How the analysis fits together

Start top-down. What environment are we in — high rates or low, by how much — and how does that regime benefit or hurt specific industries? A cost of capital that punishes long-duration growth in one regime can reward it in the next. The macro backdrop is decided before a single company is looked at, because it sets which parts of the market are even worth the work.

Next comes valuation of specific firms, through the lens value and growth investors share: forecasting future cash flows and discounting them to present value. When you buy a stock you are really paying for the growth of those future cash flows and the company's expansion — not the trailing number. A discounted-cash-flow view states that directly: a business is worth the present value of the cash it will produce.

Around the number sit management analysis and competition analysis — who is running the business and what protects it. Fundamentals are mostly the how and the why.

We live in a data-driven world, so the data earns a scientific test — technical, fundamental, and economic data alike. Quantitative work is where a claim meets evidence: does the relationship hold out of sample, or only in the story? But a model is never perfect. Real-world conditions change fast, so the models are held loosely — inputs to a judgement, not a substitute for one.

To my mind, technical analysis is the analysis of all forecasts. Its founding premise is that price discounts everything — so every fundamental view, every quantitative test, every piece of economic data is already forecast into the price. To read price is to read the sum of what the market has concluded, which is why it goes far beyond reading a chart, the one thing most people associate it with.

That premise is also why it works when markets are efficient and when they are inefficient: what changes between those states is how much information the price has absorbed, not whether price is worth reading. And efficiency is not fixed — it varies with what the market and the economy are doing, and with the regulations, accounting standards, and government policy that let information flow freely in the first place.

Done well, it reads the psychology of investors — their decision-making, and where they may go next — through supply and demand. It is an art with deep, under-explored domains of knowledge.

Newer tools keep expanding what it can see. Relative Rotation Graphs (RRG), created by Julius de Kempenaer, a CMT, have been on the Bloomberg terminal since January 2011 (and on StockCharts since 2014); they plot relative strength against its own momentum, so you can read rotation and positioning across a whole group of assets at once. I treat RRG as part of economic forecasting — rotation across sectors and assets is the cycle showing its hand.