Fundamentals: what do they mean to you?

[BSD]

B
How can economists see into the future any better than anyone else? They can't. BUT people pay to listen to their opinion, that's the difference between them and us.

I think you've got me sold.

I wanna cushy job at one of those mutual funds fond of buy and hold strategies based off of fundamentals and that as everyone knows outperform markets so well.

 

[scose-no-doubt]

Or eg take Bernankes predecessor who in all his wisdom basically created the huge bubble that almost took us to the brink of a total systemic meltdown, and whose consequences we are still suffering from today, and that Bernanke in all his wisdom wasn't able to prevent either.

Prevent what? People being idiots and overspending or banks fiddling loan applications to meet bonus targets? Don't forget that despite government intervetion this is still a corporate problem. I'd also eat my hat if they didn't know about it beforehand.

 

[scose-no-doubt]

Even exalted multi-millionaires get it wrong sometimes.

Obviously less so than us lol

 

[BSD]

Obviously less so than us lol

Where ?

Thedocumented track record clearly proves the exact opposite, be it the disastrous performance of fundamamentally driven mutual funds, bank analyst predictions (dotcom bubble all forgotten already ?), think tank economists predictions about what the economic future holds, regular economic crashes that would not occur if economists could predict and steer, etc etc, the entire outcome of applied economics clearly proves one thing, and one thing only, predicting the future via economic models is nothing but a model in failure.

 

[scose-no-doubt]

This is about fundamentals not just economics.

lets not do this anyway. We're obviously on different side of the fence on this one so it's just going to be post after post of drivel from each of us.

Any pics of ladies today?

 

[BSD]

PPeople being idiots and overspending or banks fiddling loan applications to meet bonus targets? Don't forget that despite government intervetion this is still a corporate problem.

That imo is exactly why economics is bunkum, because people are not rational beings contrary to most economic models.

PS to me economics = fundamentals based and analysed predictions about the future.

 

[BSD]

Any pics of ladies today?

Coming I hope Saturday

Off to the gym now.

 

[scose-no-doubt]

That imo is exactly why economics is bunkum, because people are not rational beings contrary to most economic models.

Thats where the quants come!

See ya later.

 

[montmorencyt2w]

Coming I hope Saturday

Pics of ladies coming?
This gets better and better.

 

[meanreversion]

I never thought I would get to this point, but I'm getting bored of seeing pics of K Brook in the Daily Mail. Doesn't she have anything better to do?

No offence to the person who started this thread, but I just don't think the question is that relevant, or the answers that meaningful. Why? Because there is no precise definition of trading using TA or fundamentals. I don't think of myself as a TA trader but I use moving averages, so I am.. etc..

 

[scose-no-doubt]

etc indeed.

RE Kelly Brook. I moved on to Ms Noemie Lenoir a while back. I jibbed her a couple of weeks ago and she took it pretty hard but she's on the bounce back and there are a few new pics floating around google images if you're interested. Plus I heard Claude is well and truely out of the picture now.

Enjoy

 

[BSD]

Pics of ladies coming?
This gets better and better.

ONLY if we win on Saturday.

Otherwise I'll be too busy sitting in a park crying to attend to such matters !

:whistling

PS had to go google those chicks you guys are bandying around here, Kelly and Claude.

Cute tho gotta admit !

 

[Shakone]

That imo is exactly why economics is bunkum, because people are not rational beings contrary to most economic models.

PS to me economics = fundamentals based and analysed predictions about the future.

So are you suggesting, that if Japan has an interest rate of 0%, and the USA has an interest rate of 5%, there is nobody who would want to borrow yen and invest it in dollars, thereby affecting the exchange rates?

I think fundamentals do matter, but they matter less and less over the shorter timeframe (news times excluded). Besides, anyone who thinks fundamentals don't matter, only has to look at a chart just prior and just after a big news announcement. Clearly some of those who have the wealth to affect the market seem to react.

I use technical analysis, just believe you're a bit over the top against fundamentals.

 

[scose-no-doubt]

 

[meanreversion]

She was in Rush Hour 3, I think. A truly execrable film, but she looked good in it.

Sad about the attempted suicide, I don't know much about her but it can't have been good, whatever it was she was going through.

 

[scose-no-doubt]

I should have let her down more gently MR I know.

 

[BSD]

Shakeone, well you don't exactly need a degree in economics to figure that one out.

;-)

Also, don't get me wrong, I daresay the evidence is there that some people have managed to make money long term off of fundamentals.

But that comes at large opportunity costs and with large drawdowns in the interim.

And in any case what drives markets isn't rational analysis of fundamental factors as humans aren't rational beings nor is there one "right" price to be derived at from fundamental analysis, what drives markets is probably more to do with the pyschological tendency of humans at all levels to oscillate in eternal and irrational cycles between exuberance and despondence.

When it's going up people start piling in, be it dot.com stocks or whatever, it then eventually forms a bubble, crashes, and then we repeat with the next new paradigm.

Just look at the oil price eg, what's that got to do with supply and demand ?

Supply and demand of speculators, most of whom are trend following or quant driven hedge funds is all that's driving that.

The tendency to oscillate between irrational extremes is what forms trends, and that's what fundamental, long term investing at the end of the day capitalises on.

Where the shortcomings are is that economics isn't a science in the actual sense of the word coz it can't build models that can repeatably predict unlike say maths or physics, and that's why we have the excesses that we do, and that's why economists predictions be it at banks or think tanks over the decades aren't much better than monkey throwing darts, that's why mutual funds underperform as dismally as they do, and that's why all the economic wisdom in the world couldn't prevent us all almost blowing up in the latest economic mega crisis.

If there were some magic conductor behind the scenes conducting the buying behaviour of the masses which is all that drives price I'd believe that studying economics wouöld make sense.

But as the masses are the irrational crowds that they are I believe that if anything a degree in psychology would be of real benefit.

 

[forexup]

Just another note on Technical Analysis.

HSBC have a Technical Analysis department as do many other big names. I was sent this recently, the attachment job advert. Maybe someone here might give it a go.

 

[arabianights]

Long term ain't random!

It is chaotic at the least. Big things - those black swans - happen that could not be reasonably foreseen, and they're what moves things.

Most recent one I can think of - deepwater horizon.

And if you want to get philosophical about it... quantum theory destroyed laplace's demon...

 

[BSD]

Big things - those black swans - happen that could not be reasonably foreseen, and they're what moves things.

I very much agree with that.