- In general, my research shows that the market is not completely efficient. It is possible to find, and profit from, information that has not been arbitraged away.
- Keeping up with all the political and economic developments that are affecting the market is important, but in addition we need to study the market itself.
- In general I believe the best way to reach investment conclusions is by using an ongoing, comprehensive research process, including a global macro overview, company fundamentals, and a technical analysis component.
- The technical component involves using high quality charting software to review the overall market, sectors, and stocks on a regular basis.
- In order to put together the pieces of the puzzle, a top-down, rule-based approach can be very effective. In other words, first we analyze the overall market, and based on the market condition, we make decisions regarding sector weights and stock selection.
- Examples are shown in the white papers I have written. For more detail, please see the articles under the heading “Excerpts from White Papers” at the to of this blog. For example the article “Investment Strategy Case Study” shows an example of analyzing the market, sectors, and individual stocks in a coordinated way.
- This approach is not a black box “system.” It involves professional judgment, experience and insights. It is simply a logical way of consistently applying proven investment principles, including many that were used by William O’Neil and others to create excellent investment performance over many years.