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Going deeper ยท 5 min read

Charts vs. financials: what each one can and can't tell you

Technical analysis studies the price chart: trends, averages, momentum. It's a description of investor behaviour, not of the business.

Fundamental analysis studies the company's own numbers: revenue, margins, debt, cash. It's slower and duller, and it's what ultimately drives long-term returns.

Used together, the fundamentals tell you whether a company is worth owning and the chart tells you what mood the market is currently in about it.

Remember

One describes the crowd, the other describes the company.

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