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- Manlobbi
Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤
No. of Recommendations: 1
When I first joined this board, it was almost all about fundamental analysis. p/s, 3 point relative value, etc. I have noticed that it has changed to almost all technical analysis. While I don't follow that part of the board that closely, no new 99 day high, moving averages, bottom catchers are all technical analysis. We do talk about the CAPE ratio, and that is fundamental analysis.
No. of Recommendations: 4
When I first joined this board, it was almost all about fundamental analysis. p/s, 3 point relative value, etc. I have noticed that it has changed to almost all technical analysis. While I don't follow that part of the board that closely, no new 99 day high, moving averages, bottom catchers are all technical analysis. We do talk about the CAPE ratio, and that is fundamental analysis.
A funny observation: I have been following this board since the Fool days. I was not, perhaps a devotee but liked it for perspective and gathering "intel". It has always struck me as primarily a technically based source with maybe, an eye toward fundamentals.
No. of Recommendations: 1
I think the original screens were fundamentally based with a final momentum sort. Then when they got into market timing, it became a technical board.
No. of Recommendations: 8
It looks like the OPost is gone.
The OPoster is right in that back in the day (late 90s/early aughts), the group built screens based on fundamental metrics and limited technical factors (mostly, relative strength).
However, it became apparent with experience that market behavior in general dictated the movement of most stocks up or down, obviously to differing degrees. Holding a stock with recently great fundamentals in a downtrending / bear market was generally highly likely to lose money. Which led to the development of the BearCatchers and other market "timing" (really health/breadth & what became trend following) signals. Those signals are generally intended to play defense against drawdowns, but a few are targeted to identify sentiment extremes which are great contrarian, short term, opportunities.
Combined with the decreasing relevance and sporadic / randomized (if not disappearing) outperformance of the now-ancient fundamental factors - for a variety of reasons -, that's why the focus of the group has settled on market-based technical indicators.
FC
No. of Recommendations: 14
I see the main thrust as "quant". Investment decisions based on measurable concrete inputs. "Technical" items (price and volume), "fundamentals" (financial statements and related). But the same thing applies equally to any "quant" approach to the broad market: using quant criteria to identify good and bad times in the market, which is the market timing end of things. Pretty much anything you could program a computer to do.
What doesn't really suit the philosophy is stuff that is based on news items or individual opinions. (I'm guilt of both, but hey, it's also a community, so sometimes people gossip)
Jim
No. of Recommendations: 8
FlyingCircus’s reply is pretty much the way I see it. Back in the early 2000’s simple screen with 2 or 3 fundamental factors with a momentum kicker worked reasonably well. For the last 10 years very, few screens have performed well with enough consistency for one to remain confident enough to continue.
However way back in 2005 Dan Parquette posted an Excell spread sheet of with a 20-bin histogram of both fundamental and factor performance. I borrowed his concept and made my own versions for both P123’s data and Stock Investor Pro data. The performance of many individual factors still work over a long period but not consistently over time. Simple one less/greater than one branch of a decision tree stopped working as the competition started using ranking systems. You can build ranking systems on GTR1 but it was easier on P123’s site. Ranking systems give you the advantage of combining a number of individual factors that all perform a little better than average increasing your probability of success.
Unfortunately, ranking systems that actually work and continue to work are very difficult to put together. If one kept track of all the individuals on the P123 site that offered users access to their great backtested outperforming models you would observe that very few outperformed post discoveries. The core group of individuals that have continually outperformed as far as I can tell are not weekend warriors they are very analytical statistically focused individuals.
The more current trend is using machine learning. Which in essence is just an automated way of making a more sophisticated ranking system. I’ve spent the much more than time than I thought it would take going down the ML path. At this point the results seem very promising but I can already see the professional systems I have become aware of will soon arbitrage my temporary advantages.
No. of Recommendations: 0
I think fundamental factors do not work well for short term trading. i.e., one or two months. I think for a years time, that fundamental factors can work.
