Warren Buffet has been acknowledged as one of the best fundamental investors. 248 Rich Dad's Guide to Investing 2. Technical investing: Rich Dad said, "a well- trained technical investor invests on the emotions of the market and invests with insurance from cata- strophic loss. The most important consideration for selecting a good stock for investment is based on the supply of and demand for the company's stock. The technical investor studies the patterns of the sales price of the company's stock. Will the supply of the shares of stock being offered for sale be sufficient based on the expected demand for those shares? The technical investor tends to buy on price and market sentiment., .just like a shopper shops for sales and discounted items. In fact, many technical investors are like my Aunt Doris. Aunt Doris goes shopping for bargains and sales with her lady friends, buying items because they are cheap, marked down, or because her friends are buying them. Then she gets home, wonders why she bought the item, tries it on and then takes it back for a refund so she can have money to go shopping again. The technical investor studies the pattern of the history of the company's stock price. A true technical investor is not concerned with the internal operations of a company as a fun- damental investor would be. The primary indicators the tech- nical investor is concerned with are the mood of the market and the price of the stock. One of the reasons so many people think the subject of in- vesting is risky is because most people are technically operat- ing as "technical investors" but don't know the difference between a technical investor and a fundamental investor. The reason investing seems risky from the technical side is be- cause stock prices fluctuate with market emotions. Here are just a few examples of things that can cause fluctuations in stock prices: The Qualified Investor 249 one day a stock is popular and in the news, next week it isn't, or the company manipulates supply and de- mand by splitting the stock, diluting the pool with ad- ditional shares being created through such things as secondary offerings, or cutting back the number of shares by buying them back,or an institutional buyer (like a mutualfund or pension fund) buys or sells the shares of a certain company in such volume that it disturbs the market. Investing seems risky to the average investor because they lack the basic financial education skills to be a fundamental in- vestor and do not have adequate technical investor skills. If they are not on the board of the company changing the sup- ply side of the shares they have no management control over the fluctuations of supply and demand of the stock's price on the open market. They remain at the whim of the market emotions. Many times a fundamental investor will find an excellent company with great profits but, for some reason, the techni- cal investors will not be interested in it so the price of the company's shares will not go up, even though it is a profitable well managed company.