Category: Your Money

5 Measures to Ignore

The New York Times of November 10, 1919, repor...

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Previously, we had discussed what to look for while buying stocks. Irrespective of whether you are fundamental or technical investor, there are some key metrics that you should follow to screen stocks. However, even though some metrics have complicated math, they can be completely misleading when it comes to their predictive power. 

Measures like Beta, Analyst Recommendations, P/E and PEG typically have very little bearing to how the stock eventually performs. To read more about the 5 measures to ignore while screening stocks, hop on over to Smart Money here.

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Why Charts?

“Technical Analysis, which refers to the study of the action of the market itself as opposed to Fundamental Analysis, which studies the goods in which the market deals. We, as technicians, focus our attention on price because that’s the only thing that’s going to pays us, nothing else.”

“Fundamental guys study the cause of market movements; we choose to focus on the effect. All known facts, estimates, surmises, and the hopes and fears of all interested parties are integrated in this effect (price). The Fundamentalist always has to know why, but why doesn’t pay us.”

Must read: Why Charts? | The Reformed Broker.