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Price is the only truth that matters in this world: veteran trader

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At the latest Yahoo Finance Premium webinar, JC Parets, CMT, Founder & Chief Strategist at allstarcharts.com, joins Yahoo finance's Jared Blikre to break down the benefits of technical analysis over fundamental analysis in the the short- to medium-term time frames. Not a subscriber? Start your free trial to join future webinars live!

Video Transcript

JC PARETS: Well, the only truth, the only facts in this world that we can count on is price, and everything else is an estimate or an opinion or, you know, a government release that's going to be, you know, changed, right. So like when the government comes out with unemployment and CPI and all that stuff, those are just estimates. We know they're going to be revised in the coming months and quarters. That's not [? the ?] secret. We know that.

So we know the information that they're delivering is incomplete information, number one, and estimates. What about fundamental research? Like [? lots of ?] these accountants-- I encourage you guys, if you guys think I'm completely full of it, go take out young accountants and take them out to dinner, take them out to lunch. Get them drunk, buy them a bunch of booze, right, get them talking. 23, 24, 25-year-old accountants that are doing these this auditing, they don't know the first thing about the things that they're auditing.

Ask them. They'll tell you. And it's like an ongoing joke internally at these accounting firms. So by the time to sell side analyst gets this research or gets the data, who knows what they're looking at, number one.

Number two, let's just assume that the accountants are good and they're getting good data. Then the fundamental analyst needs to go in there and figure out what these numbers mean and then come up with his own estimates or her own estimates, and there's too many variables involved. Forget all that. You can't trust it.

What about CEOs? They talk a lot. They say a lot of things. Many cases, they could just be wrong-- that happens-- or maliciously lying to you, you know, for their own selfish reasons. It could be either one of those. Both happen regularly.

So the only thing that we can actually trust, the only fact is that there's a willing buyer and willing seller at a specific price, on a specific date, at a specific time. And no matter what happens ever, that's not going to change. And we know mathematically-- I mean, you could use common sense by looking at charts, but we know mathematically that [? markets, ?] returns, don't fall [? under ?] normal distribution. Markets trend. That's why technical analysis works.

So instead of all that other stuff in the news-- don't even get me started. I don't know how that's helpful. They're in the distraction business. They're not in the information business. So the only truth that we can count on is price, Jared, telling you from the bottom of my heart.

Sure, there's some other stuff that might be able to help us, maybe. But the thing that we know will is the truth. And that's price.