Pruguy: I am very skeptical of technical research. I won't bore you with all my reasons: in brief, I believe it is a system which purports to offer the objective verifiability of science (or at least statistics): it opposes itself to fundamental analysis, which is defined as being essentially subjective, vulnerable to faulty assessment of intangible forces.
But I think technical analysis is just another highly stylised form of subjective analysis, a variety of symbolic systems, infinitely adjustable, after the fact, to brute reality, but very useful to those of its practitioners who want to exert influence on the basis of their esoteric knowledge, or to the non-professionals who cling to it as a psychological prop in the mistaken belief that it is a superior form of knowing than well-informed commonsense.
I concede that part of fundamental analysis should be an assessment of the flow of money in and out of a share.
On CNBC Dorsey claimed to favour "point and figure" analysis. His record on the tips he gave since he was on in September was mixed. One of his tips was down the other two were just higher than the percentage rise for the DOW and the S&P in the same period.
His general thesis, was that the easy money has been made in the recovery from the lows. That the market is now normal, with a bell curve distribution across all sectors, that strategy going forward should be to remove a third of any gains of 30% and another third of any gains over 50%. He recommends defensive stocks such as Campbell, Johnson and Johnson. He thinks stocks in the middle of the bell curve, the "most normal" stocks, should be bought but only on pull-backs from current prices.
The very first question was on CPQ. He was very definite. He did convey the impression that CPQ was a maturing company and necesarilly slower in the growth of its share price. I agree with you that he used the term "mature company" incorrectly, yet, it is clear that he means that CPQ is now a big, complicated company and cannot grow as fast as it used to.
I have a very simplistic method of assessing pundits on TV. I just ask myself whether I would hire them as my investment manager. I judge their intelligence by their facial expressions and words. He would not pass the test. However, some of his comments were reasonable.
Frankly I would be happy with a move from $34 to $38, espescially if I could do it a few times, and am hesitating to add to my position only because I am not convinced that I cannot get a move from $32 or $33 to $38.
Victor |
