kcchongnz blog
FA Vs TA, An email to my course participants: kcchongnz
Dear course participants. We discuss about FA and TA today as we haven’t done that before. How can I miss this topic?
Technical analysis (TA) and fundamental analysis (FA) are the two main schools of thought when buying or selling shares. Technical analysis looks at the price movement of shares and uses it to predict its future price movements. Fundamental analysis looks at economic and company specific factors as you have learned.
Fundamental analysis used to be the only investment method but that has changed as the advent of high-speed computing has made technical analysis easier and more widely available. Many large investment firms are making their trading decisions based on computer algorithms.
As a student of finance and investment study, I used to think strongly, like many others do, that technical analysis is about as useful as voodoo for helping you figure out the best investments. I used to read the blog by Alex Lu, one of the most popular TA blogs. I found him very good as not only he is good in TA, he is also very well verse in FA. Once I commented about his use of TA in a stock selection, he replied me warmly.
“KC, ignore TA at your own peril”. I thanked him for that advice. I took it as a risk protection measure, and careful about a stock when goes down trending, rather than trying to win big searching for a big winner using TA. This is because I have my investment philosophy of:
“Taking care of the downside, and let the upside takes care of itself”.
I have also got a good e-friend, Ben Gan. He is actually from the same kampong as mine. No, I from kampong, he from the town. He is a good FA guy, and he uses TA too and he is very successful. Another TA guy is matrixcool in i3investor, I believe he did very well too. My friend CFTrader and I believe some of you also did well combining FA and TA, or even TA or FA alone. Of course not forgetting my friend, Ooi Teik Bee, not sure he still consider me as his friend as he said I have a small heart. You can see his excellent trading records in i3investor.
Most remisiers are using TA, I believe. Many of the largest market players are making their trading decisions based on computer algorithms, i.e. TA. TA could now be the major decision maker now.
So the same thing here, as you participate in my course, my advice to you is you may comment in a constructive manner, you may get “hantam” but the feedback will enlighten you. Don’t get upset with whatever comments by others, like just because someone tells you there may be something wrong with the stock you have. Sometimes the language used may be a liitle strong just to bring forward a point. And every one of us is human and sometimes unknowingly offends. You will learn more and it is good for you. You may avoid great loss in the future, maybe. So do not stick together like a cult, it is not good. Be independent in thinking. Confirmation bias is very dangerous in investing.
But one thing I must let you know, many of us don’t know enough to make strong criticisms that TA does not work, and never engage in any name calling, nor taking any sarcastic swipes. But we are human, sometimes this thing does happen. We just have to accept it with an open mind.
The comment below is a very good comment and almost sums up all I want to say about FA and TA.
[Posted by NOBY > Jun 6, 2015 10:46 PM | Report Abuse 
It depends on the time horizon. FA alone can work but maybe not in the short term. Sound fundamental investing techniques will work out in the long term. We have so many examples of successful fund managers using FA methods. I have not heard about Seth Klarman, Joel Greeblatt or Warren Buffett looking at charts before they make their purchase.
Personally, when I first started embarking on investment, I tried learning TA and it just wasn't right for someone like me who can’t be staring at the screen all day to cut loss, buy on break -out, bullish divergence etc. Frankly speaking it was damn stressful.
And then I learnt the FA method and it just rang all the right bells in my head. It was simple to understand, intuitive and logical way of investing, looking at companies as business with intrinsic values attached to it. It was a method I could apply without having to spend too much time and too much stress.
I’m not saying that TA is not good, but it was just my personal experience. I know that my performance may not be as good as those who use TA or buy only up trending stocks, but at least I believe that in the long run, things will work out for me.]
I too have lost some money in 1993 and 1994 trying to use charts, that time we used hand drawn charts. I remember a few of them even after more than 20 years, Sriwani-w, Midf-w, etc which I have lost considerable amount of money. My friends who thought he was very good in that, after making a lot before that, also lost his underwear.
With that little experience and realizing that most remisiers, fund managers and investment bankers also using that with their huge resources and computer power, not forgetting the rich, syndicates and insiders are everywhere in Bursa, I stay away from there, and play my game in my playing field according to my rules. That is for me and I don’t ask you to do so.
And remember, life is not all about winning. It is also about humility and caring; caring for our next generation not like what happen in 1MDB with the huge debts. Caring such that you don’t get caught like many in 1998. If it happens to individual young person because of losing big in leverage in investing is even worse. It is hard for you to get up again. One can use margin if you wish to, it is your choice, but don’t convey the wrong message to the young generation. As far as this principle is concerned, I can’t compromise, and can’t sit still about it.
Sayonara FA?
The argument here is this statement.
"To be successful in stock market, FA alone will not work.”
This was posted in one of my threads. Sorry this is posted without malice, but just for discussion.
[Posted by Ooi Teik Bee > Jun 6, 2015 09:58 PM | Report Abuse
http://klse.i3investor.com/blogs/kianweiaritcles/68226.jsp
http://klse.i3investor.com/servlets/pfs/41947.jsp
Let the readers here be the judge, not your words or my words.]
The second link above is of course OTB’s challenge portfolio which returns 51% since the beginning of the year. See I agree TA works, I have never said TA never works. In fact many people wrote to me asking me to give stock picks and I referred them to OTB, knowing that OTB can help them, not me. I don’t give tips. I have no tips. I only teach fundamentals in investing. You learn and you decide yourself, not me. I do write about stocks though, but you can also see some of my recent stock picks don’t move, or even went down with the market.
What about the first link above? It was put up by Tan KW, isn’t it? See the “kianweiarticles”? Thanks Tan KW for putting up again, and also OTB for doing so. I am actually quite proud of my portfolio this six months as it did quite well, even for a short duration, which is not supposed to do so. Bear in mind, this portfolio was actually “collected” from “eliminations” of the stocks in my previous three portfolios published in i3investor, and not specially picked for any challenge. The reasons why I eliminated some of the stocks were all written in great details in the links in the link above merely for sharing the reasons why I sold some of the shares. Did I go into the challenge? Can a challenge in a 6-month of one year period show how great an investor is?
For a well-diversified portfolio of 24 stocks, it returned 17.81% against a loss of 0.7% of the broad market. They were 7 losses, or less than one third, with the biggest one for a company warrant of BIMB at 15%. Others are mainly single digit losses. There are a number of big gainers, Prestariang (81%), Latitude (72%, no I didn’t follow anybody as you can see in my thread on furniture companies, I wrote about it long time ago when its price was RM1ish), Tasco (47%), ECS (44%), Magni (29%), Perak Corp (24%), Willow (22%). Not bad, isn’t it. But more importantly, there are few losers and the loss is small. Again remember the principle of investing? Heads I win, Tails I don’t lose much. That is the essence of fundamental value investing.
Looking at it if I were to choose these few stocks to be in a challenged portfolio, my return will be close to the second portfolio. Sorry, just kidding, fundamental value investing care about diversifications, not 24 stocks, may be just 10 for small retail investors like me. And no matter how I choose, even retrospectively, I can’t get close to OTB’s portfolio return. His is amazing. But I am happy with mine.
So my course participants in my course, don’t abandon from my course, FA does work, even alone. I expect it to work in the long-term, it also works in the short-term, surprisingly. I know you find the last part in discount cash flow analysis tough, and may not suit your taste, but you have many other clubs in your bag to use. Of course you can enhance your outcome with TA, go ahead and learn from OTB, but my opinion is you should place FA first, then check with TA. Just my opinion.
FA Vs TA in a longer term
As a fundamental investor, I like to follow this principle below:
“Investing should be more like watching paint dry or watching grass grows. If you want excitement, take $800 and go to Las Vegas.” – Paul Samuelson
Sorry for hearing I saying this again and again as this is important, as this stressed the importance of a principle.
“People can't live with change if there's not a changeless core inside them.”
― Stephen R. Covey, The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change
I have recently posted an article on the return of the longest portfolio in this thread:
http://klse.i3investor.com/servlets/forum/600078049.jsp
“Does fundamental value investing not work? kcchongnz”
There was another portfolio posted at the same time as a “challenge” for stock selection for first half of 2013. Just two of us, me and OTB. These were posted actually by Tan KW for fun and sharing purpose, and not so much as a challenge, but for sharing and fun. Remember, investing is for building wealth for the long term, not challenge with others how much each make? But just to counter this statement:
"To be successful in stock market, FA alone will not work.”
The link is appended as below and it uses TA:
http://klse.i3investor.com/servlets/pfs/12952.jsp
The return of stocks in the link has not adjusted for any corporate exercises and dividends, and so I did it like what I have done for my own portfolio using the adjusted prices from Yahoo Finance. I hope I did not make any major mistakes. The return of this portfolio is shown in Table 1 in Appendix below.
The portfolio returned 68.2%, very good for a period of two and a half years as compared to 12% of the broad market during the same period, in my standard. There are two losers, the same as mine; Benalec (-50.4%), and Alam (-25.3%). Not bad at all, as in investment it is full of uncertainties, and nobody can get 100% right all the time.
No one is perfect: Michael Jordan, the game’s greatest player of all time, shot just a bit over 80% from the line over his career. Chances are, you are not the Michael Jordan of the investing world.
It is not about who beating who, but this is about this statement:
"To be successful in stock market, FA alone will not work.”
Table 2 is the result of the portfolio of mine put up by Tan KW. So you can see fundamental investing did work too, if not better, and seems to be with less risk. But I can also tell you one thing. It could be lucky also because the market happened to be good during this period, and two and a half years is really short for a long-term investor. So it is best to have some humility, especially in investing.
Incidentally Tan KW put up our next portfolios again as on 1st August 2013. For these portfolios, I using FA and OTB using TA have written articles to explain in detail why we have chosen our stocks. I think for a number of stocks I have even carried discount cash flow analysis besides the use of Magic Formula in investing by Joel Greenblatt, and one or two on Graham net net. The analysis are all in the links below:
http://klse.i3investor.com/blogs/stock_pick_challenge_2013_2h/blidx.jsp
I was hoping I could get constructive criticisms to improve my analysis, for I belief there were many shortcomings in my analysis and assumptions. Again they are for sharing of knowledge, and not really for competition. I think I have mentioned there somewhere and both of us understood it well.
Table 3 and Table 4 tabulated the return of our portfolio after about two years now using the adjusted prices in Yahoo Finance. I hope I didn’t make any mistakes. Again you can see FA does work, and it works very well indeed. TA also works as well.
So with that I want to tell you that FA works, and it also works well even alone. Go and enhance your knowledge with TA. Remember the article I posted on “Buying bargains on the move”? How Pprofessor Josef Lakonishok enhanced the return of his funds by leaps and bounds by using some simple TA tools?
With that I hope you continue to spend some time and effort to learn about this fascinating FA. Don’t quit and continue to learn. In this world, nothing achieves without some effort.
Happy learning.
K C Chong
ckc14invest@gmail.com
(7th June 2015)
Table 1: OTB portfolio
Table 2: My portfolio
Table 3: My second portfolio
Table 4: OTB second portfolio
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Discussions
3 people like this. Showing 50 of 51 comments
I think by this time, most long term investors will be able to see and appreciate KC's efforts in generously sharing his views on value investing. From Day 1, there has never been any recommendation for calls to buy or sell. For those who are under his guidance, I am sure you would reap immense benefits. Do your own assessment.
2015-06-07 18:29
Hi All,
Thanks KC and Mr OTB on the contributions you have given.
My views are as follows:
FA was largely made known by Ben Graham, who bought shares significantly below their intrinsic value (until it creates a margin of safety). He did pretty well in investing during his time. This was, however, cheap investments made regardless of the quality of the company. The flaw for this strategy was that most low quality companies never reached its intrinsic value.
Now, his pupil – Mr Buffet understood that and that took it further. Together with his partners Mr. Munger, they developed a strategy for long term investing. This is where the famous quote of Mr. Buffet comes in “The best time to buy is whenever you have money; and the best time to sell is never.” They worked the magic of compounding interest, even though several of their holdings have way exceeded their intrinsic value.
History has it in stone carved that FA works. Just look at way back even before TA was invented during the time Wall Street was firstly set-up – during the time of the industrial revolution. Investors at that time have prospered using prehistoric FA style alone, for e.g. Mr. Rockerfeller.
More on KC’s elaboration on TA above: “TA looks at price movement of shares and uses it to predict its future movements”. TA is created hugely based on behavioural finance, like how we study plant/ animal movements. It is the same concept.
This is where it gets interesting as to why FA works? Having known that TA uses a lot on behavioural finance to predict human behaviour, we can safely say that a strong company with excellent fundamentals has a higher probability to do well as compared to their competitors (some call this economic moat). Also, the main reason behind it is the company culture and management. Those in the working level would clearly understand this point – it is very hard to change company culture. For example: ask a coffee person – coffee or tea?
I believe the main key difference between FA and TA is the exit strategy. FA users do not exit their investments so easily even though the market is volatile. I believe TA, on the other hand, rides the tide and exit based on some technical indicator. Since there is no capital gains are not taxed in Malaysia, the question boils down to “how much commissions/fees have been paid?”
Also, please note for those purely using TA blindly (without any bit of FA):
People who are/ have been in the investment banking industry clearly knows that any TA/ break out/ break down point can be created through intense marketing especially for the share market (not so much on the futures market).
2015-06-07 19:40
- 冷眼 -
股票市场其实是一个江湖，江湖中的好汉，各显神通，在这湖里争金夺银，他们用来克敌致胜的方法，其实就是一种武器，在江湖的打斗中，难免腥风血雨，在股市这个江湖中，却是夺人财富，但兵不血刃，杀伤力之大，不在真刀真枪的江湖之下。
武林中所用的是十八般武器，股市江湖中所用的价值投资法、基本面法、图表、动力趋势法（Momentum）、投机、取巧、对敲、谣言诱敌、放假消息、求签、拜神、风水，甚至有人以太空梭的发射原理来预测股市趋势，所有这些方法归纳起来，只不过是藉以达到赚钱目标的武器。
方法（武器）花样这么多，究竟那一种方法最有把握？那一种最管用？
十八般武器，每一种都有其长处与短处。世上根本没有十全十美的武器，否则的话，所有的人都会采用该种武器，其他武器就自然而然的被淘汰了。至今十八般武器都仍存在，这一事实就说明了每一种武器都有可取之处。
但在股市这个江湖中，情况就不一样，尽管方法百出，而且不断的推陈出新，但能够经得起时间的考验、历百年而不衰的方法却不多。许多新的方法在开始阶级，都有特出的表现，但都如昙花一现，经过一段时间，就消声匿迹，再也没有人提起，至今硕果仅存，历久弥新的，也不过寥寥数种，而其中荦荦大端者，不外是基本面派和图表派。
究竟那一种方法最管用？其实视个人而定。就好像那一种武器最犀利，在很大的程度上取决於应用武器的人，以及他的功力的深浅。
在股市中人，每个的背景、所处的环境、教育程度、财力状况、个性、人性观、性格倾向、理财理念、风险承受程度、各各不同，投资方式，也就因人而异。适用于甲的，未必适用於乙，适用於中年人的，未必适用於青年人，所以，股票必须由自己去选，别人不能代你选，因为只有你自己才知道你所要的是怎么样的股票，别人越俎代庖，多数帮不上忙。
在三国演义中，即使是刘备、关羽、张飞这三个结义兄弟，所用武器亦各异。刘备用的是双股剑，关羽用的是八十二斤重的青龙偃月刀，而张飞用的是丈八点钢矛。很明显的，都是配合他们的体力而打造的，这样才能在“三英战吕布”的这场惊天动地的厮杀中，配合得天衣无缝。
同样的，在股市中，你必须检讨你自己，了解你自己的个性、财力状况、处事作风、风险承担程度等等，然后据此制订最适合你采用的投资方法。如果你的方法，长期为你创造财富，就证明你已选对方法，走对了路，就应该择善而固执，坚持下去，不可见此山望那山，中途改弦易辙。
http://klse.i3investor.com/blogs/newcoldeye/17350.jsp
2015-06-07 22:19
FA and TA are not difficult to learn and use
Self ego is more difficult to subside
Both so called Sifu KC and OTB please beware
From the recent debate or argument we common investors
had learnt nothing but seeing two super gurus slaughtering
each other.
Your behaviour has told there is not real Sifu but
there is egoistic Sifu. Shame on you. Both of you.
2015-06-08 08:12
Am I wrong?
Please kindly enlighten me
Don't just flag
What I said is good for both Sifu to
reflect on their own self
With their skill and knowledge need not have to
cari makan here. They can win big money and respect
in share market. No problem . I believe they can.
2015-06-08 09:54
I total FA no TA
OTB also FA assisted by TA.
No right to say TA assisted by FA
Please do not make it so confusing
Or explain in detail how if otherwise
If not , don't play your cari makan trick here
2015-06-08 10:38
Dear pisanggoreng,
I hope you can understand English well. I did not say FA is not good. You can check with my subscribers, I will not recommend any stock to buy without fundamental.
I will not buy very good FA stock if the stock is a down trending stock. Hence I focus more on TA.
FA is not my sole stock selection criteria.
I do not want people here to twist my facts.
To win big in stock market, FA alone will not work. You need a combination of market psychology, TA, FA and sectors to focus.
I also use FA to invest, but it contribute only 25% of my total consideration. I focus more on TA.
If FA is very good, technical chart is a down trending stock, I will not buy this stock even the margin of safety is very high.
I am not a long term investor, I want high growth stock so that my ROI is very high in every year.
Thank you.
2015-06-08 10:59
you got to ask yourself, to qualified as a CFA. which is the highest mark in financial analysis and the requirement of all top banks and brokers in the job as analyst.
all they studied is FA, how come no TA. bcos TA can be fabricated by syndicate.
anyone with some money can fabricate a breakout chart. simple as that. and they are many big house will engineer a breakout to sell down. ie. K1.
so if you love to trade the next K1 stock, pls follow OTB.
2015-06-08 11:24
Brader optimus otb rekomen alot undervalue stocks lor... Appreciate his hard works lor..
2015-06-08 11:30
my question is, if he otb is so good, he would have been a billionaires now, and why he still want to come here charge a pathetic rm960 a year and fight with everyone to win subscriber?
he can do it for free, like optimus.
2015-06-08 11:37
http://klse.i3investor.com/servlets/pfs/41947.jsp
http://klse.i3investor.com/servlets/pfs/42840.jsp
Dear valued readers here,
Please compare the above portfolio, you know the answer.
Optimus can cheat all the people all the times. Talkcock portfolio is belong to him. Please assess his standard yourself.
Thank you.
2015-06-08 11:40
Posted by Ooi Teik Bee > Jun 8, 2015 11:40 AM | Report Abuse
http://klse.i3investor.com/servlets/pfs/41947.jsp
http://klse.i3investor.com/servlets/pfs/42840.jsp
Dear valued readers here,
Please compare the above portfolio, you know the answer.
Optimus can cheat all the people all the times. Talkcock portfolio is belong to him. Please assess his standard yourself.
Thank you.
Answer : I already knew my bro Optimus is using new id, talkcock! Guess OTB and the rest of forummers here also know this! Where to put your red face my bro!
2015-06-08 11:42
Agree with optimusprimer. Why must charge us RM 960 if he can make 50% return from stock market? He should be a multi-millionaire by now with his high return. Same also with KC Chong. He claim he has high return yet still want to charge people for his course.
2015-06-08 11:43
bro, give me 5!!!
Posted by optimuss1 > Jun 8, 2015 11:43 AM | Report Abuse
Agree with optimusprimer. Why must charge us RM 960 if he can make 50% return from stock market? He should be a multi-millionaire by now with his high return. Same also with KC Chong. He claim he has high return yet still want to charge people for his course.
2015-06-08 12:00
Those who always claim they make high return from stock market should emulate Mr Koon Yew Yin in giving charity not ask more money from i3 forummers.
2015-06-08 12:29
pisanggoreng,
First of all, I have in no way mentioned that I am a sifu or what.
Secondly debating an issue is a healthy thing to do. Don’t we like to see Tan Mahathir debating with Najib on 1MDB thingy to hear both sides of the stories? Not because we want to hear them throwing mud but to understand the issue.
In use of investing strategies, some also like to debate. But in this case, though debating is good, but I think it could be futile, because there is rarely any expert who is very good in both fields in this type of public forums. If they are good, they won’t waste their time in this type of public forum. So that includes me.
When people debate, it is not a matter of egoistic or not, but just trying to put forward their point of view, which I view is not a bad thing. Why do you think it is egoistic?
However, if you read the article/s, if you read it well, is about answering the question:
"To be successful in stock market, FA alone will not work.”
This type of statement is made everywhere. I am not talking about in i3investor only, it is everywhere. So it really doesn’t matter where I copied and pasted this statement. It is just a debating issue.
I believe more than 50% of stock market retail players don’t even know nor care about what FA or TA is, left alone if FA works alone. So it really doesn’t matter who makes this statement.
So I just try to show evidences that FA can work alone, in fact it has worked very well. The gentleman below also shows some concrete result.
“Posted by JT Yeo > Jun 7, 2015 12:00 PM | Report Abuse
If you can make money in the long term while minimising permanent loss of capital using coconut, fengshui, horoscope, zodiac or tarot then go ahead. But to say FA alone doesn't work, you are saying Warren Buffett, Guy Spier, Mohnish Pabrai, Peter Lynch, Walter Schloss, Howard Marks, Joel Greenblatt, David Einhorn, Bill Ackman, Eddie Lampert, management of Sequoia Fund, Tweedy Browne, Ruane Cunniff that they are all being lucky huh?
Maybe they are, Tweedy Browne has published an empirical studies titled "What Has Worked in Investing", please do publish your empirical studies and analysis to disprove their research.”
What is the problem of me or someone else to provide our view that FA dose work alone? Seriously I think it is very good for those not-so-savvy investors to let them know that something works in investing. Come follow it! Don’t you think so? We don’t simply say it.
We provide evidences. If you wish, I can even send you a copy of empirical evidence of
“What Has Worked in Investing" Tweedy Browne
That is the purpose of the argument, and hopeful a good guidance is provided. That is all. Don’t you think most retail investors do need some guidance in FA to invest wisely in the stock market?
Posted by pisanggoreng > Jun 8, 2015 08:12 AM | Report Abuse
FA and TA are not difficult to learn and use
Self ego is more difficult to subside
Both so called Sifu KC and OTB please beware
From the recent debate or argument we common investors
had learnt nothing but seeing two super gurus slaughtering
each other.
Your behaviour has told there is not real Sifu but
there is egoistic Sifu. Shame on you. Both of you.
2015-06-08 15:55
Optimus what cock u talking ? U have no right to criticize anybody performance. You are the worst type - rush in and out of penny stocks for petty profit and when things turned sour, u lose your pants
Still got guts to say OTB and KC no good ?
2015-06-08 16:00
THERE ARE 5 MATRIX TO CONSIDER WHEN INVESTING.THEY ARE
1.THE ECONOMY - WORLD,MALAYSIAN ECONOMY, ASIA ECONOMY,PLANTATION ECONOMY,
CONSTRUCTION AND PROPERTY ECONOMY AND SIMPLE ECONOMICS WILL DO...
2.SIMPLE APPRECIATION OF ACCOUNTS
3.FUNDAMENTAL ANALYSIS
4.TECHNICAL ANALYSIS
5.MANAGEMENT OF THE COMPANIES - THEIR ABILITY TO CREATE AND ADJUST IN THE FACE OF
CHANGING ECONOMIC SCENARIO.
6.PSYCHOLOGY OF MARKETS.
AS FOR MYSELF, I AM GRATEFUL TO ALL OF YOU SIFU WHO HAVE SHARED YOUR INVESTMENT THOUGHTS AND APPROACHES IN THIS FORUM, FOR WHICH I HAVE BENEFITED A LOT.WHETHER FA IS MORE CORRECT OR TA IS BETTER, IT DOES NOT REALLY MATTER.WHAT REALLY MATTERS IN THE END IS WHETHER WHATEVER THE METHOD, WE HAVE BECOME MORE SKILLFUL INVESTORS IN GROWING OUR HARD EARNED MONIES.
I HAVE APPROACHED INVESTMENT AS A BUSINESS, A LONG TERM BUSINESS.LIKE ALL BUSINESSES, THERE ARE UPS AND DOWNS . IN SO LONG, THE BUSINESS MODEL IS VIABLE OVER THE LONG RUN GIVING ABOVE BANK INTEREST/ EPF RETURN AND INFLATION ADJUSTED RETURNS, I WOULD CONSIDER THEM.I WOULD RATHER CONSIDER COMPANIES WHICH HAVE SUSTAINABLE RETURNS OVER A LONGER PERIOD OF TIME RATHER THAN COMPANIES THAT GIVE ONE YEAR OF FANTASTIC PROFITS AND FALL INTO SLUMBER LAND THE NEXT ONE OR FEW YEARS THEREAFTER.
MY STABLE OF COMPANIES ( A FEW LOTS OF EACH 0NLY )
PRESTARIANG,TIMEDOTCOM,MAHSING,LIHEN,L & G,HOMERIZ,BSTEAD,PHARMANIAGA,MATRIX.
GTRONIC,TSH,UCHITEC,SCIENTEX,TAMBUN,GLOMAC,ECOWORLD,SUNWAY,DIALOG,UZMA,, PMETAL,
ENGTEX, GADANG, PRTASCO,PWROOT,OLDTOWN, YINSON,SKPETRO,AFFIN.
JUST SHARING MY THOUGHTS ON THIS ISSUE OF FA VS TA.
2015-06-08 16:10
I agree that a debate is good n healthy, but avoid gunning someone down if there is any disagreement or that either FA alone or TA alone or TA + FA or whatever combinations fail to produce the desired results. There is no guarantee that stock investment WILL give you gains, it is just the probability.
2015-06-08 16:21
Brader optimus, in this world there is no free lunch la... U hv to earn it.. Paying for kc or otb courses is no big deal... Easily u can earn them bck in 3-6 mths.. Look at ECS, latitud, prolexus, magni, kesm.. If u invest smartly and diversify, u r laughing already.
2015-06-08 17:05
You spot on Icon8888. I totally agree with you, no name calling. This is where trouble starts. I believe both TA & FA are equally important. If use together can produce better result of profits. However, other factors play in as well and not forgetting the timing and sentiment of market momentum. At the end of it, it also depends how much you are satisfied with the returns or the level of margin of profits. Investment is very subjective, needs lots of knowledge, wisdom, wise execution & experience.
2015-06-08 17:35
There is another sifu called HERMAN NG. So many dogs licking his ass in his facebook page. So called magician, always recommend fucked up stocks like HUBLINE. When ask why price goes down, he said lets move on for another stock, this is yesterday's news liao.
2015-06-08 17:47
FA helps to measure the business side of a company. To estimate if a company can make money or survive, you need FA. Investing in company with solid fundamental would pretty much protect the downside. Theoretically if the time horizon is infinity, an investor using FA is unlikely to make any loss. Time is the friend of FA. However, you will never known when you investment is going to bear fruit and you better be patient. Using FA, you should never cut loss unless you notice a "fundamental" change in company, not share price changes.
TA helps to measure the short term perception of investment community towards a company. Over time however, the sentiment will change and it can change rather rapidly. Time factor is tricky to TA. As a result, cut loss is critical to TA because a cut loss point indicates a change in sentiment.
Both FA and TA will make money. TA will run a higher risk of being wipe out but the reward is higher ROI. However, I believe TA is actually harder to master. Any average Joe better learn FA before trying TA. It is easy to have modest return from Investment using FA. I do not know too many who survives for a long period of time using purely TA. In fact I believe to be good in TA, you need to be smarter than average.
Comparing FA and TA are like comparing a Goalkeeper versus a Striker.
I have some confidence in my FA as long as the business is not too complicated. I subscribe to OTB because I have proven myself bad in TA. In addition, OTB is not a pure TA either. OTB is using TA with FA blended in.
Take the case of FGV. Neither Kcchong will not buy. OTB will not buy either no matter how good the chart is because it fails he FA criteria.
Take another case of Kuchai. Kcchong will buy because it is deeply undervalue. OTB will buy when there is signal that something is going to happen to the company. OTB will probably buy at a higher price, less waiting time.
Which method is better ? If you ask me, FA , because I am not so smart. But I believe no one should try to touch TA before having knowledge in FA.
2015-06-08 18:41
Brader tiuron, ppl rekomen but money is urs.. If u chose to follo its ur fault lo.
2015-06-08 20:26
agreed...chonghai comments say it very well.
just want to add one thing incase it helps people to make a conclusion on the debate.
TA is ever evolving..dynamic...you have to be at the top of the game all the time...
I guess FA is quite static - a relatively fixed method of analysis.
So...if you are greedy (better said 'high expectations with high risk')...and you think you have an edge over the others..go for TA...if not stay steady with FA.
2015-06-09 00:00
who wins who loses, show us the asset & cash u hav in hand then we all know, hahaha
2015-06-09 00:27
gkheng, no point knowing who wins or who loses. In investment you cannot just choose to follow the more successful person. You need to choose the method that is more suitable for your character. An example:-
FA is about making less mistakes and be confidence with your analysis. The yardstick is on company performance.
TA is about admitting mistakes fast quickly, limiting damages of mistakes and move on. The yardstick is on stock price.
What is your hunch when stock price falls ?
2015-06-09 03:49
Chongchai i saw one guy posted otb rekomen NAIM... The revenue keeps dropping... How? M sure kc will not rekomen this stock...
2015-06-09 05:55
bracoli, I am not sure when OTB recommend NAIM. I am his subscriber since end of last year and I cannot remember coming across NAIM.
To me NAIM is sitting on valuable assets waiting to be unlocked. Nobody will realize when the unlocking will happen. Until then, it is likely to remain undervalued. I will place a small bet on NAIM if it is cheap enough. As for OTB, I don't think so. He is very bearish on all property counters. That could be some time ago and he might have changed his mind on NAIM. Remember that if you use TA, you need to follow the price, not your ego. I prefer my ego, so my TA always failed me.
HUAT LAI is another company that is extremely poor in capital allocation. They are in a wonderful business that is really attractive to me but after going through their capital allocation, I prefer to give it a pass.
2015-06-09 10:24
Naim - There is no growth. Hence I will not be interested in this stock. I select it in early 2015 because its PER is low. The last 2 quarter results are not good, hence I avoid it now.
Thank you.
2015-06-09 21:37
Mr. Ooi...
Mind to share how applicable RSI to be used for short/medium/long term investment.
Thanks for sharing.
warmest,
duit
2015-06-09 21:40
Posted by duitKWSPkita > Jun 9, 2015 09:40 PM | Report Abuse
Mr. Ooi...
Mind to share how applicable RSI to be used for short/medium/long term investment.
Ans : I do not like to use RSI, I prefer Force Index.
I feel that RSI is always not good enough, it will frighten you to buy when the market is very bullish.
I think it is good to use it in medium term.
Thank you.
2015-06-09 21:44
Mr Ooi,
I have checked with many different cases. I found that RSI can only be applied to "sentiment + highly speculative" short term trading buy counter.
I have the same finding like yours.
Have a good evening. Thanks.
2015-06-09 21:48
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