- Fundamental analysis is a method of evaluating securities by attempting to measure the intrinsic value of a stock.
- Technical analysis is the evaluation of securities by means of studying statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security's intrinsic value but instead use stock charts to identify patterns and trends that may suggest what a stock will do in the future.
Ravi Mohan's Blog
Saturday, January 27, 2007
Tech Skills - An Investment Metaphor
A snippet of a (yahoo messenger) conversation with a friend who thinks differently. "... friend: i'm actually quite happy being a follower with technology... i'd rather build cool apps than hack frameworks. Its similar to my approach to investing... get on board a stock just as it makes new highs :-) and ride the wave. ..." Viewing technical skill acquisition (including the choice of language/frameworks/tools) through a metaphor of investment of scarce resources (that would probably benefit from the use of a deliberate strategy to maximise returns) is illuminating. The metaphor fits loosely, with plenty of holes in it. The "investment" made by a developer in a particular technology (and thus by implication in the underlying paradigm, community, toolset etc) is primarily the time he spends on mastering the technology, and secondarily the mental effort required to do so (Kernel hacking is much harder then Ruby on Rails). Mental effort is not strictly equal to time consumed. If you have 24 hours of free time you can use it to work through a RAILS tutorial or understand continuation passing interpreters. The latter requires significantly more mental effort/unit time. Spending time, however, is very different from spending money. Money does not diminish when you don't actively spend it(ignoring the time value of money), but the time available to you diminishes at a constant rate till it is all gone whether you consciously spend it or not. With money, you can make a marginally suboptimal investment, watch it for awhile, then re extract most of the value and reinvest it in another instrument without too much effort, losing just the "time value" of the money. You can't decide to learn RoR for a year, then extract most of the time invested, and reinvest it in say Kernel Hacking. Time, once "invested" is gone forever. Like most non professional investors in stocks and shares, developers mostly invest their time into particular technologies by default rather by deliberate strategy and many people find themselves having "6 years experience in C++ " or whatever, without knowing quite how they got there. So it is useful to look at the "correct" ways of investing in shares and try to extract any lessons to apply to tech skill acquisition. My friend's technology strategy is "similar to .. get on board a stock just as it makes new highs .. and ride the wave." . In the world on Finance, such a strategy is called "technical investing". When the objective of the analysis is to determine what stock to buy and at what price, there are two dominant methodologies.- value investing and technical investing. from investopedia