Thanks @ChaitanyaC for bringing this up. The beauty of Model is in its application. Let us see how this model is applied to solve a classic case in investing.
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The nightmare situation for Technical analyst, who believe price is everything, is the pump & dump companies. Where chart looks perfect, very nice breakout, entry point & excellent growth. The trouble starts when such companies start falling. It’s free fall with absolutely no buyers. Getting stuck with such companies is loosing most of the Investments.
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On the other horizon, for Fundamental analyst, big challenge is the waiting period. With the feeling of, I know company is good, very big Margin of Safety, excellent opportunity, Buys the stock. Now, price doesn’t move. It just hovers around and never tries to catch MY expected value. How long shall I wait? Big investor with in depth knowledge about the company can wait, but a normal investor with limited knowledge, how long to hold on???
Can we club them and solve problems for each other??? Technical investors can spend some time with checking the fundamentals of the company and greatly reduce the chances of getting in to pump& dump companies. Fundamental analysts can build the watch-list of great opportunities but enter the stock ONLY when the momentum starts (breakout point of tech’s), so unproductive Waiting period is minimized. (This is just one solution. But the techno-funda analysis is getting quite popular addressing many such situations. The books by William O’Neil & Mark Minervini gives a good insight. Our own most popular thread ‘Hitesh portfolio’ @hitesh2710 filled with great insights on techno-funda analysis.)
The idea once again is to bring two trouble-sum situations, club them with varying possibilities and create win-win situation.
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