If you want to get rich from the stock market, how do you do it? What strategy will you use? Is it value investing that warren buffet use? Technical analysis, or penny stock trading? All have different characteristic. What I know is value investing / fundamental analysis has lower risk and lower return. While technical analysis, and penny stock trading tend to be more risky but have higher return if you guess it all right. With value investing you can enter the market within a long period, like weeks. But in technical analysis, and penny stock trading timing is very crucial. You have to enter quick and exit quick.

What we can learn from this is, if you have lots of money like buffet had use fundamental or value investing. But if you just have small money, trade with technical analysis, buy penny stock, or swing trading. Once you have more money, that your movement will affect the price, change your strategy with fundamental analysis or value investing.

Tags: Fundamental Analysis, penny stock, penny stock trading, stock market, Swing Trading, Technical Analysis, Value investing, Warren Buffet

A company with good competitive advantage usually last long. A company’s long-term success is driven largely by its ability to maintain a competitive advantage. Some companies like Coca Cola and Microsoft have great competitive advantage. Coca-cola has its powerfull brand, and Microsoft has its dominance in computer operating software. Companies with competitive advantage bring wealth to their owner, like Warren Buffet, which own Coca cola’s stocks. Sustainable competitive advantage is gained by having a unique position which other company could not match or be the first at something and lead the market afterward.

Tags: Coca Cola, Competitive advantage, Microsoft, Warren Buffet

Technical analysis is done by looking at previous price, and volume data. Technical analyst look at past chart of price and different indicator to make prediction about the future prices. The human emotion is an important aspect here. Their willingness to buy stock at a certain price will determine future price. This analysis assumes that price moves at trend, and history repeats itself. It is believed that this analysis is more art than science. Because of that, there has been plenty of critics to this analysis, due to lack of evidence of it’s performance. But it is still a popular method in the world, through its easiness. Critics also came from well known fundamental analyst, Warren Buffet. It is also inconsistant with market hypothesis, like Efficient Market Hypothesis (EMH) and Random Walk Hypothesis.
How?
The most popular method used in this analysis is support and resistance, bollinger band, moving average, momentum, stochastic oscillator and indicator such as MACD. Moving Average is the average closing price. They also look at pattern at chart like the popular head and shoulder. There at a lot of software out there which can help you with this kind of analysis.
How’s the performance?
Sometimes it works sometimes it don’t. But due to it’s activeness in trading, it has high cost transaction. So you must deduct your return with this transaction cost.
For who?
Technical is for short term player. They are usually very active in their trades. Whatever the price movement, they can go in by going long or short. This analysis is easy to do, especially by looking at charts, making is a very popular analysis.

Tags: bollinger band, chart, Efficient Market Hypothesis, MACD, Moving Average, Random Walk Hypothesis, resistance, short term player, stochastic oscillator, support, Technical Analysis, Warren Buffet