James,
Why would Lynch use TA, he doesn't need to. Read up on him, you know how he worked, he had HUNDREDS of brokers and insiders coming to him everyday, giving him literally thousands of stocks to buy with more inside information than you or I will ever see. How hard is it to say "buy and hold" when you can buy Telefonos de Mexico through private placement at the 5 cent range?
How exactly does a stock look cheap? Oakley looked cheap at 20, down from a high of 27. Then earnings came out, THEY BEAT THE STEETS BEST ESTIMATES BY 4 CENTS, and the stock dropped 4 points, and continued down to the 9 dollar range where it is now.
Without TA, what criteria do you use for entries? Exits? Money Management? How long are you willing to lose money on a stock by "buying and holding" before you sell it? How you deal with making decisions based only on emotions? How do you escape the problem that most of the Oakley holders on this board have, "hoping" and"wishing" a losing stock back up? Right now the stock needs to increase 100% just to get back to the break even point that many of the people on this board have been holding it from. It's now going on 4 months, how long are you willing to hold it.
All you anti-TA people get it through your head-the ONLY thing that moves a stock price is SUPPLY AND DEMAND. Period.
All TA does is attempt to interpret the direction of that supply and demand to anticipate price movement. I don't get guys like you, its the same concept that business uses to forecast for inventory, profits, and P & L statements. How many people are buying their products? How much are they willing to pay for it? Are more or less people buying/selling? Stocks are the product, what is so tough to understand about that. It is not magic or vodoo, or 100% accurate. maybe not 80% or even 60% accurate. But it does provide another tool in your box to help make some money. It is for people who want to maximize their profits on an "IBM" run from 100 to 150 from 50% to 75% , 100%, 200% or more, and in a shorter time frame. Most TA'ers don't use it by itself. Most of us "filter" our database to find stocks with 80>RS and 70>EPS (or the opposite for short candidates), and then use TA to fine tune our entry and exit points. These "loss limits" that you make light of, are what let me exit OO back at 20, while others like Mr. Ro, lose their ass, and try to hope a stock back up while it loses 50% or more.
The point of TA is not to "pick ten stocks and tell if they will be up or down in a month." TA doesn't claim to be able to do that, and you CERTAINLY couldn't do it with your "hmmm! well this stock seems underpriced, but this one is overpriced," method.
BCL |
