Fundamental Analysis For Dummies, 3rd Edition

Introduction

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, bloggers, 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 inevitably crash, 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.

History is full of examples where just knowing a little fundamental analysis would’ve saved you from a massive financial hit. The dot-com boom in 2000 followed by the bust in 2001 was easily sidestepped by investors who knew these ...