429week09f07

429week09f07 - Week 9 Oct 22 Technical Analysis Technical...

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Week 9: Oct 22 Technical Analysis Technical vs Fundamental Analysis TA Tools
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Technical Analysis Technical vs Fundamental Analysis Fundamental Analysis focus on “why” What drives value? What factors are changing prices? What information asymmetry acts in my favor? DCFs are the main tool– Replication is a hybrid Requires actual knowledge of the firm, the industry and the technology. Accuracy focuses around timeliness and depth of information acquisition Long-term “value” investors thrive—a firm that has real value will eventually realize that value Most of the best investors in the world are fundamentalists
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Technical Analysis Technical Analysis ignores “why” What can past price movements (even without knowing why) tell me about the future? Prices are what they are, take them as given Charts, graphs, and trends are the main tools— founded in quantitative finance Statistical modeling at the foundation Action is immediate so data and data crunching are a
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429week09f07 - Week 9 Oct 22 Technical Analysis Technical...

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