Stockbrokers 2

And what does portfolio management have to do with being a financial advisor? There's a reason most retail financial advisors work with a portfolio of portfolios, leveraging the specialized expertise of other dedicated professionals.

Exactly

Freelunch -

You don't know what the hell you are talking about.  There are a ton of successful quantitative models that trade via technical analysis only.

I am a portfolio manager that utilizes technical analysis only.

[quote=maverick/goose]

Freelunch -

You don't know what the hell you are talking about.  There are a ton of successful quantitative models that trade via technical analysis only.

I am a portfolio manager that utilizes technical analysis only.

[/quote]

So what you are saying is that you pay no attention to earnings reports, P/Es, management shifts, and the business cycle.

Hmm.

Why?

[quote=FreeLunch][quote=maverick/goose]

Freelunch -

You don't know what the hell you are talking about.  There are a ton of successful quantitative models that trade via technical analysis only.

I am a portfolio manager that utilizes technical analysis only.

[/quote]

So what you are saying is that you pay no attention to earnings reports, P/Es, management shifts, and the business cycle.

Hmm.

Why?

[/quote]

Maverick makes sense and FreeLunch you just will never understand it, and not many people do.  Many of the stocks we invest in don't have positive earnings.  They are on the verge of something, and once it has been recognized, the stock will take off.  What good do fundamentals have there?  If two stocks have the same technicals, then, yes, we will look at some of the fundamentals. 

Free Lunch, I agree with you entirely.

I am definitely a fundamental analysis stock picker.   I look at a company's stock as an investment for my client's in the same way that I looked at businesses when I was a commercial lender, (which I was for many years prior to this incarnation).  My anaysis was based on realities, not charts or Ouija Board gymnastics.

Loaning money to a company as a banker or investing in stocks seems to me to be the same thing.  My recommendations of stock picks  or asset allocation is based on fundamentals of economics and not charts.

My criterion when deciding to lend the financial institution's money is the same as my clients when investing.

Why do I want to give/lend money to this company?

Is there a good chance that I would be repaid: or will they default on the loan?

Is there a high possibility of return on my money?

What is the competition to the prospective company I am giving money to? 

How is this company going to beat their competition?

What are the business dynamics of this industry, business company and how are they going to benefit or not by these dynamics?

What is the caliber of the management and their ability to run a business?  

What is the track history of the business in relation to other comparable companies?  Do they lag or exceed?

How much cash flow comparable to liabilities do they have?  Short term or long term liabilities. How do they compare to other companies in the same industry for capitalization?

Bottom line is: would I put my Mother's money in this investment?

A fancy chart means doo squat in the real world.  What is more important is performance.

My personal opinion is that Technical Analysis should only come in to play LAST.

My criteria is as follows (generally) 

Relatively low PEG ratio.

Attractive P/E and growth rates

Low Debt/Equity, high Return on Equity, High Profit Margin.

THEN, only then do I screen them on technical parameters.

Dust Bunny - I like your approach

[quote=FreeLunch]

My personal opinion is that Technical Analysis should only come in to play LAST.

At least, the idea is some good CFP material.

My question is, if you are running a full service "planning" shop, how much value do you really add by becoming a stock picker?

It may be fun, it may be logical, I've had better results focusing on other aspects of the financial planning process. That's just me, though.

[quote=joedabrkr]
Why?  There are plenty of cheap stocks out there that you can buy, only to later realize that they are fundamentally cheap for a good reason.

Technical analysis is nothing more than the use of a graphical reprentation(i.e. the chart) to determine the dynamics of supply and demand for a particular stock or ETF.  In the short term(and arguably in the long term) the ONLY reason a stock goes up is that there are people who are willing to keep buying it(not sell it) at successivly higher prices.

So why not use technical analysis(which btw can be far more time efficient) to determine which stocks have this favorable supply/demand balance, and THEN use fundamental analysis to determine which ones are most attractively priced?

It's worked well for me....
[/quote]

That's a good point Joe.  In the short term, you are right.  My experience with technical analysis has shown me when a stocks demand is coming back into play.

overbought, oversold, sellers are losing, stocks bottoming, peaking, etc...

don't get me wrong, I LOVE technical analysis, and to each his own.  Everyone is making some good points.  I just believe that it can be relied on exclusively b/c there are too many variables out there. 

Take a look at this stock, and its UPWARD trend.  PCP - Precision CastParts.  There is a Technical Buy and I HAVE been loading up and will continue to until it breaks that technical uptrend.

But you know what I just thought of?  If something happens within the company (negative) - it'll typically turn into a TECHNICAl sell anyway once massive selling occurs.

I guess, if you've got a style and it works, don't change it - have 100% conviction.

But, you Can't IGNORE fundamentals.  I guess thats what I'm getting at.

[quote=GolFA]

At least, the idea is some good CFP material.

My question is, if you are running a full service "planning" shop, how much value do you really add by becoming a stock picker?

It may be fun, it may be logical, I've had better results focusing on other aspects of the financial planning process. That's just me, though.

[/quote]

I've always thought that anyone can get a balanced mutual fund on their own.  If they wanted near index returns, it's not that hard.  If part of their "financial plan" is to have a portion of their assets get significant returns, then we as stock pickers can have a significant impact.  We've all seen average investors in their Scottrade, Etrade accounts and what have you, make poor stock choices or buy hi and sell low.  Many of them don't have the time, interest, nor knowledge to do the research and pick the stocks.  There is a ton of value we can add.  If you have multiple people on a team, one devoted to picking stocks, another for outside money managers and "planning" it can be a very capable approach that meets many of the clients needs.  Thats what we do, kind of like a ying yang thing I guess.  One of a million ways to do it.

[quote=FreeLunch]

[quote=joedabrkr]
Why?  There are plenty of cheap stocks out there that you can buy, only to later realize that they are fundamentally cheap for a good reason.

Technical analysis is nothing more than the use of a graphical reprentation(i.e. the chart) to determine the dynamics of supply and demand for a particular stock or ETF.  In the short term(and arguably in the long term) the ONLY reason a stock goes up is that there are people who are willing to keep buying it(not sell it) at successivly higher prices.

So why not use technical analysis(which btw can be far more time efficient) to determine which stocks have this favorable supply/demand balance, and THEN use fundamental analysis to determine which ones are most attractively priced?

It's worked well for me....
[/quote]

That's a good point Joe.  In the short term, you are right.  My experience with technical analysis has shown me when a stocks demand is coming back into play.

overbought, oversold, sellers are losing, stocks bottoming, peaking, etc...

don't get me wrong, I LOVE technical analysis, and to each his own.  Everyone is making some good points.  I just believe that it can be relied on exclusively b/c there are too many variables out there. 

Take a look at this stock, and its UPWARD trend.  PCP - Precision CastParts.  There is a Technical Buy and I HAVE been loading up and will continue to until it breaks that technical uptrend.

But you know what I just thought of?  If something happens within the company (negative) - it'll typically turn into a TECHNICAl sell anyway once massive selling occurs.

I guess, if you've got a style and it works, don't change it - have 100% conviction.

But, you Can't IGNORE fundamentals.  I guess thats what I'm getting at.

[/quote]

FreeLunch, that will occasionally happen to us, where it technically looks great, but something happens, such as a negative verdict in a court case.  The stock could go down 20+%, and at that point we wait for it to come back.  Sometimes we have to wait 2-3 years, but because our clients are very diversified, it is ok.  Usually the stock will at least fill the gap down and we can get out for even money.  It is very seldom that such negative things happen, but of course once in a blue moon is inevitable.  Things can happen to the best of stocks, technically sound and fundamentally sound...

[quote=FreeLunch]

[quote=joedabrkr]
Why?  There are plenty of cheap stocks out there that you can buy, only to later realize that they are fundamentally cheap for a good reason.

Technical analysis is nothing more than the use of a graphical reprentation(i.e. the chart) to determine the dynamics of supply and demand for a particular stock or ETF.  In the short term(and arguably in the long term) the ONLY reason a stock goes up is that there are people who are willing to keep buying it(not sell it) at successivly higher prices.

So why not use technical analysis(which btw can be far more time efficient) to determine which stocks have this favorable supply/demand balance, and THEN use fundamental analysis to determine which ones are most attractively priced?

It’s worked well for me…
[/quote]

That's a good point Joe.  In the short term, you are right.  My experience with technical analysis has shown me when a stocks demand is coming back into play.

overbought, oversold, sellers are losing, stocks bottoming, peaking, etc...

don't get me wrong, I LOVE technical analysis, and to each his own.  Everyone is making some good points.  I just believe that it can be relied on exclusively b/c there are too many variables out there. 

Take a look at this stock, and its UPWARD trend.  PCP - Precision CastParts.  There is a Technical Buy and I HAVE been loading up and will continue to until it breaks that technical uptrend.

But you know what I just thought of?  If something happens within the company (negative) - it'll typically turn into a TECHNICAl sell anyway once massive selling occurs.

I guess, if you've got a style and it works, don't change it - have 100% conviction.

But, you Can't IGNORE fundamentals.  I guess thats what I'm getting at.

People aren't chasing PCP

PEG ratio is still right at 1

The Forward P/E is = Estimated Growth Rate

You can chase this one another 25% at least.

[quote=joedabrkr] [quote=FreeLunch]

[quote=joedabrkr]
Why?  There are plenty of cheap stocks out there that you can buy, only to later realize that they are fundamentally cheap for a good reason.

Technical analysis is nothing more than the use of a graphical reprentation(i.e. the chart) to determine the dynamics of supply and demand for a particular stock or ETF.  In the short term(and arguably in the long term) the ONLY reason a stock goes up is that there are people who are willing to keep buying it(not sell it) at successivly higher prices.

So why not use technical analysis(which btw can be far more time efficient) to determine which stocks have this favorable supply/demand balance, and THEN use fundamental analysis to determine which ones are most attractively priced?

It's worked well for me....
[/quote]

That's a good point Joe.  In the short term, you are right.  My experience with technical analysis has shown me when a stocks demand is coming back into play.

overbought, oversold, sellers are losing, stocks bottoming, peaking, etc...

don't get me wrong, I LOVE technical analysis, and to each his own.  Everyone is making some good points.  I just believe that it can be relied on exclusively b/c there are too many variables out there. 

Take a look at this stock, and its UPWARD trend.  PCP - Precision CastParts.  There is a Technical Buy and I HAVE been loading up and will continue to until it breaks that technical uptrend.

But you know what I just thought of?  If something happens within the company (negative) - it'll typically turn into a TECHNICAl sell anyway once massive selling occurs.

I guess, if you've got a style and it works, don't change it - have 100% conviction.

But, you Can't IGNORE fundamentals.  I guess thats what I'm getting at.

[/quote]

If you want to "top tick" the stock that everyone else is chasing, then I guess PCP is a great way to do that!
[/quote]

Joe I agree with you.  It's already broken out.  It's had such a good move since mid-2006 that the risk is to the downside in my opinion.

[quote=wallstreeter]

Joe I agree with you.  It's already broken out.  It's had such a good move since mid-2006 that the risk is to the downside in my opinion.

[/quote]

EARNINGS EARNINGS EARNINGS

Plus - if you are a technical guy, what more can you look for?

1% Short, IMPRESSIVE FUNDAMENTALS, huge demand for product, Cheap P/E

Classic case where ignoring fundamentals is a mistake!

[quote=FreeLunch][quote=wallstreeter]

Joe I agree with you.  It's already broken out.  It's had such a good move since mid-2006 that the risk is to the downside in my opinion.

[/quote]

EARNINGS EARNINGS EARNINGS

Plus - if you are a technical guy, what more can you look for?

1% Short, IMPRESSIVE FUNDAMENTALS, huge demand for product, Cheap P/E

Classic case where ignoring fundamentals is a mistake!

[quote=wallstreeter][quote=GolFA]

At least, the idea is some good CFP material.

My question is, if you are running a full service "planning" shop, how much value do you really add by becoming a stock picker?

It may be fun, it may be logical, I've had better results focusing on other aspects of the financial planning process. That's just me, though.

[/quote]

I've always thought that anyone can get a balanced mutual fund on their own.  If they wanted near index returns, it's not that hard.  If part of their "financial plan" is to have a portion of their assets get significant returns, then we as stock pickers can have a significant impact.  We've all seen average investors in their Scottrade, Etrade accounts and what have you, make poor stock choices or buy hi and sell low.  Many of them don't have the time, interest, nor knowledge to do the research and pick the stocks.  There is a ton of value we can add.  If you have multiple people on a team, one devoted to picking stocks, another for outside money managers and "planning" it can be a very capable approach that meets many of the clients needs.  Thats what we do, kind of like a ying yang thing I guess.  One of a million ways to do it.

[/quote]

Sure, nothing wrong with you being the person who takes the management fee. So yeah, I can combine low cost large cap value ETFs with higher cost actively managed international funds, say the Fidelity team, and achieve alpha or at least justify my costs at blended index performance levels.

I just think at the end of the day, it comes more down to the sizzle you are selling, at the retail financial services level. We can all kind of nod and wink about that one. If you are really doing what you say you are, don't waste your time in retail, 'cause guys like me will buy and blend in some of your product.

I like to tell prospects, " What are the chances that some broker in downtown Atlanta is going to be a great stock picker, versus the specialized managers on Wall Street? Let's just delegate that function, and you can come to my office in the burbs and save yourself a trip to the expensive skyscraper downtown. "

But that's just my niche.

[quote=FreeLunch][quote=wallstreeter]

Joe I agree with you.  It's already broken out.  It's had such a good move since mid-2006 that the risk is to the downside in my opinion.

[/quote]

EARNINGS EARNINGS EARNINGS

Plus - if you are a technical guy, what more can you look for?

1% Short, IMPRESSIVE FUNDAMENTALS, huge demand for product, Cheap P/E

Classic case where ignoring fundamentals is a mistake!

[/quote] 

I understand what you are saying, but I think there are BETTER bets out there.  That's all I am saying.  I would rather look for something that is about to break out rather than something that has already moved over 100% in it's last big move.  Maybe our technical research could have found it at 65 when it broke above the high around 63 or 64 where as your fundamentals are finding it at 122.  We may get in earlier and make more money.  Anyways, looking at the long term chart, it's gone straight up and has significant downside potential.  It looks like any tech stock in 1999 right now on that chart, not that it will crash, but it's moved way too much for me to even think about.  Hope it works out for you though

[quote=joedabrkr]

Cyclical stocks are usually appear cheapest at their peak valuations.

How's that for ignoring valuations.

For your sake I hope I'm wrong.  Either way we shouldn't be commenting on a specific stock on a public board, so I'm done with this thread.
[/quote]

We'll be done with this thread - you are right.  I guess we shouldn't be talking stocks...

Where did you hear that - I'm not sure what you mean.

Either way, I'M LONG and there is no talking me out of it!!!!!!

Take U.S. Steel for example (X) - The stock is trading at 4X Estimated growth Rate.  It is 4X more expensive that PCP.

How about that for valuations?

For the Record.

I didn't find it at 122

I found it at 85.

Thanks for hoping it works out!

Maybe this wasn't the best example.

How about Micron?

combining the two (fundamental and technical) works pretty well. 

and when looking to buy a stock when all the fundamental adds up positive what makes XYZ better then ABC, Technical. It’s much better for the short term guidance.  think of how many buy rated blue chips out there that don’t do anything despite incredible fundamentals.

too many advisers rely on some finance 101 class, Jones training program, or even the CFP investments section, which is about 100 level as well to support their mindset. 

They both work, most aren’t comfortable or educated enough on the second.

[quote=FreeLunch]

Where did you hear that - I’m not sure what you mean.

[quote=GoingIndy????]combining the two (fundamental and technical) works pretty well. 

and when looking to buy a stock when all the fundamental adds up positive what makes XYZ better then ABC, Technical. It's much better for the short term guidance.  think of how many buy rated blue chips out there that don't do anything despite incredible fundamentals.

too many advisers rely on some finance 101 class, Jones training program, or even the CFP investments section, which is about 100 level as well to support their mindset. 

They both work, most aren't comfortable or educated enough on the second.


[/quote]

Agreed.

[quote=joedabrkr] [quote=FreeLunch]

Where did you hear that - I'm not sure what you mean.

[/quote]

I didn't know what it meant until I was whipsawed by homebuilders in the LAST downcycle.  I didn't understood what it mean, either.

Take some time to think it over.

Meanwhile, I'm glad it's working out for you so far.

And no, we shouldn't discuss opinions/ideas regarding specific stocks on here....that can cause problems for us.
[/quote]

Thanks for the tip.  A lack of being open-minded when it comes to trading equities can get you wamboozled.

[quote=FreeLunch]

Thanks for the tip.  A lack of being open-minded when it comes to trading equities can get you wamboozled.

Thanks