Technical vs Fundamental 2.0

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A few years ago, I posted a blog about Technical vs Fundamental Analysis.

Those were the days, when I was very new to Markets, so I explored everything from intraday, FnO, swing trading to long term investment.

In Intraday, Fno and Swing trading, the toolkit used is of Technical Analysis a.k.a. Charting. The objective here is to identify price trends based on historic prices and forecasting the trends based on them .I read various books, learnt various strategies to do technical analysis and, got some returns as well.

In Long term Investments, the toolkit used is of Fundamental Analysis to find Value and Growth stocks by understanding the business, to calculate their intrinsic value or growth potential and invest in those stocks for long run. Got a boost in this in last 6 months, as got exposure to equity research in my Articleship.

My Experience:-

Intraday/Swing - 

To earn returns in this, you should be actively engaged in markets (and concept of engaging for 1-2 hour a day is ****), which was difficult for me.

It provides you returns, but.... If you buy a stock at 5 sold at 6, bought again at 11 sold at 13, bought again at 24 sold at 26. You earned - 5 Rs, as against if you would have stayed invested, You would've earned 21 Rs, that too without tracking the price chart whole day. 

Also, personal growth, knowledge enhancement and other practical skills are on the backfoot.

It's the game of psychology and emotional control.

Long Term Investment -

At first, I learnt about analysing the business, knowing the whole structure of how the business operates, what are its KPIs, what are their profit centres, how much is the future potential etc. etc.

Then, after finding a good business, available at attractive valuations, Invest in it for long term. We just have to keep track of the portfolio companies if there's any news, if the company is growing as expected.

Remember, in long term Investment , it's not quick money, so to make good money in this is you've to start with a decent amount of initial capital.

(By this, I don't want to demean any of the ways of investing, these are just my personal initial experiences of last 2-3 years in stock markets.)

Signing off for today

Devansh Singla  

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