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Pixar Animation Studios (PIXR) Message Board

  • mark_bert mark_bert Mar 24, 2003 11:13 AM Flag

    Why I just can't buy into TA

    I think the overwhelming reason I can't buy into the chartist thing is that it just doesn't seem to have a rational basis to me. From everything I've seen about using the charts, it basically comes down to the idea that after a certain move or series of moves, a stock will historically move in a given direction. Am I correct up on this?

    This just seems like an unreasonable connection to me. This methodology seems too much like confusing coincidence with causation. Just because the something has a record of coinciding with another event has absolutely no bearing on whether it will happen again. It's too much like the Super Bowl theory where the market goes up in years of an NFC win. Documented coincidence, not causation.

    At least by using fundamentals there is something that can be linked to cause and effect. A company has good sales and profits. It has low debt and cash on hand. These are things that signal a well run company that should increase in value. Does it happen all the time? Absolutely not, but at least there is something there that gives a reasonable expectation.

    Aldo once posted something along the lines of "the charts predict the future movement of a stock". I just can't buy into that in ANY way shape or form. Charts can do one thing: show what the stock has done in the PAST. The can be a tool to see how a company has performed during certain situations and this is valuable information but in no way is it a predictor of the future.

    This is along the same lines as Infidel's insistance that PIXR always has a sell off six months into a picture release. His contention is that it will happen because it always happens. Sorry, but I just can buy the argument of "that's how it's always been done". Will it happen again? Maybe, but that's not enough of a reason for me to risk any money on it.

    If one of the TA people can give a good reason why TA works without resorting to the old "if you can't see it, you're just an idiot" line and provide something more substantial than "it's worked in the past, it will work in the future", I'm happy to listen. If not, I'll just stick to my old fashioned way of evaluating a company on its business practices.

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    • A price that won't be held back by war.

      YE$$$$$$$

      Short Squeeze A'Coming

    • mark_bert writes:

      This is along the same lines as Infidel's insistance that PIXR always has a sell off six months into a picture release. His contention is that it will happen because it always happens. Sorry, but I just can buy the argument of "that's how it's always been done". Will it happen again? Maybe, but that's not enough of a reason for me to risk any money on it.

      ---------------------------------------------

      When infidel3000 insists that, he is doing FA, not TA. One of the problems with the argument between these two flawed theories is that the practitioners are not 100% sure of which is which.

      • 1 Reply to mr_pixar
      • i agree that predictable patterns of Pixar ownership,
        directly due to the anticipated success & popularity of their next release,
        do fall into the "fundamental" camp.

        fundamentally further, i predict ((w)holeheartily, as hedging is for any afterlife)
        that INCREASING LONGTERM ownership by the growing number of film by AND financial FANS)
        which is directly due to THEIR anticipated success & popularity of Pixar's FUTURE products/productions,
        will result, longer term, in a dramatically appreciated share price chart pattern.


        don't mind me - choose your own illusions...but for my money
        it narrows to a "yes or no", "success or failure" type of investing posture.

        shitsky maritsky...it even more simple than that:

        there are those who OWN equity in Pixar Animation Studios
        and those who don't.

    • TA is not predicting "future movement". TA is identifying trends so that you can tell when the endpoints are near. Also, it is a discipline of setting investment limits and targets so that your judgment doesn't get affected by emotion.

      TA, like fundamental analysis, is strongly biased by past performance. Momentum traders don't care much for either of those techniques.

    • Reading a book on TA is like reading a book on playing blackjack to win.

      What it comes down to is a consistent trading strategy, and stop losses. By always limiting losses, and taking quick gains, the theory follows that you'll come out ahead. It's parallels the betting strategy on blackjack. The problem with that theory is trading costs and taxes. You need to trade often, which means the trading costs cut into your gains, and then you're constantly paying taxes because if you have gains, they're all short term gains.

      Does TA work? No more so than hitting when the dealer has a 10 showing.

      Agree anout your statement on fundamentals - it's the best investing and trading strategy.

    • by the way trading involves percentages not absolutes...so it makes sense for an established pattern to continue until the time when it doesn't...now that shouldn't be very hard to understand...

      • 3 Replies to infidel3000
      • <<by the way trading involves percentages not absolutes...so it makes sense for an established pattern to continue until the time when it doesn't...>>>

        My point exactly. If the whole idea is that the only basis for expecting a result is that it's been done before is just not reason enough for me. At that point there seems to be too much of a chance that you're simply chasing performance rather than evaluating the factors that drive performance.

        But hey, it's your money. If it works for you, have at it.

      • ...nothing like being lectured by a loser.

        there no way to compromise "investing on fundamentals"
        with "trading (gambling) on TA"...they're two completely separate endeavors.

        mark, your post was sensible and correct - go with what you know.

      • Inf writes: "by the way trading involves percentages not absolutes...so it makes sense for an established pattern to continue until the time when it doesn't...now that shouldn't be very hard to understand... "

        The trading pattern I recall always had Pixar starting at $30 then fluctuating between $30 and $50.

        Pixar often held in the mid thirties for several months

        This is the first time that I've seen Pixar hold up in the low fifties for "Four Consecutive Months".

        Of course, wasn't Pixar added to the NASDAQ 100 four months ago?
        Ah, something that the almighty inf never predicted
        And look, now we have a new trading range

        Inf, you have probably done okay trading the patterns
        Yet you often refuse to acknowledge the events that cause the patterns

        Kathy stick-up-her-butt-prudentidiot has always been the number one reason for the sell off
        Of course, she always pimped it up before she gave her final dump.

        This year Kathy has not offered her new-film-a'coming upgrade
        Without the upgrade, she doesn't really have the room to downgrade
        Perhaps the cycle will be broken

        GO PiXAR

    • try actually educating yourself...my fav stock books are 1) trading for a living - elder 2) reminiscences of a stock operator - lefevre...maybe others can make further recommendations that they have found useful...

 

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