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study of how to make fundamental analysis

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Fundamental Analysis
What Does Fundamental Analysis Mean?
A method of evaluating a security by attempting to measure its intrinsic value by examining related
economic, financial and other qualitative and quantitative factors. Fundamental analysts attempt to
study everything that can affect the security's value, including macroeconomic factors (like the overall
economy and industry conditions) and individually specific factors (like the financial condition and
management of companies).
The end goal of performing fundamental analysis is to produce a value that an investor can
compare with the security's current price in hopes of figuring out what sort of position to take with that
security (underpriced = buy, overpriced = sell or short).
This method of security analysis is considered to be the opposite of technical analysis.
Investopedia explains Fundamental Analysis
Fundamental analysis is about using real data to evaluate a security's value. Although most analysts
use fundamental analysis to value stocks, this method of valuation can be used for just about any type
of security.
For example, an investor can perform fundamental analysis on a bond's value by looking at economic
factors, such as interest rates and the overall state of the economy, and information about the bond
issuer, such as potential changes in credit ratings. For assessing stocks, this method uses revenues,
earnings, future growth, return on equity, profit margins and other data to determine a company's
underlying value and potential for future growth. In terms of stocks, fundamental analysis focuses on
the financial statements of a the company being evaluated.
One of the most famous and successful users of fundamental analysis is the Oracle of Omaha,
Warren Buffett, who has been well known for successfully employing fundamental analysis to pick
securities. His abilities have turned him into a billionaire.
Related Terms
Annual Report
Asset Valuation
Balance Sheet
Horizontal Analysis
Income Statement
Intrinsic Value
Quantitative Analysis
Security Analyst
Technical Analysis
Valuation

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Related Links
Introduction To Fundamental
Analysis - Learn this easy-to-understand
technique of analyzing a company's
financial statements and reports.
Stock-Picking Strategies:
Fundamental Analysis - Choose a stock
by determining its intrinsic value.
Blending Technical And
Fundamental Analysis - Find out how
you can combine the best of both
strategies to better understand the
markets.
What is the best method of
analysis for forex trading?
Finding Short Candidates With
Technical Analysis - Learn how to distinguish tops and bottoms in the equity market when short
selling.
What Are Fundamentals? - The investing world loves to talk about fundamentals, but what
does the term really mean?
Fundamental Analysis For Traders - Find out how this method can be applied strategically
to increase profit.
Advanced Financial Statement Analysis - Learn what it means to do your homework on a
company's performance and reporting practices before investing.
Trader's Corner: Finding The Magic Mix Of Fundamentals And Technicals - For a record-
holding stock trader, CANSLIM is the formula that identifies this magic mix.
Forex Tutorial: The Forex Market - In this online tutorial, beginners and experts alike can
learn the ins and outs of the retail forex market.
Mad Money ... Mad Market? - Jim Cramer's spirited recommendations are a case study in
irrational market behavior.
Working Through The Efficient Market Hypothesis - Deciding whether it's possible to attain
above average returns requires an understanding of this concept.
Forbes Stock Market Course - An indispensable and easy-to-read guide to building wealth.
Includes valuable information on fundamental stock analysis.
Trading Is Timing - Learn
Fundamental Analysis: Introduction
Printer friendly version (PDF format)
Sponsor: Cook up a market-stomping portfolio with our FREE report 7 Ingredients to Market
Beating Stocks.
By Ben McClure

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Fundamental Analysis What Does Fundamental Analysis Mean? A method of evaluating a security by attempting to measure its intrinsic value by examining related economic, financial and other qualitative and quantitative factors. Fundamental analysts attempt to study everything that can affect the security's value, including macroeconomic factors (like the overall economy and industry conditions) and individually specific factors (like the financial condition and management of companies). The end goal of performing fundamental analysis is to produce a value that an investor can compare with the security's current price in hopes of figuring out what sort of position to take with that security (underpriced = buy, overpriced = sell or short). This method of security analysis is considered to be the opposite of technical analysis. Investopedia explains Fundamental Analysis Fundamental analysis is about using real data to evaluate a security's value. Although most analysts use fundamental analysis to value stocks, this method of valuation can be used for just about any type of security. For example, an investor can perform fundamental analysis on a bond's value by looking at economic factors, such as interest rates and the overall state of the economy, and information about the bond issuer, such as potential changes in credit ratings. For assessing stocks, this method uses revenues, earnings, future growth, return on equity, profit margins and other data to determine a company's unde ...
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