Constituent investment research should determine desired exposure and acceptable exchange terms, while a separate market-path and execution analysis tests whether issuance and liquidity arrangements can retain value through adverse trading conditions.

backsUntitled source

Would it were so simple. In the real world, causes are usually obscure. Critical information is often unknown or unknowable, as when the Russian economy trembled in August 1998. It can be concealed or misrepresented, as during the Internet bubble or the Enron and Parmalat corporate scandals. And it can be misunderstood: The precise market mechanism that links news to price, cause to effect, is mysterious and seems inconsistent. Threat of war: Dollar falls. Threat of war: Dollar rises. Which of the two will actually happen? After the fact, it seems obvious; in hindsight, fundamental analysis can be reconstituted and is always brilliant. But before the fact, both outcomes may seem equally likely. So how can one base an investment strategy and a risk profile entirely on this one dubious principle: I can know more than anybody else? In response, the financial industry has developed other tools. The second-oldest form of analysis, after fundamental, is "technical." This is a craft of recognizing patterns, real or spurious—of studying reams of price, volume, and indicator charts in search of clues to buy or sell. The language of the "chartists" is rich: head and shoulders, flags and pennants, triangles (symmetrical, ascending, or descending). The discipline, in disfavor during the 1980s, expanded in the 1990s as thousands of neophytes took to the Internet to trade stocks

backsUntitled source

It could be concealed or misrepresented, as during the internet bubble or the Enron and Parmalat corporate scandals, and it can be misunderstood. The precise market mechanism that links news to price, cause to effect, is mysterious and seems inconsistent. Threat of war, dollar falls. Threat of war, dollar rises. Which of the two will actually happen? After the fact, it seems obvious. In hindsight, fundamental analysis can be reconstituted and is always brilliant but before the fact both outcomes may seem equally likely so how can one base an investment strategy and a risk profile entirely on this one dubious principle I can know more than anybody else in response the financial industry has developed other tools. The second oldest form of analysis, after fundamental, is technical. This is a craft of recognizing patterns, real or spurious, of studying reams of price, volume, and indicator charts in search of clues to buy or sell. The language of the Chartists is rich.