Leonardo Da Vinci once said that simplicity is the ultimate sophistication. Let’s take a moment to ponder that. This applies to research analysis as well. When you hear people talking about some sophisticated trading system or some flashy indicators or some complex wave projections, think again. It is more likely to be smoke and mirrors. […]
In order to derive meaning from life experiences, people have developed an innate propensity for classifying objects and thoughts. When they confront a new phenomenon that is inconsistent with any of their preconstructed classifications, they subject it to those classifications anyway, relying on a rough best-fit approximation. There are two main types of […]
When newly acquired information conflicts with preexisting understandings, people often experience mental discomfort – a psychological phenomenon known as cognitive dissonance. Cognitions, in psychology, represents attitudes, emotions, beliefs, or values; and cognitive dissonance is a state of imbalance that occurs when contradictory cognitions intersect. This term encompasses the response that arises as people […]
One aspect of market analysis is statistical analysis, which is using statistics to find correlations and patterns, where opportunities of skewed probabilities may lurk, giving you an edge over the market in the long run. For investors, this lets you know the best month to start building your portfolio, or to rebalance/adjust your portfolio allocation. Seasonality […]
There is a general misconception that chart-reading and technical analysis are only for short-term traders, but this is not true. Investors who learn to read charts and adopt long-term trend-following techniques can achieve superior returns to a pure buy-and-hold investor with the added benefit of taking on less risk. Why the traditional buy-and-hold […]
