Mastering Fundamental Analysis
Michael Ñ Thomsett
Contents
The Big Secret Is . . . There Is No Big Secret
1. Defining the Fundamentals—What You Need
Measuring the Market
How the Numbers Help
Why You Cannot Afford to Ignore the Numbers
2. Timing of Financial Information—Yesterday's News
Timing of Financial News
Historical versus Current Information
Stock Price as the Basic Indicator
Useful Current Indicators
Net Margin
PE Ratio
3. The Reliability Problem—Accuracy of the Numbers
Cooking the Books
Overcoming the Problem
4. Financial Reporting—How They Do It
The Statement of Income
The Statement of Cash Flow
Judging a Company Financial Health
The Annual Report
Read the management analysis of financial results
The Prospectus
5. Picking Apart the Financials—Easier Than You Think
The Importance of Notes
Comparisons with Past Financial Reports
Comparing a Company with Its Direct Competitors
Become Your Own Expert
6. Ratios - What They Are, How They Work
Forms of Ratios
Balance Sheet and Earnings Ratios
Diluted Earnings Per Share
Capitalization Ratios
Interest Coverage
Profitability Ratios Based on Original Investment
Growth Ratios
Developing a Ratio-Based Program
7. Trends—Your Secret Weapon
Computing an Average
Monitoring Investment Return
What to Look For in the Trends
Acting on the Information
8. Putting Market Services to Work
Standart and poors
The Wall Street Journal
Barron`s
Investors Business Daily
Other Information Sources
Doing Your Own Research
9. How to Really Read the Stock Listings
Combining Volume and Price Information
The Importance of Price Trends
Determining What You Really Earn
10. What Makes Stock Prices Change
The Auction Marketplace
Supply and Demand in Action
Is the Market Efficient
11. Economic Indicators or Gauging the Economy
Looking Beyond the Company Numbers
Valuable Indicators and Where to Find Them
Inflation
Employment & Money Supply
Interest Rates
National Debt, Business and Economic Measurements
Stock Market and Investor Sentiment
12. Different Drummer Investing or The March of the Contrarians
Why Contrary Theory Works
Viewing the Larger Market Picture
Risks for Contrarians
13. Fundamentals in Specialized Markets
Fundamentals in the Bond Market
Buying Temporary Portfolio Insurance
Creating Higher Profits on Sale
Mutual Fund Features
14. Valuable Techniques for the Savvy Investor
Reinvesting Profits and Dollar Cost Averaging
Setting Goals to Ensure Profits and Limit Losses
Avoiding the Pitfalls
Becoming a Successful Investor
Economic explanatory dictionary
