I have been reading an excellent book written by Anthony Hughes, Geoff Wilson, and Matthew Kidman, entitled “Masters of the Market”.It is most readable, and it features the experiences and strategies of 13 of Australia’s most successful fund managers.
Of particular interest to me was their reliance on careful fundamental analysis for stock-picking to the exclusion of technical analysis, which they found unhelpful.
Successful fund managers are prepared to back their detailed assessment of a company’s true value in the face of market over-reaction.
Investors without such expertise in fundamental analysis may however be able to use technical analysis to detect institutional accumulation of stock, and to then be on the look-out for price breakout.
There is safety in waiting until there is clear evidence of trend reversal before taking a position.
Categories: Trading opinion