In an interesting session as a part of the highly popular Face2Face series conducted by Elearnmarkets, Mr Vivek Bajaj, Co-founder of Elearnmarkets, invited Mr Rohan Mehta, a successful investor, to decode his Super Successful Techno Funda Stock Market Strategy.
In today’s blog, let us discuss the techno-funda stock market strategy:
Table of Contents
What is the Techno Funda Strategy?
The Techno- Funda method is becoming more and more well-liked since it makes use of the best practices demonstrated by both technical and fundamental analysis. Investors typically make poor decisions based on incomplete information when they choose one side and disregard the other.
Data streams are involved in both technical and fundamental analysis, and while it’s crucial to disregard the noise when making decisions, it’s always helpful to know both sides of the story.
Investors can examine both sides of the issue and make well-informed judgments while pursuing large returns thanks to Techno- Funda analysis.
Investors can use the Techno- Funda technique to learn more about the specifics of the equities they own. To make better judgments, they can, for example, utilize the fundamental method to comprehend the business model of the organization and combine it with technical knowledge, such as the demand-supply equation.
The approach’s proponents contend that using Techno- Funda analysis yields superior outcomes to only adhering to the technical or basic approaches. The question of why Techno- Funda is not used more often now emerges.
The primary distinction in this case is that, although technical analysis typically focuses on a shorter-term outlook of a few days or weeks, fundamental analysis is more concerned with time horizons of a year or longer. Consequently, you will need to find an ideal solution to this timing mismatch if you really want to invest according to the Techno-Funda method.
Price-Profits-People-PPP Investment Process
Let us discuss about this Strategy-
1. All-Time-High
In this strategy, we buy the stock when it crosses the all-time high after a long period of consolidation. Let us take the example of Larsen & Toubro Ltd.
In 2007 it was quoting around Rs. 1000, and in 2020, it was trading at Rs. 1300. The stock’s price was at an all-time-high during that time and trading in the range
2. Profit – Profit at ATH
The second factor that comes into account is Profits. Larsen & Toubro was trading in the range, but let us see if this company is making profits or not. In March 2023, the company’s profit was 3x.
Now, let us come to the macro factor-
3. People
After analysing the price and profits, it is time to meet management, talk with people- employees etc. to inquire about the company’s performance and turnaround. To find the answer of
“What is Turning around in your company”?
Examples
Below is a list of stocks that are filtered out by using the All-Time-High scanner. But how to find out which stock is better than another?
If the stock is making an All-Time-High, then assign a score of 5, if the stock is making Profits, then assign a score of 4, all-time-high sales, then assign a score of 3, if EPS is bigger than P, then assign a score of 3 and if the latest quarter profit is at all-time-high then assign the score of 1.
If the stock breaks out from a long consolidation, then assign a star. If the score comes above 10, then only we will invest in that stock.
You can watch the full Face2Face Video here-
Bottomline
The Techno Funda strategy can help you outperform the market if you have a strong eye for analysis and are eager to study the specifics of the industry. Because you will not be constrained by the shortcomings of either of the two popular investment methodologies, you will find yourself ahead of the curve.
Instead, you may combine the finest features of both strategies using Techno Funda research to create a portfolio that is well-positioned for long-term capital gains. Thus, begin your study right now to have a solid grasp of the technological factors driving the stock market.
