In the first part of this series, I tried to make the case that something fundamental has shifted in markets. Not the importance of fundamentals themselves, but the mechanism through which fundamentals translate into prices:
Market structure changed. The investor base changed. Time horizons compressed. Perception became a dominant force in price formation, often overpowering valuation for far longer than many fundamental investors expect or feel comfortable with.
If that diagnosis is broadly correct, it naturally raises the next question. What do you actually do with it?
Read part 1 here:
Playing a Different Game: When Fundamentals Aren’t Enough Anymore! (Part 1)
This will be a 3-part series. If you don’t want to miss the follow-up pieces, make sure to subscribe to the blog.
This second part is my attempt to answer that question on a qualitative level. Before getting into signals, indicators, or charts, I wanted to understand how perception changes can be identified in the first place. What patterns repeat? What kinds of situations reliably distort investor perception? How do you distinguish between a stock that is cheap because something is genuinely broken and one that is cheap because the market is temporarily focused on the wrong thing?
Much of what follows is inspired by how Ricky Sandler articulates and operationalizes these ideas, but filtered through my own process and experience. The goal is not to copy his framework, but to adapt the underlying logic in a way that fits my very fundamentally driven approach.
In the third and final part of the series, I’ll then take the next step and move into quantitative instruments and technical analysis. Not as a separate discipline, and certainly not as a replacement for fundamental work, but as a complementary toolkit.
If this second part is about sharpening qualitative judgment around perception shifts, the next one will be about using data, signals, and price behavior to support timing decisions around entries, exits, and position management. Think of it as adding a new layer to the same process rather than switching frameworks altogether.
So let’s get started!
This is where it gets interesting!
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