Does all 'investment' road leads to Rome?

I believe that every investment strategy has 'a chance' of making money. Whether you use charts, rely on analyst reports, use a dartboard, or listen to recommendations from friends. However, the key problem to consider is capital preservation. That is how many time can you afford to get it wrong before you get it right.

Personally, I rather 'be safe then be sorry' (a term I have repeated many times to my daughter when I read the story of the three little pigs)

More broadly, here's my take on two main investment strategy for shares... Fundamentals vs Technicals (Charts).

Looking at Fndamentals, most people think of Warren Buffet. Although it make sense, some people find it difficult to use it. Reading financial reports and following news about a company may not necessary mean that you know what its worth. Additionally, this process is often time consuming and involves 'complex' valuation technique which is 'unsuitable' for individuals.

In contrast, Charts seek to explain the price action of shares. Share price (a basic level) is about demand and supply. By looking at historical share price movements, a Chartist can develop patterns and look for trends. Correspondingly, this allow a Chartist to predict future movement in share prices. To some, looking at pictures may be easier than numbers.

Some suggest using Fundamentals for stock picks and Charts to time entry and exit point. The bit that doesn't make sense to me is that if a Chartist to want to follow trends, he/she would want to see some initial increase volume and share price before going in. However, a Value investor knows the Intrinsic value and if it is significantly higher than current share price, wouldn't he/she want to buy it at it's cheapest price, rather than to wait for a slight increase in share price and follow others?

As I dig deeper and discover my own strategy in investing, I find myself using both approaches for different reasons. Charts are used to explain the historical movements in share price (i.e. what happen today?). Fundamentals are used as the basis of my investment decisions (i.e. am I going to do anything about it?).

I have also discovered that value investing is actually very easy. There are no complicated valuation (well , relatively). However, the time consuming part is I spent alot of time reading annual reports and understanding the business/industry.

In terms of valuation, I focus alot on 'Return on Equity (ROE)'. ROE is a measurement that reflects the performance of a business (as a shareholder). One of the key advantage is that it is independent to the performance of its share price. To me, this removes any biases or sentiments of the market (this is important in order to find out what a business is truly worth). But the most important aspect of being a Value Investor is understanding and finding exceptional businesses (whether a company truly has sustainable competitive advantage). That is an art.