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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: chowder who wrote (40801)	3/25/2005 12:27:40 PM
From: EnergyElmer	Respond to of 206214

"Fundamentals don't provide a basis for exiting a position that is reliable and consistent. It's also subjective" Dabum, I respectfully disagree with this assertion. The most important part of fundamental analysis is valuation. What is the company's intrinsic value. This is the core of Fundamental Analysis. Analyzing past, current, or future industry and company fundamental business trends is important, but is not done in isolation or at the exclusion of valuation. I use valuation/intrinsic value (DCF, P/E, EV/EBITDA, NAV) to determine my sell targets. Like technical analysis I typically exit a position early and miss the last move as stocks typically move past intrinsic value as momentum investors will bid the stock up past this value. Both fundamental and technical analysis are proven successful methods and one can win using one or the other or a mixture of both. To say that fundamentals are subjective or don't provide a reliable sell signal is incorrect. Fundamental analysis (evaluation of industry and company fundamentals as well as intrinsic value) is what drives the majority of merger/acquisition activity. Otherwise, why would a company acquire a private company with no technical data available? Because they can value what that business is worth. Using fundamental analysis to evaluate stocks is no different. No matter how good the fundamental trends/outlook is for a company, I will not buy it if the stock prices is already discounting it. A TA investor can make money on this type of a stock because he/she doesn't care what the business is worth. Nothing wrong with this as long as one has the knowledge and tools (you have repeatedly demonstrated that you possess both) to do it. I am trying to get there, but I still feel most comfortable using FA.