New York – The NYSSA is hosting a panel discussion on the merits of combining fundamental and technical research to provide more actionalble investment ideas. The event will be held September 24th and will start at 5:30 and run to 8:30 at the offices of the NYSSA.
The two disciplines, fundamental and technical, live separate lives on the trading floor and generally do not intersect. Indeed, the analytical processes could not be much more different from each other.
After all, technicians believe that all the information one needs is embedded in past price movements. Therefore, they rely on the weak form of the efficient markets hypothesis. Fundamental theorists believe that price is a function of value and that price and value are highly correlated, but not equal to each other at any particular point in time. As such, they are proponents of the semi-strong version of the efficient market hypothesis.
Fundamentals may eventually be correct if the data the analysis is based on is correct and the analysis is unflawed. But knowing that a security is undervalued is of little use, unless you know when to buy that security. This is where technical analysis steps in. In fact, the serious quantitative multi-factor models developed by Fama and French and Carhart (for example) all rely on a technical version of momentum to improve the predictive ability of these models.
An investor needs to know both if and when to invest in a particular security. If the “if” is determined by fundamental analysis and the “when” is determined by the technical analysis, what is keeping these two disciplines apart?
The NYSSA’s speakers include Laszlo Brinnyi of Brinnyi Associates, Jasmina Hasanhodzic, PhD, research scientist at AlphaSimplex Group, John Palicka, CFA & CMT of Global Emerging Growth Capital and Barry Ritholtz of Fusion IQ. The panel will be moderated by Robert Becker, CFA.