Kb,
First, as I originally noted, my perspective on Fundamentals is different. I also don't think that FA is a single methodology or formula. If it were, there would be broad consensus about many more questions/issues and one could just apply a mechanistic formula for a projected result.
Fundamentals do offer promise. If a company increases earnings by 100%/yr, I would argue there would be strong pressures for the price of the stock to increase. Yes, other issues can skew the actual price action, but in the main, I make the case. Now, if earnings rise 10-20-50 or just 1%, the scale by which a stock's price will change is not linear. Still, are earnings/profits/revenue growth, etc., useful? Yes, I think so.
I have trouble with your analogy with waves. I think I understand what you're saying as it relates to ST trades, but I don't think I can reply with contextual accuracy. Without ducking the issue, I will try. How do you determine if a wave is wave........or the first liter of a Tsunami? What methodological tool(s) helps one differentiate between wind, a reverse chop on the wave, a tide, a swell, an impending hurricane, or the wake of an ocean liner?
How long can you ride a wave and how do you know? Take a look at these charts for 2-3-5 years: Peyto (Pey/un.to), Harvest (Hte/un.to), MSFT, FDG, STR, GLW, NT. How would one know when to buy/sell, if not by FA?
Reason is not the perfect answer for the idiosyncratic behavior of the markets, but I prefer reasoned judgment to baying at the moon. For me, it is less about facts, and more about which facts at each separate timeframe.
wp |
