If someone gave you a dollar for every newfangled stock-picking method invented every year, well, you probably wouldn’t need a book on investing. You’d already be rich.
Investors are constantly barraged with new ways to pick stocks and buy stocks. There’s no shortage of pundits, professional investors, and traders who all claim to know the best ways to invest. The trouble is, most of their advice is conflicting and often confusing.
Maybe it’s this constant swirl of investment babble that tempted you to pick up this book. If so, you made a wise decision. This book will help you get back to the basics of investing, understand business, and measure how much that business is really worth. Rather than chasing hot stocks that whip around,
Fundamental†Analysis†for†Dummies†will show you how to study the value of a business. You’ll then use that information to make intelligent decisions about how to invest.
While faddish stock-picking systems come and go, fundamental analysis has
been around for decades. The ability to pore over a company’s most basic data
and get a good idea of how a company is doing, how skilled the management
team is, and whether or not a company has the resources to stay in business is
a valuable skill to have.
Fundamental analysis is best known as a tool for investors trying to get a very detailed assessment of what a company is worth. But you might be surprised to learn you don’t have to be an investor to use fundamental analysis. If you buy a warranty from a company and want to know if the company will be able to honor it, that calls for fundamental analysis. If you just want to know “how well” a company is doing, you might also want to use fundamental analysis. Journalists, too, can use fundamental analysis to find stories that will interest readers.
Fundamental analysis also helps you figure out whether what you read about companies makes sense.
The aim of this book is to show you what fundamental analysis is and help you use it as a way to better understand business and investment.