Due Diligence
Before we make recommendations to our clients, we need to conduct our due diligence on the components of prospective portfolios. We simply cannot recommend a particular stock or corporate bond without first assessing the security at the deepest possible level.
Our analysts are seasoned professionals skilled in the art of getting to the information that counts when it comes to investment. They deploy technical analysis which enables them to suggest the best time to acquire a stock within the context of its position in its long-term trend.
Technical Analysis
In laymans terms, technical analysis looks for order, rhythm and patterns in the price action of a security and takes no account whatsoever of the fundamentals. It assumes that the price of the security at any one time is based on the markets perception of any and all information pertinent to it whether that be annual results, profit margins, earnings or even merger rumors.
Patterns can be identified in stocks or financial markets, while it can also apply to other markets such as real estate, or the supply and demand of services.
Looking back into the past, you will see that many technical strategies have picked some very profitable moves. Hindsight is never wrong. You may see pattern / design as clear as day, although the trouble with this is that it may be one pattern in 100. 100 different patterns on a daily chart may span over 10 years, meaning that you select one every 10 years.
Fundamental Analysis
Our analysts also utilize fundamental analysis. Fundamental news drives markets but our interest here is for the long term so we focus on information like the companys sales, its debt, its earning and so on.
This is effectively the forensic side of the process where we look at the inner workings of the organization, assess management and how the business is run. We look at the industry sector as a whole and try to gain a picture of where it and the subject company operating within it will be in the future.
Anecdotes
Often, one needs to step back from the technical and fundamental analysis and look at the market from a simpler perspective. It is possible to over-analyze and, in so doing, to miss the big picture.
To Graham Walker's analysts, anecdotes are great identifiers of how markets affect the collective psyche of an economy. As a general rule, by the time you see it in the paper or hear it from someone that generally has no idea, the game is up.
An anecdote is an incident or narrative that applies to the market in a rather perverse way. Why perverse? Because markets will never move in a straight line and the moves are psychological as much as anything else hence, the terms bulls and bears.