1. Based on our extensive research on past data, we are sure that fundamental analysis is the only way to make consistent (and very handsome) profits in stock market. So stocks should be bought for long term based on company’s fundamentals and valuations.
2. The technical trends work only a little better than a coin-toss and that too is most likely because a lot of people believe that they work, creating a small self-fulfilling prophecy. When we consider price changes with respect to benchmark indices and brokerage costs over a long period, it becomes even worse than a coin toss. This is why, we know many fundamental investors who have become very successful, Warren Buffet, being the shining example but no such technical trader.
3. Market is neither very efficient nor very inefficient. So at any point in time, we have companies which are not at their fair price. However in time, they tend to reach their fair price (and then they go off again, quite possibly in opposite direction). Another interesting thing is that the time required for this cycle has been reducing, most likely because of faster disbursement of information (and misinformation) through News channels, Internet, Mobiles etc. So long term is not as long as it used to be.
4. Most people, who follow technical trends and recommendations from so called experts, do so because they perceive it to be easier than fundamental analysis.
5. It is possible to make fundamental analysis easier and less intimidating than it is right now.