1. What kind of information should I know before investing in the company?
- DavidLv 77 years agoFavorite Answer
Benjamin Graham, in his famous book, "The Intelligent Investor", has gained recognition as one of the best and most important investment pieces written illustrating the fundamentals of a value-investing strategy.
Graham had a profound influence on his pupil Warren Buffett, who would become the most famous investor of all time, in grad school at Columbia University. Graham instilled the fundamental principles of value investing into Buffett - principles upon which he relied to amass one of the world's largest personal fortunes.
You might want to read Graham's book, available at your local library or through their Interlibrary Loan System.
The key to Graham's method was finding undervalued stocks.
Definition of 'Undervalued'
A financial security or other type of investment that is selling for a price presumed to be below the investment's true intrinsic value. A undervalued stock can be evaluated by looking at the underlying company's financial statements and analyzing its fundamentals, such as cash flow, return on assets, profit retention and capital management, to determine said stock's intrinsic value.
Investopedia explains 'Undervalued'
Buying stocks when they are undervalued is a key component of mogul Warren Buffett's value investing strategy. Value investing is not foolproof, however. There is no guarantee as to when or whether a stock that appears undervalued will appreciate. There is also no single correct way to determine a stock's intrinsic value - it is basically an educated guessing game.
The Fundamental Mechanics Of Investing
Even experienced investors debate which type of analysis - fundamental or technical - provides higher returns. Technical analysis analyzes past market performance by looking at the chart activity of price movements, volume, moving averages and the statistics of various outcomes.
Technical Vs. Fundamental Investing
- 5 years ago
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There are three things you'll want to look for when picking a penny stock to make sure that you don't get penny stuck: Underlying business, financials, and footnotes.
When it comes to penny stocks, a company's underlying business is even more important than it is in exchange-traded stocks. That's because the penny stock world is home to "shell" companies that are legally incorporated, but don't have any business operations