Does this mean investors can profit from technical analysis (patterns in market fluctuations) and quantitative analysis of financials more than from understanding a company's value proposition?
Thanks - it does not mean that investors can't profit. The first question is the likelihood of profit vs. the risk assumed by taking the position. The second question is the efficay of technical trends as a stock picking tool on an absolute or risk-adjusted basis. It's impossible to know. Third, the practice causes investors to invest time and energy on beating the market - meaning added stress - while avoiding everything that matters. It goes back to the fundamental question: to make money for what? Money is a tool. Last, Chapter Six proves that beating the market consistently over a long time period does not guarantee success - far from it - if you define success as meeting or exceeding all important lifetime aspirations. Which is what matters.
Maybe I misunderstood the question. Technical analysis is price driven and the capital market assumptions I use are price driven, but there is a big difference. Technicals focus on supply/deman trends of individual securities in the very short term. CMAs focus on long-term price performance to identify median return, standard deviation and correlation attributes of asset classes.
Does this mean investors can profit from technical analysis (patterns in market fluctuations) and quantitative analysis of financials more than from understanding a company's value proposition?
Thanks - it does not mean that investors can't profit. The first question is the likelihood of profit vs. the risk assumed by taking the position. The second question is the efficay of technical trends as a stock picking tool on an absolute or risk-adjusted basis. It's impossible to know. Third, the practice causes investors to invest time and energy on beating the market - meaning added stress - while avoiding everything that matters. It goes back to the fundamental question: to make money for what? Money is a tool. Last, Chapter Six proves that beating the market consistently over a long time period does not guarantee success - far from it - if you define success as meeting or exceeding all important lifetime aspirations. Which is what matters.
Maybe I misunderstood the question. Technical analysis is price driven and the capital market assumptions I use are price driven, but there is a big difference. Technicals focus on supply/deman trends of individual securities in the very short term. CMAs focus on long-term price performance to identify median return, standard deviation and correlation attributes of asset classes.