Buying based on fundamentals seems more reasonable than examining recent price charts. The technical analyst is assumed to have a simpler job because one can reasonably argue that a history of prices is a limited and simplistic signal, whereas for the fundamental analyst, there is a much wider and deeper array of financial information to digest and consider. But … does effort and sophistication really matter? .… The aim of active investors is to beat the market. Active investors should focus on the scientific method to address a basic question: what works? Warren Buffett obviously showed that value investing, irrespective of technical considerations, can work. George Soros and Paul Tudor Jones showed that technical analysis can work just as well. An ever-growing body of academic research formalises the evidence that fundamental strategies and technical strategies both seem to work. Many dogmatic investors, however, looking to confirm what they already believe, selectively adopt the ...
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