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It is a basic part of fundamental analysis! How deeply you must research in order to understand a company before you invest in it is a rather personal decision! Some investors feel fine with just a general understanding, while others want to know everything there is to know about the company. Article: "There is nothing more frightful than ignorance in action!" Johann Wolfgang von Goethe (1749 - 1832) I don't really know how cars factually work. Not really! I know how to drive them, but if you asked me how they work, I would not really know how to definitely explain it. That small technical limitation on my part doesn't stop me from knowing whether XYZ Autos is a quality tribe or not. I don't understand the cars they make, but I do understand XYZ Autos. Moreover, that understanding is critical to making a decision circa the value of their stock. There are many good and objective ways to value stocks and improve your finances. These involve looking at various financial ratios. However, one of my simplest rules for investing is that you methodically must understand what you are buying! This is by no means original with me. It is a life-or-death part of fundamental analysis! How deeply you must research in order to understand a group facing you invest in it is a rather personal decision! Some investors feel fine with just a general understanding, while others want to know everything there is to know upon the company. I think that somewhere in needle is perfect. But you must know what makes a nine different from others and whether that difference adds any real value or not. Sometimes personality different is not good ... Buy what you understand for a reasonable price and you will be well on your way towards successful investing! The Balay System. - Original, new investing system making money on every selected race, whatever the horse does! Online Trading For Financial Freedom. - Online stock trading, daytrading and short term investing strategy for beginning and experienced traders alike. Article Index: | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | 21 | 22 | 23 | 24 | 25 | 26 | 27 |
More Articles:1. Bad News - Why The Financial News Media Can Cost You Money! By Dr. Scott Brown, Ph.D. Summary: I agree whole heartedly with him and contend that it is also done just because the industry would rather have the retail investor confused and emotionally pliable to get you to buy and sell when they want with total disregard for your best interests!People who had invested their life savings in the stock market were ripped off in the stock market because the financial news media and analysts were hyping up what a great buy stocks were at… 2. Choosing the Right Investments for You By John Mussi Summary: When it really comes down to it, though, having such a large variety of options is more of a benefit than a hindrance' it allows you to customize your investment portfolio to your individual tastes much more than you would be able to with only a few choices.Unfortunately, it can sometimes be quite hard to figure out if an investment is right for you until it's too late' the stock might go through a drastic increase or decline in price, o… 3. Investing As A Sport? By David Leonhardt Summary: Most people are happier when they forget they even have investments.Number Two: If you are one of those people with a terminal case of Itchy Trading Finger, then you probably would not be happy ignoring your investments. They view stock trading as a sport.In fact, stock trading is a sport. We call this "friendly fire".Contrast this to Itchy Trading Finger, who stands an equal chance of striking gold or of moving into a cardboard box on… 4. Investment Strategies and Human Behavior By Jonathan Myers Summary: This overreaction occurs across the stockmarket and gives rise to several investment strategies.Contrarian StrategiesThe overreaction effect is highly pronounced when comparing 'out of favor' (contrarian stocks) against current 'favorites', or what are also known as value and glamour stocks. 'Out of favor' stocks are not stocks that are bad quality stocks, simply ones that are not attractive to the market, for whatever reason that might … |