Chapter 10
Looking for Fundamental Reasons to Buy or Sell
IN THIS CHAPTER
Exploring fundamental indicators that give you some insights into an investment’s attractiveness
Understanding how to determine which companies have resources to endure tough times
Uncovering warning signals of when might be a good time to consider selling
Considering the importance of dividends and what they tell you about the value of a stock
Wouldn’t it be nice if financial publications and websites put a big red dot next to the stocks that are going to fall in the next six months and a green dot next to the ones that are going to rise? Investing would be so simple.
Investing is not that easy. Deciding whether to buy or sell a stock — if you’re a fundamental analyst — requires more thought. There are dozens, if not more variables, that go into this very important decision. You not only need to size up the health of the business and evaluate whether it has enough cash to survive, but also consider whether the stock price is attractive.
Fundamental analysis may not be a crystal ball. Cheap stocks can get ...
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