10. Stock Analysis: Quantitative Valuation In the previous section, we covered more qualitative means of stock valuation and, in this section, we wish to turn to more numerical ways to determine valuation. The types of quantitative valuation types that we will discuss include the following: • Discounted Cash Flow. This is the most theoretically complete valuation […]

9. Stock Analysis: Qualitative Valuation Here, we begin to discuss stock valuation. We start from more qualitative techniques. In the next section, we move onto quantitative valuation techniques. This section includes three qualitative valuation methods: 1) identifying inflection points, 2) looking at market expectations and 3) scenario analysis. 9.1. Improving/Deteriorating Trends and Inflection Points Stock […]

8. Financial Analysis: Company Level 8.1. How to Read Financial Statements? A company’s financial statements are a quantitative picture of the company’s operating performance and financial position. They consist of three different statements: 1) the income statement, 2) the balance sheet and 3) the cash flow. The income statement shows how much money a company […]

7. Company Analysis We divide the company analysis description into two sections. One will be more qualitative and the other more quantitative in nature. In this first section, we will describe mostly more qualitative analyses. We start with industry analysis and move from there to specific company analysis. 7.1. Industry Analysis A company’s fortunes, to […]

6. Macroeconomic Analysis 6.1. Economic terminology As far as terminology goes, we will attempt to convey an understanding of the following terms: 1) unemployment, 2) interest rates, 3) inflation, 4) money supply, 5) trade balances, 6) GDP growth, 7) investment, 8) consumption, 9) national budget deficit/surplus and 10) consumer confidence. UNEMPLOYMENT Unemployment measures the percentage […]

5. Active Investing: Investment Analysis 5.1. Overview In the previous section of our program, we divided the bodies of knowledge which we believe investors should have into four categories: • Asset allocation/portfolio construction. • Macroeconomic analysis (understanding workings of economy) • Company analysis (understanding how to analyze companies and industries) • Stock analysis (understanding valuation […]

4. Actively Managing Your Own Money Editor’s note: some exhibits may not display properly on the web. 4.1. What does Active Management Require? The bulk of the remainder of our investment program will be concerned with active management of your funds. That is, hands-on investment of your money in such a way that you will […]

3. The Passive Investment Route Editor’s note: some charts may not display properly on the web. 3.1. Types of Investment Funds  There are many types of investment funds. We would break these down into three major categories: • Mutual funds. By mutual funds, we mean funds which have a fund manager or a team of investment […]

2. An Overview of the Basics 2.1. Types of Investments When we speak of investments, most people automatically think of stocks. However, the term investments can be applied to a broad variety of instruments or ownership of assets which are meant to provide a return. In this section, we briefly review the types of investments […]

1. Know Why You Are Investing 1.1. Learning How to Fish, Instead of Taking Fish In your hands, you have the tools which, if you apply energy and focus, will help you to survive and even thrive in the investment markets. There are too many products offering specific investment advice but too few products out […]