Technical vs Fundamental

[Enzed]

Hi Guys - Is there anyone out there who buys if the fundamentals are right even if the technicals are not looking so good?If time horizon is the determining factor - what is the cut off - 1 Year and more?? Or is it always better to buy when the technicals are in your favour? Warren Buffet said on TV the other night something along the lines of "Do not be put off buying the right company because it is expensive " Very loose quote I'm afraid!!Cheers.

[Werner_1]

For me it depends what the technicals are saying. If it broke some resistance and technicals suggest a long downturn and earnings are climbing and business managment is operating very well, i would buy. I think Warren Buffett would buy a company that has excellent earnings power, and at a good price, he will not buy something that he thinks is very expensive. he runs calculations (in his head without calculator) and determines a value, if that offers a margin of safety he would buy, if not he wouldnt. I dont follow technicals that much, but do look at the chart briefly before buying though, but without much analysis, just like to compare where the shareprice is compared to the earnings, i make my own chart overlaying earnings and dividends, this makes one see how the relationship between the shareprice and fundamental data is, that drives my decisions much more than anything technical... i only buy companies i really like, trust management 100% and believe there is potential over long term. i hope this helps.

[richardw]

Yeah, I would. Over many years the daily/weekly/monthly TA won't affect your long-term returns much at all, except in the case where there's a huge drop or rise. If it drops, you buy more.

[#4]

I'm with Werner on this one. I analyse a company that I understand, like the management style & that has good fundamentals over a 10 yr period. Then after determining the price I am prepared to pay, I wait until the market acts irrationally & the price moves towards my level. Before I buy I look at the chart to see if its trading down or up. If up, I buy immediately, if down I post a cheeky trade valid for a month at a level that is roughly 10% cheaper than current values. Then if it pings, I'm in at a good price, if it moves away, I simply cancel that trade & buy at current value. Most important is to understand the company you are buying & to be happy with its past track record & that you are clear in your own mind that given current conditions & management style, past glory will translate into future profits. As my dad says "Why worry about BIL if its R200 or R195 when I bought it at R21?"