Why Fundamentals? #2

Feedback from Nick Glydon:

“I believe people still “prefer” fundamentals because they are striving for intellectual stimulation. You don’t sound very interesting at a cocktail party if you say Glaxo is going down “just because it is”, whereas if you can talk about cancer drugs, etc, etc, blah, blah people think you are interesting. Goldman’s salespeople can talk for hours about cancer drugs, Chinese GDP, and US housing data – they too like to seem “intelligent.” You have to ask “what are you trying to get from markets, money or perceived intelligence?” By the way, I am an technical analyst working for an institutional broking firm in Europe. Plenty of clients do follow our trend following advice, but very very few follow it exclusively – most try to “marry it” with fundamanentals of one sort or another. I also believe trend following works better in equities than in most other markets, as there are very many individual stocks which double, and double again – it doesn’t happen that often even in commodity markets. I’ve been a trend follower for 20 years! I like your book by the way, but the one I give the most to clients is still the O’Shaughnessey one – proves better to my audience that momentum matters. Cheers, and keep up the websites – very useful stuff.”