A need to be critical about my own style

It's been some time since I last update this blog and if anyone is reading, I'm am truly apoletic about it cos I am really just too busy with everything recently from work to study and lastly tuning my own investment style. I had a detailed discussion with my brother last week on investing strategies because we were contemplating of a merger(Sound likes a coroporate move eh haha) and although it is called off in the end but still I have learned heaps from it... My brother is an advocate of using trends and charts to make trade decisions and up to date, his system has proved to be efficient and applicable and that really inspires me though I'm a firm believer of fundamental analysis.. I know I will be flamed by some people because a true person who used fundamentals will think that charts are useless and all informations it displayed are not related to the company at all.... I used to think in that direction too but well, actually market price does affect the company fundamentals at all.. Have you wondered, if the stock price performed well in the market, the company can receive more money from issuing placement shares and the proceeds can be used for reinvestment which will beneft the business and improve their financial health too and from then, it might trigger the buying indicators for people who fundamental analysis. So as you can see, everything is interlated and maybe technicals and fundamentals are related too?

Let us imagine one scenario, one fine day, you have found a good fundamental reason but recently, this stock suffered a drastic slump in price but the market is still rising.. So what's the best course of action? Taking a position in this stock by going against the crowd or stay out from it until it forms a good trend again? In this situation, I will sniff out the possible cause of this and use my own judgement to determine whether if this is an overreaction from the market. Follow by that, I will compare the current value with my own derived intrinsic value of the company that I have calcuated prior to the purchase. Well, I used to buy the stock when the market value is below the intrinsic value and this system sounds plausible but will I allocate all my available funds to the stock? This links to another question, money allocation and how certain I am that my analysis is correct considering that all the information that I'm using is publicly available. Did I overlook some factors or my I just too optimistic in the company's prospect when I'm calculating the intrinsic value?

I still have more to write on this topic but due to time constraint (only a couple of weeks left to my cfa level 1 exam), I guess I have to continue next time. In conclusion, I think an one dimensional approach can't be taken towards investing and one has to be more opened to other methods and style to adapt to today's market but having said that, I'm still more inclined to fundamental analysis. Remember, stock market is a zero sum game so by understanding different trades, it will only do you good..

Weakness in my current System
1. Position Sizing ( Has to find a way to allocate funds to each counter systematically according to my confidence. Ways to quantify my confidence level)
2. Selling (Well, I do not have a clear set of rules for selling.. Maybe I will set weightage to different factors in calculating intrinsic value and allocate a small portion to market sentiments?) 3. Quite comfortable with picking good fundamental stocks but as for the entry price, I am need to fine tune it.... Taking a conservative or aggressive approach?
4. Not to pick stocks on intuition again! Recently, I have been picking stocks based more on intuition rather than analysis. I still do analysis on them but only at a basic level.. Well, the results are mixed but I have decided to trim down my porfolio by selling all the stocks that I bought on impulse.

Link
My brother's Blog