I used to be begin into technical analysis. I still find it interesting, but I certainly will never rely upon it. It’s about as useful as looking at goat entrails when it comes to purchasing stocks that will be gain in value over time.
That said, I just wanted to revisit a prediction I made in April this year based on a chart I created of the S&P 500. With the S&P at 1400, I predicted another steep drop to about 1200 in the coming months. Well, It looks like my prediction came true.
Of course, there were a multitude of factors that contributed to this outcome. It wasn’t just the chart and it wasn’t my extraordinary intellect. It could be luck. It’s probably just my belief that financials were going to get much worse before they got better, and that they drag down the rest of the market with them.
After reading Buffett and Graham, I’m now more wary than ever about trying to predict the future; it’s simply not a productive use of time. Time is best spent researching stocks in order to find which are undervalued and present a bargain and margin of safety.
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