GKP

If you are good at working out the fundamentals, and can predict a general long term long/short status for a share, then does that give you a head start on the technical side?

No. Fundamentals inform you about the company. This has nothing whatsoever to do with trading. Trading is predicting the 'herd mentality'. What will the majority do? Nothing more.

If you're talking about long term investment then maybe fundamentals come into the mix, but not for trading.

All just my opinion of course.

Hi MFB,

It's a difficult question to answer imho. I'm certain you don't need to know anything about fundamentals to be able to make money in the markets, but equally if you're good at the fundies then you can do the same a la Mr Buffett though you probably need a much longer term view.

Question: how has knowing GKP's fundamentals helped anyone make money on this share in 4.5 years?

As another example, Kingfisher Group is on remo's share tips as a possible short this week. It announced results today of approx 4.1% increase in sales, revenue, profit or something or other. That's fundamentally good news, right? However, unless it closes above 421p the stock will almost certainly drop. It could be making an exhaustion candle as I type (we have to wait and ee where it closes).

Both fundamentals and TA have their place in the market but they are not to be confused. Often news, whether good or bad, gets sold into. Sometimes TA predicts a price move and then news comes along to make it happen. Sometimes you get big price moves with no news at all (though investors will usually seek to justify such price moves through some vague and largely irrelevant snippet from an obscure blog).

The market is the market and there's no point in saying that a share *ought* to go up because the fundamentals are good. It just doesn't often work like that.

I remember a III poster called stopthismadness saying once: the only fundamental factors which affect share price movement over anything but the short term are company game changers (eg a new oil discovery in Aug 2009 lol). Everything else just provides a trading opportunity. Another way of looking at this is the "efficient market" theory: all the complexities of the fundamentals are already priced in to the market. You therefore don't need to know them. All you need is to be able to read the price history to see whether the company is fundamentally on the up or on the down. It's much easier to interpret one variable than hundreds.

Just my view. It's very difficult to effectively trade a share whose fundamentals you know. Fundies give you a bias which may not be apparent in the price action.

Thanks for the responses guys.

I can sum up my position re all this by saying, 'I pick well, but trade badly' so obviously I have belief in fundamentals but also in TA.

GKP is an odd one for me to comment on as percentage wise I am a long way up, having picked it up a long time ago on its fundamentals. However, had I had using a decent trading strategy backed by TA I would be a lot further ahead.

Maybe fundamentals come more into play when buying exploration stocks than companies like Kingfisher.

Interesting subject.

(off topic, I notice the live chat 'who's online', looks intriguing. If I log on with google or facebook you'll see the real me or my chartsview username? )

you should see the chartsview user name and not facebook.
unless there is a bug im not aware off..

manfrombrussels wrote: Thanks for the responses guys.

(off topic, I notice the live chat 'who's online', looks intriguing. If I log on with google or facebook you'll see the real me or my chartsview username? )

Thank you jackozy for the advise.

I kind of went in head first with GKP getting a feel for things but yeah my buy in was at a bad point and I was unsure where to place my stop thought about 99p just below 100p. I could do with learning where to place my stop so will do some research.

I seem to remember a Jackozy from the either KAZ or XTA iii board, did you use to knock around there?