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Showing posts with the label Basics of Fundamental Analysis in the Stock Market

Fundamental Analysis - Part-1

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Question 1.: Can I be a fundamental analyst? Answer: Of course you can be. It is a common misconception that only chartered accountants and professionals from a commerce background can be good fundamental analysts. This is not true at all. A fundamental analyst just adds 2 and 2 to ensure it sums up to 4.  To become a fundamental analyst you will need few basic skills : 1. Understanding the basic financial statements 2. Understand businesses with respect to the industry in which it operates 3. Basic arithmetic operations such as addition, subtraction, division, and multiplication The objective of this article on Fundamental Analysis is to ensure that you gain the first two skill sets. Question 2.: I am happy with Technical Analysis, so why bother about Fundamental Analysis? Answer: Technical Analysis helps you gain quick short term returns. It helps you time the market for a better entry and exit. However Technical Analysis is not an effective approach to create wealth. Wealth is creat

Basics of Fundamental Analysis in the Stock Market

How do you decide what you want to buy ? and what you want to sell ? That's what we are going to take you through today! The very Basics of  - How to value the price of stock and  - How to judge the current and future growth of companies   - That you want to invest in .  An introduction to what is popularly known as the fundamental analysis of the company  Fundamental Analysis of a stock can simply be viewed as   An Extensive Health Check Of the Company or 360 Degree Check On Various Parameters: - Be it the Financials, - Quality Of Management, or  - The Overall Economy And the Industry Conditions That might Effect the Performance Of the Company. So let's start by  understanding some of the popularly used financials ratios  to judge the health of a company. One of the first thing you should focus on the Earnings Performance of the company How has the company delivered on earnings over the past few years..  And What Are Its Earnings Expectations Over the Next Few Years.. You