Stock Market Math

Chapter 6 Fundamentals: Balance Sheet Tests You Need to Know

The “fundamentals” refers to financial information a company reports. In the last chapter, the discussion of core earnings demonstrated that the official GAAP version of accounting is unreliable and often distorts the picture completely. This often overlooked problem indicates a general lack of reliability in fundamental reporting, especially when core earnings adjustments are significant.

The widespread distrust of technical indicators leads many conservative investors to reliance on the fundamental signals. There are solid justifications for this, and as a result:

… the typical analyst adheres to a technique known as fundamental analysis or the intrinsic value method. The assumption ...