Fundamental Analysis: Knowing The Big Picture

Posted by fts on 09 March 2010

Read this 49 page Quantum Swing Trading FREE Report. Turn $200 into $100K in just 3 months with this Penny Stock Trading FREE Report. Meet the High Velocity Market Master and get your FREE COPIES of the Ulimate Day Trading System and the Universal Risk & Money Management Tool just now! Many investors and traders when they hear the word fundamental analysis start sweating and get anxious, fundamental analysis need not worry you, if you know how to keep it simple. Follow the K.I.S.S principle when doing fundamental analysis. You don’t need to do an MBA from Harvard or Stanford to master fundamental analysis.

When you do fundamental analysis of a company and its stock, you should always start with these four basic questions! 1) What is this company’s value relative to its peer companies? 2) What is this company’s growth rate? 3) What is this company’s return on capital? And 4) What is this company’s debt level?

When you have answered these four basic questions, you will get an idea what should be the true value of this stock. You don’t need to fret over calculating the exact intrinsic value of a stock like a Wall Street Expert. You just need to figure out that this stock is worth between $20-30 while it is trading for just $15 per share at the moment.

If you don’t know intrinsic value, it is the supposed true value of the stock. It may not be what the market value at that time is. But over time, the stock will surely attain what it’s intrinsic value is. Now why fundamental analysis works?

Suppose, you have a apartment that you rented for $1500 per month. Compare this with your friend’s apartment who pays $2500 per month. You can easy figure out that the value of your friend’s apartment is double your apartment. In the same way, companies are value by their earnings. Each company reports its quarterly earnings statement. By looking at the quarterly earnings report of different companies, market figures out which stock has more value. So a company’s value is based on its future expected earning potential.

Another reason why fundamental analysis works is that arbitrageurs keep the prices in check as they are always looking for mispricing in the market. This mispricing in the market gives them an opportunity to make riskless profit. So, they immediately pounce on the arbitrage opportunity. When many try to take advantage of that arbitrage opportunity, the mispricing is leveled out and the market prices equal out.

Suppose a company ABC stock is selling for $10 and its’ market value is $100 million with $150 million in cash and no debt. An arbitrageur will immediately detect this arbitrage opportunity and buy the company for $100 million. Use the cash to pay for its purchase. So, fundamental analysis works because firms, individuals and governments are always looking for making riskless profits in the market.

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Options GPS Ultimate Stock Options Trading Course By Chris Rowe And Ron Ianieri

Posted by fts on 06 March 2010

Read this 49 page Quantum Swing Trading Report FREE. Meet the High Velocity Market Master and get your FREE COPIES of the Ultimate Day Trading System and the Universal Risk and Money Management Tool just now. Discover the Ultimate Stock Options Trading Course-Options GPS!Chris Rowe: Dear Fellow Investor, No matter what it is you do for a living, continuing to learn can be a huge part of being successful. It doesn’t matter whether you graduated from an Ivy League-caliber university or spent a few years at the School of Hard Knocks. Either way, your best shot at developing a rock-solid skill set starts with finding the right teacher for you. Finding a teacher who has a deep textbook knowledge combined with real practical experience on the front lines is hard enough. But finding an educator who has a proven ability to teach … and who has time for you … is nearly impossible. This is especially true in the highly specialized investment world. The bad news is that, if the past decade has proven anything, you can’t trust the sharks on Wall Street or even our government to manage your money for you.

The good news is that, as of today you no longer have to… Why? Because today you have the opportunity to learn from the master himself — a master who will teach you how to turn the tables and become the predator in the financial markets instead of the prey. How do you accomplish this? Simple.

Go to the guy who trained them, and have him teach you. Inch by inch, step by step, from start to finish. That guy is Ron Ianieri. Ron is the same guy who created an industry-respected Options Trader Trainee Course that he then taught to the up-and-coming floor traders on the Philadelphia Exchange. I’ll let Ron take over from here, to tell you more about how you simple it is to start risking less while still enjoying the best returns of your investing life, right in the middle of one of the toughest markets we’ve seen for a long time …

Dear Smart Investor, Did you know the reason options were originally developed was to become the perfect hedge against risk? That’s because, when used properly, options remove risk from portfolios. And if you didn’t know about portfolio protection a year and a half ago, you may not have done so well in the market. You may have even seen your savings washed away. But if you had protected yourself properly a year and a half ago, you’d be in love with your portfolio now, wouldn’t you?

Even if you don’t have much of a portfolio left, options have this amazing thing called cost-efficiency. Simply put, options can make a smaller investment act like a much-bigger one. So in an event like we had in the markets over the past couple years, where we had a major bear market, portfolios were literally chopped in half. People just don’t have the money they used to have. And to get that money back, they can’t wait another 20 years. Many are retiring in 5 and 10, or they just want the ability to. And if that’s important to you, you need the power of leverage. When used properly, it’s a lower-cost way of controlling the same-size stock positions can get those accounts back up to where they need to be to cover you in retirement.

Leverage, by definition, is not necessarily bad. Actually, there are two definitions of leverage I’ve heard. One is how to getter a bigger position with the same amount of money. The other, more-accurate definition of leverage is how to get the same-size position with less money. That’s the key and if you understand that, than you can actually make a smaller position act like a bigger position without adding the additional risk. Bigger gains … less risk … that’s the beauty of options. Options Have Never Been More Popular! It’s easy to see why options have become so popular.

But there is a downside to all the attention on options trading. You have some people who are not learning the right techniques or don’t fully understand the instrument they’re trading. Even worse, many options educators don’t fully understand the material they’re teaching! And that’s why so many individual investors get burned. The good news is you don’t have to be one of them.

The surge in options popularity coupled with the lack of reliable information for everyday investors, made my decision a very easy one. I decided to make the entire course I taught to floor traders available for members of The Tycoon Report. I designed this course, Options GPS, along with co-creator Chris Rowe, with the goal of giving you the upper hand when it comes to investing. In this course, you will gain this edge once you learn the most-powerful 14 strategies for using options. Anybody armed with these 14 strategies can trade options and become obscenely successful with them.

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