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Part 1: The Techniques > Confirmation: A Powerful Analytical Technique

Chapter 4. Confirmation: A Powerful Analytical Technique

In any form of investigation, initial information is taken seriously only after it has been confirmed. Whether confined to the realm of statistics or broader in application, confirmation and verification are necessary steps. Under the scientific method, these are considered the most important stages in the testing of information.

The same principles work well when it comes to stock selection. We may approach the validation of stock selection by testing assumptions that grow from analysis. For example, initial analysis indicates a particular condition; but it is not enough to proceed. The process requires that you first find confirmation of the information through a secondary indicator.


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