Warren Buffet Not a Fan of the Charts - Agree or Disagree?
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Thread: Warren Buffet Not a Fan of the Charts - Agree or Disagree?

  1. #1
    Buffett once remarked, I understood technical analysis didn't work when I turned the charts upside down and didn't get another answer.

    However, Buffett discovered one little problem. Technical analysis didn't work. He explained, I understood that technical analysis didn't work when I turned the chart upside down and didn't get another answer.
    Following eight decades of trying, he reasoned that it was the incorrect way to invest.
    Do you agree or disagree?

  2. #2
    well. . That does not mean he knows how to use them. Can he know if they don't get the job done? I state it's possible and convinced probable but it's surely not sure.

  3. #3
    So far as I know, Buffet is a long term trader (actually, investor) that is where the fundamentals are greatest. According to my understanding the technicals may be used for long term investing but it is not better in forecasting the market than the fundamentals.
    Technical analysis is better used for short term trading. Fundamentals is better for long term investing (and as it is long term, it is called investment, not trading!)

    I could be wrong so choose nothing I have written as 100% true.

    Edit: then we also have to define what means long term. Can it be 1-2 decades or several decades?

  4. #4
    Buffet is an investor, not a trader. Makes sense he would say that. Apples and oranges.

  5. #5
    The only real difference between TA and FA is that one looks at trends in price and latter observes trends in financial reports and earnings. Any analysis of tendencies will be correct sometimes. They work, just not all of the time.

  6. #6
    Interesting points about the distinction between trading, investing, and buffett not understanding how to utilize TA.

    To Create a case for Buffett. I've never heard or seen of any hedge funds or fund supervisors using TA to exchange.
    I've also not seen much fund managers/analysts on Bloomberg basing their commerce recommendations or analysis on TA.

    Wall St, in which big money is, nearly fully uses FA. With the occasional TA utilized to encourage the fundamental notions.
    Anecdotally, we see nearly fully TA on retail trading forums.

    If TA was very profitable, should not we find lots of exclusive TA hedge funds and fund managers?

  7. #7
    Quote Originally Posted by ;
    As far as I know, Buffet is a long term trader (really, investor) that is where the fundamentals are best. According to my understanding the technicals can be used for long-term investing but it's not better in forecasting the market compared to fundamentals. Technical analysis is better used for short term trading. Fundamentals is better for long-term investing (as it is long term, it's called investing, not trading!) I might be wrong so take nothing I have written as 100% authentic.
    Hi, I agree with you. There's a HUGE differences which are over looked between trader and investor. Investors generally would have a'buy' bias as the instruments they choose, by way of instance that the SP500 Index. In case you've invested in the SP 500 index before 1996 to now or 2009 to now YOU could have made money. Things like equities will be inclined to gain intrinsic value over time. Now traders perhaps cant be bothered waiting 5, 10 or even 20 years so they choose instruments that move quicker, but as a compromise these instruments do not profit inherent value over time. So like the EUR/USD, over that exact same period it dipped down and up returning to the worth YOU could have purchased it at if you geld it like a investor. So traders need to get out before it returns to their buy or sell price and technicals can give some warning in my view. Furthermore, these instruments selected would have no raising intrinsic worth as it is fiat related, it merely a word which sais that something has value so if the term is not taken seriously anymore, any USD which I held for example could be worth 0. When I had a company or a product, it would have some worth or bartering possible. This is my opinion and should not be taken as trading information or taken as 100% right.
    Finally, Ofcourse Warren will see NO difference if he turns a chart for something which has inherent worth upside down (guessing it is exactly what he is mainly looking at) as it most likely will only go up over the LOOOOOOOoooooooong term. Now if you show him a chart for crypto or any exotic forex pair, I am sure he'll see it moving 2 ways. Long story short, I disagree and agree with warrens remark as the CONTEXT is essential. He didn't define what type (or kind: Forex, equity, instances he ate a McMuffin) of charts he was looking at.
    Kind Regards,

  8. #8
    Chart is your price's historic statistics.

  9. #9
    Quote Originally Posted by ;
    If TA was really profitable, should not we find lots of exclusive TA hedge funds and fund managers?
    The reason for this is since TA is generally more successful as a short term egy. For the long run, fundamentals are exceptional. Because big fund managers cannot dart in and out of stocks similar to this, TA is generally less valuable for them. They go money and would move the market too much just by entering and exiting their positions. That would lead them to a ton of slippage and result in losses. Retail investors are nimble enough to use short term TA techniques to profit in this manner due to their little $$$.

  10. #10
    Warren Buffet meant to say technical analysis does not work for him. (He is a fundamental analyst) It does not apply to somebody who knows how to read charts right. Concentrate more in price action maybe someday you might see the light.

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