ... earn hugely and put trailing stop, it sounds to be most logical thing to do ... for traders. That is in THEORY ... as most technical traders(if they are really good, they will not be trading KLSE, ok? Go to trade oil, gold, indices ... higher leveraging there!) are not as mechanical as they should.

Bear with me ... whether one from FA or TA ... take everything we read with a pinch-of-salt.

Pause and think.

If we buy a stock with PER at 4, is that under-valued? By the way, most China-stocks trading in KLSE are of lowest PE value ... or go to HKSE, we could find many blue-chips trading at single digit PE. So ... PE is not the way we value stocks, ok?

If we buy a stock due to breakout ... do you see them as over-bought? Buy high and sell high, right? Yeah right ... easier said than done ...

Add the FA and TA ... the best of combo... but that will still be VERY lacking. I don't know about others ... I do know I have very shallow knowledge of FA and TA, so .... please never call me a sifu, ok?

I m learning NA ... news analysis. Stocks move due to publicity, hot in forums or media ... example how they pushed IFCA up by writing about its biz-model and related IFCA to large property-companies in China ... and Malaysia. Great news story-telling back then to move it up way beyond logic. While those TA-kaki ... might trade on breakout, FA kaki will not touch.

Combine FA + TA + NA ... could we find the formula then?

Unfortunately, market is too complex to simple put figures in it. Check how those export-oriented stocks being PUSHED up way beyond their fundamentals... and the trend, technically speaking is over. NA? Yes ... we need more news to come in .. example : due to Brexit, MYR will be down vs USD ... so, the USD play again.

How about it is biz-model ... that is biz-analysis, BA. To analyse that ... we need to have a qualitative checking on the management (how do you know that CEO could drive the company further?) ... right sector ... prudent and competitive models?

Now we have FA + TA + BA + NA ... I will like to re-write the order ... BA + FA + TA + NA + ...

This is part of my preparation of market-crash. I will recommend reading of DYNAQUEST (a catalogue of listed companies, with brief FA ratios) ....

Yes, biz-moat ... the reputable management. That is BA for you ... which I read a lot, but being not a biz-man, I have lacking in understanding how some biz could be doing so well while others fizzled off and tutup-kedai.

Adding in punting analysis ... PA. After all those so-called traders or investors in stock-markets, basically are punters too. Including me, of coz.

Punting or gambling ... came from lacking of BA + FA + TA + NA ... just buy due to hearsay or some recommendations ... one day, win-win ... happy. Next day ...losing ... blame the tips-givers!!

BA + FA + TA + NA + PA ... there you are. Looks too complicated now if we are to learn bits here and there. Using my 8 years (very short experiences) in markets ... it is MORE than all I have read, done ... and I do not think so I could ever reach 20% of any of these in my understanding ...

20% of each ... we have 100% then. Haha.

Logic analysis ... called it LA is very important in stock-market as it doesn't make senses.

Emotional analysis ... or psychological sense ... EA ... analysing on human behaviours or the studies of behaviourial-finance ... why human are not rational when face with their fear-greed.

Now ... Analysis = BA + FA + TA + EA + LA + NA + PA ... wow. The list is getting longer now.

Yet ... many still arguing about FA vs TA ..endlessly trying to PROMOTE their courses, softwares and such. If the systems work so so well ... are they VERY rich by now? Hmm ... think needs LA.

If one is to check forums ... many are emotional when they are winning or losing. Markets play on GREED and FEAR. Understand that could make us ... avoiding the crowd. It is called HERD mentality. Read that? I have written about all these analysis ... too many of times.

But ... again, there is no right or wrong. The person who takes time to understand how the GAME is being played ... learning from the bad-experiences and know the rules will prevail. They will be wiser ... or perhaps, disappear ,... quit in regret.

I am a NOVICE ... take it from me. I am too small and humble by markets. Many of times, I am being punished. Yet ... one day, I will be wiser .. to share experiences to many retailers and newbies out there.

Don't worry ... there will always be greater fools around to believe they could beat the markets, beat the syndicates and ... some system works wonder. They will be disappear when crash.

While waiting for that ... have a nice weekend. I could have written in greater details, but ... I have to run again.

Hope the above will give little insight of what analysis we need. Use whatever works for you ...

Comment : Leave comment HERE (click ) and not in i3. I do not go to i3 or tradesignum forums anymore). Thanks Edmond of TS to leave some comments. I will reply you in a blog-form.


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