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Financial Securities Analysis

This document contains 2 reports: Project 1 ù The Technical Analysis and Project 2 ù Fundamental Analysis. Each report has independent page numbering and its own reference page.

Introduction ............................................... 1

Description of Technical Analysts ........................... 2

Strengths and Weaknesses of Technical Analysts .............. 2

Assessment of Technical Analysis ............................ 3

Why Technicians Are Still Hired ............................. 4

Discussion of Selected Technical Systems .................... 5

Conclusion .................................................. 9

Reference ................................................... 10

This report reviews the approaches to financial securities analysis that are grouped under the term ôtechnical analysisö. Technical analysts are financial securities assessors who have no interest in the company that underlies a financial security or of the financial performance of the underlying company for the merits of such performance. Rather, technical analysts are numerologists whose behavior is as different from fundamental analysts as the behavior of astrologists differs from that of astronomers. Malkiel (2004) refers to technical analysts as dreamers. In a sense, he is correct in this assessment; however, technical analysts employ elaborate mathematical models to persuade themselves that technical analysis is an objective exercise, while shielding (from themselves) the fact the past trends that they identify are extended into the future on the basis of subjective wishful thinking.

Technical analysts chart the past prices and trading volumes of equity stocks. They identify trends in these data, and they then use the trends to make predictions about future market prices of the equity securities. Trend extension is, however, a problem for technical analysts. They can use a simple predictive equation; howe...

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Financial Securities Analysis. (1969, December 31). In LotsofEssays.com. Retrieved 03:50, March 19, 2024, from https://www.lotsofessays.com/viewpaper/1711832.html