There is a moment in time when realization becomes so big and so impactful that it must be shared. The birth of 360 Investment Research was the result of such a moment. Started in April, 2014, it is the brain child of David Zarling, who after many years of studying and participating in the financial markets using fundamental analysis, realized this method of analysis was not sufficient for managing risk and maximizing gain, the hallmarks of successful investing.
While fundamental analysis culminates in an opinion, one needs to understand that the marketplace doesn’t care about a singular opinion.
While fundamental analysis culminates in an opinion, one needs to understand that the marketplace doesn’t care about a singular opinion. It cares only about the manifestation of the collective opinion of the marketplace; also known as price. Only by studying price (aka technical analysis) can an investor understand the demand and supply dynamics in the marketplace and be able to identify investment entry points where risk is asymmetrically reduced in comparison to the potential reward.
360 Investment Research uses top-down technical analysis to provide its members the same edge David Zarling found. This approach has proven itself useful in providing investment returns in any market environment; up,down, or sideways. The proprietary methods used by 360 Investment Research is anchored in price, which is a fact, not an opinion. Price is determined solely by the interaction of supply and demand.
More supply than demand, price goes down. More demand than supply, price goes up. This is economic law. Supply and demand are governed at any given moment by many hundreds of factors, some rational and some irrational. Information, opinions, moods, guesses (shrewd or otherwise) as to the future, are all inclusive during the process of price discovery. No ordinary person can hope to grasp and weigh all the aforementioned, but the market does this automatically. When supply and demand are at work, when two parties, bidding and asking, agree on price, they are agreeing on value. So price, whether we like it or not, is the final arbiter of value. And by using technical analysis to study price, we are able to give ourselves an edge in the marketplace.
When you and I enter the stock market, we are going into an extremely competitive field in which our evaluations and opinions will be matched against some of the best minds in the business. We are in a highly specialized industry in which there are many different sectors along a massive spectrum of investable securities, all of which are under intense study by men and women whose economic survival depends on their best judgment.
Advices, ideas,opinions, and suggestions will come from many smart market participants. And unless we are able to develop some market philosophy, or decision framework, of our own, we will not be able to tell good opinions from the bad, or wise judgments from the unsound. In our case, the market philosophy and investment decision framework we choose is technical analysis: the study of price.
The impact of this investment decision framework is too good to keep for ourselves. We just had to share it. Enjoy.