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Shares Made Simple: A beginner's guide to the stock market by Rodney Hobson

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Chapter 16: Fundamental Data

There are three ways of deciding which shares to invest in:

  1. fundamental data
  2. charting
  3. gut feeling

The best policy may be to take a combination of the three and the more you invest the better your judgement will become. Fundamentals are based on hard facts about the company; charting follows movements in the company’s share price; gut feeling is something that cannot be easily defined or taught.

If you get a feeling that a company is heading for trouble or is about to turn the corner, and you find that nine times out of ten you are right, by all means follow your heart. Otherwise it is probably best to stick with what is more tangible.

Fundamentals are the figures that the company puts out in its profit ...

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