Systemic and Non-Systemics 101
My favorite line in the movie "Cool hand Luke" is when
the warden says to Paul Newman, "What we have here is
a failure to communicate.."
But let me state I do indeed start with an hypothesis
and assumption based on trends in the market and in the
world. An intuitive rather than rational POV (point of view)
For example, and this I probably the most morbid and illustrative
examples I can come up with, my mother died in 1996.
After the plug was pulled, and my family got a plot in the cemetery
near her childhood home in Rogers Park, I was greatly distressed. This grief, however, didn't stop me from noticing that this cemetery was part of a larger company called Service Corporation.
Now stocks can be defined as either systemic or non -systemic.
Systemic stocks are cyclicals and non-systemics are not dependent upon an economic cycle for growth.
Now what are the two things in life you can be sure of?
death and taxes? Right.
Now I always thought that all these cemeteries were mom and pops.
Well they aren't and I said whoa there Nelly, this is the perfect non systemic company...
After identifying the sector and non systemic nature...then
I checked what I call fundamentals and what many appear to be calling
technicals. In a way I think we all are right in accordance with our own definition of our words. Remember without getting into linguistic theory about signs and signifiers, the same word can mean
something different to two different people.
Example, the conservative politician and a nature conservative.
One's a tree chopper the other a tree hugger.
What I associate with Technical analysis partly is different forms of quant theory that when these were presented to me, made my eyes roll over.
Now I am what I say I am. I am not a professional in any way. However my cousin who worked for Kidder Peabody and a couple other places recommended a number of books for me to read. One of these books that deals with the above subject matter is called
A Random Walk Down Wall Street
by Burton G. Malkiel
amazon.com.
My cousin's role in these past firms was as a macroeconomic
advisor. He is currently a Professor at a college.
I could list a "name" or two of who I have traded picks with, but last time I mentioned my C.U.'s friend's husband name on line,
I got a call from her and haven't spoken with her since. Thus I won't
make that mistake twice. This gem too ascribes to a meet the CEO
kick the tires philosophy of investment which is based on earnings potential. Price to earnings, cash flow, percent growth or basically the bottom line have always again to me constituted fundamentals..that is qualitative analysis
Whereas quantitative analysis i.e.. quant or technical analysis
according to definition I use is a mathematical model of
a stock's fluctuations in accordance with a whole series
of charts and quantifiable models and tendencies of an issue
describe over time. Again I do not pretend to understand
this stuff other than maybe use a chart or two to test
bottoms, break outs, and support levels....
Again my "style" as one may easily construe is all over the place
but largely based on research that can be done from any and
every possible angle.
Sincerely,
ztect.
the warden
Subject 25189 |
