Fundamental & Technical Analysis can exist mutually. Former tells us the right stock to buy and later, tells us the right time to buy.
So technically, they both have equal gravity BUT sometimes you just need to ignore them and rely on common sense.
These 2 types of analysis depend on historical numbers but unfortunately, we are not in past. And history is not the interpreter of future.
In past, Wall Street has ruled out all manufacturing companies like GEICO, Walmart etc and now, Google, Facebook, Apple etc.
Fundamentals & Technicals of old companies are not bad but they were ruled out by modern world economy which is ruled by Tech companies.
Amazon is reporting loss since last 20 years BUT Investors Don’t Seem To Care
BUT still, it’s the Investor best choice. Heavy appreciation in Amazon shares helped Bezos to beat Warren Buffett on the list of Top Billionaires.
See how the shares of Amazon shored up by 250% in last 5 year:
Now, if we fundamentally look over this thing then we should not invest in this stock because the company is not earning a dime since last 20 years.
Loss. loss. loss straight 20 years. DO this looks like an opportunity?
So sometime we just need to piss off the rigid criteria and make our decision based on simple common sense.
Like Amazon is not losing money now but the future potential of the company is robust. Surrounding moat is also awesome! They are intact from their ant like competitors.
So the bright future of company is discounted in the current stock price. Remember, the stock prices are the reflection of all the future predictions. You know that how stock dance when they beat or heat the market estimates.
However, company is currently focusing on expanding their market. More than 50% of their expense account for Sales & Marketing but once they reached to their saturation level, the company will surely earn a truckload of money.
That’s just a thing of simple common with no statistics involved. No technical analysis. No fundamental numbers crunching.
Couple of months back, I made an Investment (NIIT Tech) on just one single reason without looking at the financials or charts. Find out here what was that reason.
That’s why sometimes General Humour have more gravity than other 2. However, they both can also mutually exists. Remember, the concept of right stock and right time.