Stock Profits: Getting to the Core—New Fundamentals for a New Age

Interpretation is the phase of analysis in which many investors begin

to feel lost, because it requires an understanding of what the trends

mean. By concentrating on the techniques demonstrated in the last

chapter (using sales/earnings, capitalization, and PE analysis as your

primary indicators), you can narrow down the focus of your study

and then interpret the results so that they make sense. These initial

fundamental trends help you to focus your search, to gain insight

into the causes of trends, and to know where else to look to uncov-

er their true meaning.

You already accept the basic idea that growth in market value

is related (in the long term) ...