All language subtitles for 1. Two Schools Of Investing In Stocks

In the stock market world, there's different types of stocks out there.

Some are big companies, some are small companies, some are technology, high growth companies.

Some are less growth.

But maybe they pay you some income or dividend.

There's different types of companies out there.

But when it comes to analyzing companies decide what to invest in or trade in, there's really two big

schools of thought, and that is fundamentals or fundamental investing and technical analysis.

So it's good to have a good understanding.

What's the difference between the two and where do you apply them?

In which situation?

So if we think about fundamentals, you know, that's where you're really looking at less frequent trading

and you're more looking at business fundamentals, right?

You're looking at the company itself, the markets there in what competitive advantages they may have

versus their their competitors.

What are they good at?

A lot of times the fundamentals are going to look at ratios.

If you've heard things like the price to earnings or PE ratio or price to book value, investors look

at that price to book value or peg ratio or dividend payout ratio, all these different ratios that

are out there.

That's fundamental analysis, really looking at, you know, ratios of business performance, basically.

And so it's fundamental analysis.

Think about it's all about evaluating the business, you know, and uses a typically used by, let's

say, longer term traders or longer term investors.

We're trying to look at a business and see how they might do over a longer period of time.

It may be they might be a less frequent in and out of a stock, typically not exclusively, but typically,

if we look at technical analysis, we're looking at organizations, we're looking at stocks, but we're

really looking at more of a supply and demand standpoint.

As far as what's happening with prices, are prices going up and down and what's impacting that?

What's the market sentiment around that?

You know, what's driving this moves the price.

And we're looking at things like trends.

Is there a certain trend?

Is the price trending up or is it trending down?

That's where we use a lot of things like charts and all that, because we're trying to visually represent

some of these things so we can see when we should we buy.

But also a very important technical analysis.

When should we sell, you know, so that in and out that an exit strategy is very, very important for

traders in order to make a profit.

And so it's all about recognizing indicators and patterns thing when it hits, just like the tools.

If this happens, then most likely this price is going to go, let's say, up, for example.

So because I see this indicator, I'm going to invest here, price goes up, I'm going to sell up here

because my indicator might tell me to sell to and then I make the profit between the two or I'm looking

at a certain chart patterns and I see like when we're looking like the candlesticks and things, I see

certain things happening.

I you know, I'm going to take action, either buy or sell action or maybe I won't do anything based

on this technical analysis.

And that's, you know, as far as as far as looking at indicators and things along those that nature.

So if we look at an example, how two people might look at this differently, one has a very fundamental

person.

You can combine the two, but let's say it was very focused on fundamentals and some of his focus on

technical trading.

Let's look at one stock as far as of how somebody might approach it or talk about that stock.

So let's say we have two investors and the one stock we're going to talk about, let's say example,

Tesla electric vehicles.

So person fundamental investing would say why they might want to invest in it.

They'd say Tesla is the dominant market leader in the super growing area for the future, which is EV

or electric vehicles, even though their stock price is relatively high or their price earnings ratio.

I think the future looks very bright and I want to buy now before the price goes up even further.

A technical person both also interested in buying the stock, might say Tesla's price just went above

its 50 day moving average.

Plus, Tesla is still near the channel bottom.

So trends look good and I'm going to buy.

So if you kind of break that down a little bit, you can see some of the words popping out.

Let's look at this.

You are the fundamental person looking at growth super growing here.

They're going to use a ratio, more feelings like I think the future looks bright where technical person

is not about feelings.

They're about technical.

They're about, you know, math and charts and market sentiment, those things.

So the price is above its fifty day moving average.

You know, the average prices over the last 50 days.

We're going to learn all about moving averages.

Don't worry.

And it's near the bottom.

So it's near a bottom price.

So they think the trend looks good, that it's going to rebound and go back up.

You know, so they're talking not about the business at all.

They're talking about it as that individual stock opportunity to invest in and get in and then maybe

later get out when they change their mind.

So a question might be, can you combine the two?

Usually people who are fundamentals, they stay that way.

Some people are really trying to stay that way.

You can combine the two.

I actually do combine the two two times.

In one way I would do that or people do is they might use fundamentals to narrow their choices of stocks.

You might use some of these things as a screen or like a stock screener to narrow down their choices

or they narrow their universe down by I'm looking at growth stocks or I'm looking at stocks in the electric

vehicle sector only because I believe in that sector, which has more of a feeling or a belief.

I believe in the sector of electric vehicles.

And then they'll use technical type information to determine if that was the optimum time to buy or

maybe when to sell.

So it's really a matter of style and strategy, too, and also a type of investor or trader you want

to be.

For example, a day trader would never really consider fundamentals.

They're trying to get in and out of stocks in the same day.

So then looking at long term prospects, they're looking at short term price movements to make a profit

on.

So the good news is with stocks, you can make money and be successful with fundamentals or technical

type of trading.

Either way, is can be successful.

It might be more.

About your type of style and all that, and you can combine the two as well.

Both have been proven to be very, very successful.