May 22, 2008
Posted by Gorillapaws
While I somewhat agree with the efficient market hypothesis (at least with the part that past pattens cannot be used to predict future performance), I believe, at least in theory, that it's possible for the market to make errors in valuing securities. I think that technical analysis is a bunch of garbage, but I do think that with dilligent hard-work, it may be possible to find and capitolize on opportunities where the market may have under or over valued a security. Based on my assumptions about how the market works, are there any books (no best-sellers or "ten secrets to beating the market" type stuff) that you would recommend? Is fundamental analysis the process/theory/philosophy that most accurately represents my beliefs/assumptions about investing or am I misinterpreting the definition of fundamental analysis? Thanks in advance to anyone willing to help out someone who's intersted in starting to learn how to invest. I should mention that I do have a solid understanding of the elementary concepts of economics but would like to invest the time and energy to learning how to analyze and interpret the various analytical tools out there.
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May 23, 2008
Posted by stevelup
( 2 ratings )
The "bible" for fundamental, value-based stock analysis is the Graham & Dodd book "Security Analysis" which was first published in 1934!
Google "Graham & Dodd" and you'll see how often it is cited as the basis for most value based analysis.
Happy Reading.
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May 23, 2008
Posted by knor208
( 1 rating )
I will get back to you on fundemental analysis which is understanding a stock from the perspective of how the company performs ie profits, cash flow, pe,growth etc.
so growth investing, value based investing uses fundemental analysis to find companies to invest in. However dont be so quick to discount technical analysis. You may have a misunderstanding of technical analysis becasue there are many different types of technical analysis just like there are many different types of fundemental anyalysis.Technical analysis is more of a tool to use to find out when to buy a stock while fundementals is a good tool to use to find a stock to buy. Professional investors will often use both. checkout my website http://todaysinvestments.googlepages.com there is a box that you can input a symbol and it will take you to asite that gives an excellent breakdown of a stock from a technical standpoint. it is free and fun if your into this sort of thing. the box is titled Askstockguru.com one click stock analysis. Try it its free and does a great job of helping you understand the technicals of a stock..From a fundemental perspective books by Jeremy Sigal are very well known some are considered classics.
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