What is Fundamental Analysis?
This is first section of Fundamental Analysis course. It gives you idea of concepts which is foundation concept to analyze a stock. Even if you are casual investor then it is imperative to understand these key concepts. The term Fundamental analysis is meant to understand stock balance sheet, valuation, profit loss and position of the stock with price it is trading. This helps you differentiate the market frenzy about a stock and real value of the stock.
These key concepts like PE (price earning ratio), EPS (Earning per share) etc are some of the common terms you hear every day while watching the business news channel or reading about stock online. Things like debt, promoter holding etc are also common topics. These are the basic knowledge one needs to have for evaluation of a stock. These things are explained in this course so that you can easily make most of the shows you watch.
Lets understand importance of it with an example. Someone or some blog suggested or recommended a stock for investment. What action will you take in that case? Should you invest directly to it? If you are investing directly to it means you are just accepting everything which was said to you and putting your money into it. This can be equated with giving money to someone without even establishing whether the person is trustworthy or not.
The second option is to get the stock recommendation and then based on the knowledge you have drill it further and understand whether it is worth to get your money. This case can be equated as scenario where you are taking id details and trust worthiness of a person before lending him or her money.
If you closely see both the cases then in first case chances of you losing money depends on the trust of person who suggested the stock. You personally have blindly put money into that. So chances are pretty high as there is no second cross check on the stock even you do not know when the person bought or planning to sell it.
But if you see in case of second scenario the chances of making loss is less compared to first scenario. Your own research is performed post the analysis of first person so you have a cross check in place. It may be that you can figure out some misses that may have been made by first person or you may already have better stock in your portfolio in which you can increase stake instead of investing in one more company. Even if you invest in the recommended company it will be a informed decision not a blind folded decision.
List of Lessons
Below are the list of lessons under Fundamental analysis course. These sub sections are then dividend into multiple lessons. The sub sections are from basic to advanced so that beginners can read through the basic section first. Market veterans can start with the advanced section. Whereas I would recommend people reading the basic section because it is very easy to forget the fundamental things so better to reiterate the things and understand it fully before diving into details with advanced section.